International Power North America Ian Nutt

Transcription

1 International Power North America Ian Nutt

2 Who we are: North America A leading IPP with a portfolio of over 4000 MW of advanced technology CCGT plant entering commercial operation. 12 of our 14 new units are now operating commercially We are actively marketing and trading output in NEPOOL and ERCOT The technology recovery program is on track and results are coming through We have an active growth program including 1650MW in advanced development in New York State Our construction program is on track, we have transitioned to an operations company, and we are developing for growth. WSCC ERCOT Ramapo 1,100 MW CCGT MAPP SPP MAIN ECAR SERC NEPOOL NYPP MAAC Brookhaven 550MW CCGT

3 Our Construction Program Bellingham 2 units in advanced construction/commissioning CO scheduled for Sep-02 and Oct-02 Midlothian 4 units in CO 2 in final commissioning 2.5 TWh generated in 2002 at 51.2% efficiency and 86% availability Blackstone 2 units in CO.5 TWh generated in 2002 at 51.8% efficiency and 91% availability Our first wave construction program is approaching its conclusion. We have transitioned to an operational company... Hays 2 units entering CO 2 units in advanced commissioning All will be on line for Summer 02

4 Our focus is now moving to operational excellence Focus Day to day Operations 1-4 years 4+ years Integrated asset Management Revenue capture M&T/O&M relationship Health and safety Environmental compliance Market risk mitigation Outage planning and preparation Plant optimization Fleet issues O&M optimization Contractual positioning Strategic asset positioning Value optimization Asset risk profile Operational risk profile Commercial optimization Day Weekly Strategic M&T and O&M commercial dialogue Positioning and planning Plant performance planning Our integrated approach to asset management is proven to deliver results

5 Advanced Technology Risk Mitigation Construction LD s Delay I.O. Remedial Works Perf. Test C.O. PRP Outage Perf. Test C.O. PRP Outage Perf. Test C.O. Ongoing Operations NTP Scheduled COD I.O. Start Date PRP Start Compensation Determined by Test and Actual Performance PRP End Final Completion Buy Down Exercised (if applicable) Principal: To put us in the position we would have been had the plant been on time and to full performance.

6 Our Principal Markets: ERCOT Characteristics Bilateral Market similar to NETA in UK must sell in advance self schedule to sales intra day energy markets for balancing purposes (bilateral and ISO market) day ahead market for ancillaries (capability payment & energy payment when deployed) Main traded product: Seller s choice (seller chooses where to deliver) effectively floor price Zonal pricing, led by transmission constraints North to seller s choice premium Market Gas on gas competitive advantage on peak Zonal benefits Big market & strong historic growth (3-5% pa) Issues Overbuild - supply/demand balance Stranded costs - downward pressure on pricing? West South North South-North West- North North- West South- Houston Houston

7 Coal 20% Nuclear 6% Our Principal Markets: ERCOT ERCOT Installed Capacity as of 31-Dec-02 Renew 2% Peakers 6% Gas CC 26% Gas ST 40% Market Size 300 TWh Demand Growth % % Peak Demand (Proj.) 60.9 GW Installed Capacity 76.9 GW Reserve Margin 26% Merit Order (Peak Demand) ERCOT 2003 Generation Stack (including 2,500 MW of speculative New CC Capacity) West-North West North-West North South-North Houston South South-Houston We believe the zoning differentials will remain material in the medium term

8 Our Principal Markets: NEPOOL Characteristics Currently a Pool market similar to old UK Capacity, energy and ancillary product markets Power delivered to PTF no congestion market (uplifted) Dispatch on economic/technical merits Non firm to Pool Maine Movement towards Standard Market Design Day ahead and real time markets (multi-settlement) Financially firm to Pool Vermont Congestion pricing: Generation Nodal/ Load Zonal Financial Congestion Rights Zone to Zone, Node to Zone etc. NH Market Incumbent generation old and high cost Hub NE MA Competitive retail market Wstrn MA SE MA Splitting of generation and load RI CT Issues Overbuild - supply/demand balance Congestion opportunity or neutral to seller s choice? Our plant is well placed relative to the main load centres in the area

9 Our Principal Markets: NEPOOL NEPOOL Installed Capacity as of 31-Dec-02 Nuclear 14% Coal 9% Renew 2% PS Hydro 5% Peakers 6% Gas CC 33% Oil/Gas ST 25% Market Size 126 TWh Demand Growth 2.5% Peak Demand (Proj.) 24.2 GW Installed Capacity 32.0 GW Reserve Margin 32% Merit Order (Peak Demand) We believe our clean, flexible plant will give competitive edge in this market

10 North America Growth Opportunities Selective Asset Acquisition + Green & Brown Field Development + Existing Asset Portfolio Add diversity in plant, fuel, market Contracted earnings streams Logically focused Emphasis on contracted opportunities Meet strict economic return criteria Large scale cogen/industrial opportunities Seek to utilize turbines from abandoned projects Enhance performance/profitability Offer innovative off take options to customers Ancillary services Trading/marketing leverage We have the flexibility, skills and capability to deliver growth. We will focus on new markets where there are gas on gas opportunities, high cost incumbent generation and where our favored plant can be effective.

11 Growth Opportunities - acquisitions Installed Capacity 2002 NERC NERC Installed Region Sub-Region MW Possible target areas NPCC NEPOOL 33,260 NPCC NYPP 36,567 MAAC 63,996 SERC VACAR 63,645 SERC SOUTH 54,659 SERC TVA 36,276 SERC ENTR 43,221 FRCC 45,389 ECAR 123,902 MAIN 67,829 MAPP 33,285 SPP 49,738 ERCOT 79,945 WSCC RMPA 12,246 WSCC AZNMNV 29,224 WSCC NWPA 57,315 WSCC CA 60,265 Total 890,762 We have knowledge of over 15,000 MW of plant potentially available in these areas

12 Our Competitive Advantage We are well placed with: strong balance sheet no turbine overhangs no trading shadow lean, effective team We are poised to take advantage of the opportunities emerging as players readjust balance sheets: acquisition targets are evident but price expectations remain too high today greater pricing realism is forecast We are actively evaluating options and are ready to move