NORWAY: INTERVIEW-Danish wind firm Vestas to expand into Europe, US.
Reuters English News Service, 04/18/01

USA: Bandwidth trade struggles to gain footing.
Reuters English News Service, 04/18/01

BRAZIL: INTERVIEW-BG claims Brazil pipeline war victory.
Reuters English News Service, 04/18/01

Enron India Sends Arbitration Notices To State Govt
Dow Jones International News, 04/18/01

Enron may sell some Brazil assets - SAmerica chairman
AFX News, 04/18/01



NORWAY: INTERVIEW-Danish wind firm Vestas to expand into Europe, US.
By Birgitte Dyrekilde

04/18/2001
Reuters English News Service
(C) Reuters Limited 2001.

RINGKOEBING, West Denmark, April 18 (Reuters) - Danish wind turbine maker 
Vestas Wind Systems said on Wednesday it was heading for expansion in Europe 
and the U.S and expects to regain lost terrain in the world`s largest wind 
power market Germany. 
"We see our market share in Germany rising to 16-20 percent this year after 
last year`s drop by three percentage points to 13 percent," Vestas Chief 
Executive Johannes Poulsen told Reuters in an interview at the company`s 
headquarters in Ringkoebing, West Denmark.
Last year Vestas - including its associated company Spanish Gamesa Eolica - 
increased its market share to 32 percent of the world market from 29 percent 
in 1999, cementing its position as the world`s leading wind turbine maker 
ahead of German Enercon and Danish NEG Micon . 
According to Danish windpower consultancy BTM Germany installed 1,665 
megawatts of wind capacity in 2000 followed by Spain`s 1,024 MW while 
installed capacity worldwide rose 15 percent to 4,495 MW. 
"We regard growth in the German market as stable in coming years and expect 
growth to continue in Spain," Poulsen said. 
To meet the German wind turbine demand Vestas said it would build a turbine 
blade factory in either Germany, Poland or Hungary, with a final decision on 
which country to be announced at the company`s general meeting on May 3, 
Poulsen said.. 
Today the company has seven factories in Denmark and one in Germany, Italy 
and India. In Spain, Vestas indirectly owns 10 plants through its 40 percent 
owned wind turbine firm Gamesa Eolica, part of Spanish Gamesa Group . 
Vestas will also soon build an tower construction and assembly plant in 
Scotland, Poulsen said. 
Vestas expected wind power installations worldwide to leap 30 percent 
annually over the next three years and with the company`s expectations of 
annually sales growth at 40 percent, Vestas is set to gain market share. 
FOCUS ON THE U.S. 
Following Germany and Spain, the U.S. is seen as the third-largest wind 
turbine market in 2001, but new orders have come to a halt as windpark 
developers await an extension of the favourable production tax credit 
agreement (PTC), which expires by the end of 2001. 
Last week U.S. President George W. Bush in his fiscal 2002 budget proposed 
expanding the 1.5-cent tax credit for each kilowatt-hour of electricity 
produced from wind for three more years to 2004. 
"It`s positive the Bush Administation favours PTC. Now it seems more certain 
an extension will happen," Johannes Polusen said. 
BTM predicted in a recent report the U.S. would install 1,350 MW this year, 
falling to 800 MW next year and 1000 MW in 2003, assuming that the U.S. did 
not extend the PTC agreement. The figures would be significantly higher if 
the tax credit was extended, a BTM analyst said. 
According to the monthly magazine Renewable Energy World, the American Wind 
Energy Association forecasts 2,000 MW of new wind turbine installations in 
the U.S. this year. 
"We do not expect more huge orders from the U.S. until late this year as 
customers are awaiting an approval of the tax proposal, but we might get a 
few small orders," Poulsen said. 
Vestas has plans of a blade and assembly plant in the U.S. ready in case the 
tax credit deal is extended, he said. 
Poulsen rejected the idea of acquiring U.S. energy group Enron`s wind turbine 
arm Enron Wind Corp. with a world market share of six percent, which 
according to market sources has been put up for sale. 
"To control the massive market growth we have to grow organically," Poulsen 
said.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 



