Saturday, August 11, 2012

Estimating value of Hamitabat Combined Cycle Power Plant

Dear Colleagues,
Turkish privatization Agency recently reannounced  lumpsum sale of 1120 MWe gas fired Hamitabat combined cycle power plant. It was tendered earlier but there was only one qualified bidder, not enough to close the sales, so it was cancelled. Proposals from interested parties are expected on 14th January 2013. Bid bond is 15m USD.
Plant Owner is  EUAS (Electricity Generation Co. Inc., Turkey) Initial installed Power is  1120 MW (92x8GT+4x96ST )- with later upgrading in 2005, plant now can generate 1154 MWe at peak loading.
Generation Capacity is  7840 GWh/year

Start up date is  24.11.1985 ~ 13/04/1989 built by ABB-Enka consortium.

Number of Units are 12

Fuel is  Russian Natural Gas supplied from West pipeline.
Configuration 2x600MWe-(4+2) CCGT with GT13D2 GT

Gas Turbine manufacturer is BBC of Mainheim, Germany

Steam Turbine Manufacturer is BBC of Mainheim, Germany

HRSG Manufacturer is CMI of Belgium
Since plant is currently a public property, there is no contract for ESA nor for gas sales. Therefore plant needs to have longterm ESA and Gas Purchase agreements to make the sales attractive, which are then to be transferred to the new owner. Plant also needs to have treasury guarantee for electricity sales in order to make the project bankable to cover better and easier commercial financing.
In Turkey, imported natural gas price is approx average >400 Us$ per 1000 Sm3, which means 10 Us$ per MmBtu, that is 7 UsCents fuel cost per kWh.
In Turkey, average electricity market price is floating at about 10 UsCents per kwh, while Natural Gas fuel cost is 7 UsCents/ kwh plus we may add 1 cent for routine O&M, excluding necessary after-sales rehab works at the plant. 
In conclusion, in Turkey a gas fired combined cycle power plant earns approx average 2 UsCents/ kwh at 8000 hours per year availability. That 8000hrs/year  figure is for new plants, and could be too optimistic for old plants before rehab. We may even consider >3000 hours per year.
1120 MWe Hamitabat gasfired combined cycle power plant could earn max 180m Us$ annually at  as high as 8000 hrs per year  preferred availability, in ideal conditions.   
For 3 yrs payback you can presume that Hamitabat 1120 Mwe gas fired combined cycle power plant may have an upfront face value at 560m Us$.
If you wish to buy 1120 Mwe Hamitabat gasfired combined cycle power plant, at 3 years of payback at 33% IRR, be prepared a figure not more than 560 m Us$ on 19th Oct 2012
If you prefer to have 4 yrs payback, with approximately @25% IRR, then your price could be 720m Us$ for 1120 MWe Hamitabat gas fired power plant on 19th Oct 2012.
We may presume that Hamitabat 1120 MWe gasfired power plant sale price could be between 540-720m US Dollars on 19th Oct 2012, for expected payback period of 3 to 4 years.
All above figures are ball park estimations without long term financing/ banking costs, nor any upfront charges, We have evaluated the plant with the available information. 
Detailed informations on latest real plant efficiencies, stack emissions etc. will be disclosed to interested parties who would purchase the tender documents and signed the confidentiality agreement. 
Anyhow plant efficiencies and stack emissions are to be recorded once again to be based on necessary additional ball-park 100-200 million US Dollar budget aftersales rehabilitation investment expenses. 
This plant is not so promising for investment due to high gas price, low  electricity market price, too old equipment, high expenses expected for rehab after sales, and low availability, plus low plant overall efficiency.  Anyhow there are many international companies who wish to put money into Turkish energy markets, so this tender could be a good start to make further investments. 
For any questions or asistance you may need from the local market, please feel free to ask. We shall be too pleased to receive your comments. With best regards
Haluk Direskeneli,  Ankara based Energy Analyst

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