Iberdrola Secures $432-Million Contract for 444-Megawatt CCGT Power Station in Lithuania

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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy company Iberdrola Ingenieria y Construccion SA (MCE:IBE) (Bilbao, Spain) has signed a $432 million contract with power plant operator Lietuvos Elektrine AB (VSE:LEL1L) (Elektrenai, Lithuania) to build a combined-cycle gas turbine (CCGT) power station in Lithuania. The proposed 444-megawatt (MW) power plant is scheduled to be operational by 2012.

In September 2008, the European Bank of Reconstruction and Development (London) announced a general procurement notice for the plant and called for tenders the following month as part of the decommissioning of the Ignalina nuclear power plant, which is due to be shut down by the end of 2009. Among the bidders competing against Iberdrola were Siemens AG (NYSE:SI) (Munich, Germany), the Swiss division of Alstom SA (EPA:ALO) (Levallois-Perret, France), and the Polish division of SNC-Lavalin Group Incorporated (TSX:SNC) (Montreal, Quebec).

Construction of the Ignalina nuclear power plant began in 1978 and consisted of two RBMK-1500 Russian water-cooled, graphite-moderated reactors, the same type as those at the ill-fated Chernobyl nuclear power plant. Lithuania's entry into the European Union (EU) in May 2004 was conditional on the Ignalina power plant being decommissioned. Unit 1 was shut down in December 2004, and Unit 2 is scheduled for closure at the end of this year.

There is an urgent requirement for new power generation capacity to replace the Ignalina plant, as the plant supplied up to 80% of Lithuania's electricity before Unit 1 was shut down. Apart from the development of additional power stations, investigations are under way to determine the possibility of connecting Lithuania's power grid with those of Poland and other countries. Last week, the EU granted $240 million toward the laying of an undersea power link between Sweden and Lithuania.

Under the terms of the contract for the new power plant, Iberdrola will be responsible for the design, supply, construction, installation, training and commissioning of the 444-MW CCGT plant. The firm will also set up connections to existing facilities such as electricity, gas supply, and cooling water. In a CCGT power plant, the hot exhaust gases from a gas turbine are used to heat water in a separate water/steam cycle. The steam produced is then used to drive a second generator, in addition to that powered by the gas turbine.

The gas and steam turbines and the generator for the new plant will be supplied by General Electric Company (NYSE:GE) (Fairfield, Connecticut). Iberdrola has already worked with turbines provided by GE. A CCGT system equipped with GE 209FB turbines has already clocked more than 8,000 hours of operation at Iberdrola's Arcos III plant at Cadiz, Spain. The 810-MW plant started operations in March 2006. Iberdrola also selected GE 9FB gas turbines for its Escombreras CCGT power plant in Spain.

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