USA: Bandwidth trade struggles to gain footing.
By David Howard Sinkman

04/18/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, April 18 (Reuters) - Hailed as a new frontier for financial 
markets, bandwidth trading is struggling to get a footing as capacity piles 
up, prices fall and expectations float back to earth. 
A supply glut, especially on long distance routes between large cities, is 
dragging down prices and investment on new capacity has slowed considerably 
as demand flags. But trading will pick up in two to three years as the market 
matures, say analysts.
"There is nothing going on out there. The business is viable, but we are 
ahead of the curve," said Merrill Lynch analyst Donato Eassey. 
Bandwidth is the transmission capacity of an electronic line used to send 
data from one point to another, as on the Internet. The trading of bandwidth 
helps facilitates deals and hedges against risk. 
While the bandwidth market was all the rage the previous three years, this 
year has seen a fallout in the industry. 
Enron Corp., billed as the biggest bandwidth trader, said April 6 it would 
cut 20 percent of the jobs at its broadband unit because of slow demand for 
streaming media products to personal computers. 
"There will be some shake-out in demand, growth and pricing, but long-term 
demand and growth will be there," said Seth Libby, analyst at consulting firm 
The Yankee Group. 
MARKET FAILURES 
Market inefficiencies, such as unresolved issues like credit and market 
enforcement, have retarded trading. 
What is needed, according to San Francisco-based online exchange RateXchange 
Corp. , is a standardized contract that would provide the framework for 
commodity-like trading. 
Without such agreement, buyers and sellers of bandwidth need to agree on new 
terms for each transaction, said Michael Rose, RateXchange's director of 
business development. 
"We do not yet have a fully functioning market," said Rose. 
However, analysts liken today's trading market to the power market, which 
took more 10 years to get off the ground. 
"Today's market problems are just growing pains," said Rod Kuckro, managing 
editor of the Bandwidth Market Report, which is published by McGraw Hill Co. 
Kuckro sees growth picking up over the next three years. 
FALLOUT 
Market inefficiencies are not the only problem bandwidth trading faces. A 
supply glut has dragged down prices. 
Exact numbers are hard to come by in the bandwidth trading market. But 
industry experts say only about 10 percent, or even less, of existing fiber 
optic capacity for bandwidth is lit, or in use in the United States. 
"Obviously there is some capacity problems out there. And there will be 
funding problems going forward," said Credit Lyonnais Securities analyst 
Gordon Howald. 
It is now cheaper to buy or lease lines than to take the risk of digging in 
the ground and laying new lines. 
As a result companies are not investing as much in construction. For example, 
Enron slashed its capital spending on its fiber optic network to about $250 
million this year from an earlier estimated budget of $750 million. 
Demand for capacity has also fallen short of expectations. 
"The traditional bandwidth business plan read 'just build it and they will 
come,' but this did not pan out," said Libby. 
Consequently, today's market has more sellers than buyers. And as new players 
enter the market, like Global Crossing Ltd. and energy companies Dominion 
Resources and Dynegy Inc. , competition has heated up. 
But this might just be what the doctor ordered. 
As prices keep falling, carriers, who were reluctant to embrace bandwidth 
trading, are taking a long-look because of the increased efficiencies offered 
by trading. 
"Somewhat perversely, this fallout might hasten trading as companies are 
forced to compete more fiercely with new players," said Kuckro. 
LAST MILE HURDLE 
Think of driving from New York to Washington. The highway is mostly free of 
congestion, but traffic jams abound in the cities. 
The same holds true for bandwidth connections. Bottlenecks in the last mile 
have kept prices high, despite a glut in long-haul capacity and unused 
dark-fibers 
Bandwidth trading, which does not always provide a loop-to-loop service, 
suffers as a result. 
"Nobody want to buy long-haul capacity and then haggle and worry about the 
local loop," warns Seth Libby, who said he is unaware of any bandwidth trades 
that included the final link. 
However, analyst see the last mile problem as just another hurdle bandwidth 
trading will get around to deal with. 
"Somebody is going to step up to plate," said Libby. 
While analysts expect the majority of bandwidth deals to remain 
carrier-to-carrier, the trading market is expected to blossom as the kinks in 
the system get ironed out. 
"Everyone is dressed for a party, but there is no party to go to yet," said 
Donato Eassey. "But once we get the paths and the customers down the party 
starts."

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


BRAZIL: INTERVIEW-BG claims Brazil pipeline war victory.
By Andrei Khalip

04/18/2001
Reuters English News Service
(C) Reuters Limited 2001.

RIO DE JANEIRO, April 18 (Reuters) - Britain's BG Group Plc claims to have 
won a "litmus test" battle in Brazil by gaining access to a key natural gas 
pipeline, which marks a big step to a free market and a defeat for 
ex-monopoly Petrobras. 
BG's director for corporate affairs in southern South America, Francois 
Moreau, said the final decision earlier this week by the energy regulatory 
body ANP to allow BG to use the Bolivia-Brazil pipeline in 2001-2003 was an 
important victory, although not all of BG's demands were met.
BG has big expansion plans for its Brazilian distribution affiliate Comgas 
and the long-awaited access to the line that brings natural gas from BG's own 
production fields in Bolivia is crucial for the realization of those plans. 
"The ANP has confirmed that it wants the private initiative to have a greater 
role in the energy sector, that it stands for a competitive market and is 
ready to fight Petrobras. We view it as a test case for an open market in 
Brazil," Moreau said. 
The ANP already authorized U.S.-based Enron Corp. to use the pipeline, but 
only when it had idle capacity. Analysts now expect Enron and other companies 
to follow BG's suit and demand uninterrupted use of the pipeline. 
Under the present deal, BG is allowed to import 24.5 million cubic feet 
(700,000 cubic meters) of gas per day from April to August, and from 
September until the end of 2002 it can import 73.5 million cubic feet (2.1 
million cubic meters). 
The ANP's decision initially came out last month, but TBG, the gas 
transportation unit of Brazil's state-owned oil company Petrobras which 
operates the line, rushed to challenge it, insisting that it had no free 
capacity. 
"Petrobras sees the transportation as means to protect its monopoly. Even the 
ANP admits that there are elements of anti-competition actions in what they 
are doing," Moreau claimed. 
Petrobras officials said they had no comment on the issue. ANP said Petrobras 
could appeal to a court, but there was no way the ANP would review its 
decision. 
ANP president David Zylbersztajn told reporters on Wednesday that he saw the 
issue as closed and the parties involved would have to sign a contract in a 
week's time. 
He did not rule out fresh resistance from Petrobras, but warned that his 
agency was determined to tame the state energy giant that officially lost its 
monopoly rights in oil and gas production and distribution in 1997. 
"ANP's game is to crush this resistance," he said. 
Despite the important victory, BG has lost its own latest appeal with the 
ANP. The company had wanted a firm deliveries regime to last until end-2003, 
but the agency ruled that after 2002, TBG may interrupt deliveries on ANP's 
permission. 
However, Moreau said that he was now pinning his hopes on a new set of rules 
for gas transportation that the ANP is preparing and should release in May. 
Those were expected to limit Petrobras' role in the future expansion of the 
gas transportation system, provide more transparency in striking contracts 
for delivery and, in general, bring more healthy competition to the market. 
He said that in his view, demand for natural gas in Brazil was likely to rise 
with time, requiring a 50 percent expansion of the Bolivia-Brazil pipeline 
that now can carry 1.1 billion cubic feet (30 million cubic meters) of gas 
per day. 
Brazil aims to boost the share of natural gas in its energy market to 10-12 
percent by 2010 from the present fledgling 3 percent by encouraging the 
construction of gas-fired electric energy plants to alleviate the country's 
heavy dependence on hydroelectric plants and by greater industrial use of 
gas. 
Moreau said BG was interested in taking part in any expansion projects, both 
of the pipeline and of the network inside Brazil, as well as signing more 
long-term transportation contracts "if the environment is competitive." 
BG is already building a pipeline to transport gas from Argentina to southern 
Brazil, where it will be linked to an existing pipeline and carry gas to 
Comgas' base of Sao Paulo - Brazil's main industrial hub and richest state. 
Moreau said the group, which bought Comgas two years ago for nearly $1 
billion, planned to triple Comgas' sales of 6 million cubic meters of gas per 
day three years from now and boost them 10-fold by 2011.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Enron India Sends Arbitration Notices To State Govt

04/18/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- In the ongoing tussle between the Dabhol Power Co., 
India's Maharashtra state government, the Maharashtra State Electricity Board 
and the government of India, DPC Wednesday served two notices of arbitration 
on the Maharashtra government, its spokesman said. 
A subsidiary of U.S. energy major Enron Corp. (ENE), DPC has a controlling 
65% stake in the controversial $2.4 billion joint-venture 2,184-megawatt 
electric power project in the western Indian state of Maharashtra, which 
supplies power to the MSEB. The project is India's biggest foreign 
investment.
In a faxed company statement, Enron India spokesman Jimmy Mogul said the 
notices were served because the Maharashtra government had failed "to honor 
its obligations under the government of Maharashtra State Support Agreement 
and Supplemental State Support Agreement," signed in 1994 and 1996, 
respectively. 
DPC said that in the agreements, GoM had pledged to "support and encourage 
the further development and completion of the Dabhol project." It added that 
"without justification" the GoM has gone back on these agreements, which has 
"adversely and materially impacted DPC's ability to perform under its 
contractual agreements." 
The statement added that as part of the arbitration process, an independent 
three-person panel will be set up to determine whether GoM has "failed to 
comply with its obligations." 
Under a 1996 counter guarantee agreement, the federal government is obliged 
to pay Enron when MSEB defaults. Enron invoked that guarantee in February, 
marking the first time in India's history that a company has invoked a 
federal guarantee, when the state utility said it couldn't afford to pay DPC. 
The state government finally paid $17 million in outstanding bills. 
DPC and the federal government recently started a conciliation process, to be 
governed by the provisions of the U.N. Commission on International Trade Law, 
with the aim of resolving DPC's latest dispute with MSEB. DPC says MSEB owes 
it 1.02 billion rupees ($1=INR46.8550) for power supplied in December 2000. 
For its part, the MSEB said it wanted the power bill offset against a INR4 
billion fine it levied on DPC for what it said was the non-supply of power 
for intermittent periods between October 2000 and the end of January. 
Dabhol, India's largest private power plant currently under construction, was 
scheduled for commissioning in two phases. The project's first phase, a 
740-megawatt power plant, has already been commissioned and phase two is due 
to be completed later this year. 
Critics object to Dabhol charging INR7.1 a kilowatt-hour for its power, 
compared with INR1.5/KWh charged by other suppliers. 
-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427; 
himendra.kumar@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Enron may sell some Brazil assets - SAmerica chairman

04/18/2001
AFX News
(c) 2001 by AFP-Extel News Ltd

SAO PAULO (AFX) - Enron Corp is considering the sale of some energy 
distribution and gas assets in Brazil but continues firmly interested in the 
domestic energy sales market, financial daily Valor Economico quoted Enron 
South America chairman Orlando Gonzales as saying. 
"We are always revaluating assets. They are always up for sale if the offer 
is good. Our strategy is to maximise the return to shareholders and for that 
reason, we are always revaluating our positions in assets, markets and 
investments," the paper cited Gonzales as saying.
mg/as For more information and to contact AFX: www.afxnews.com and 
www.afxpress.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.