US giant takes stake in Hsing Yu

US-based power giant NRG Energy Inc has taken an approximately 60-percent stake in Hsing Yu Energy Development Co (新宇汽電共生), which sells power to some of Taiwan's largest high-tech companies in the Hsinchu Science-based Industrial Park (新竹科學園區).

David Peterson, NRG's chairman and chief executive officer, said the move was "a small investment in terms of capital and risk, but serves as a valuable toehold from which NRG may evaluate expansion into specific Asian markets."

There was no details of the value of the deal and executives at Hsing Yu were unavailable when sought for comment yesterday.

Hsing Yu's position as currently the only private power producer in the Hsinchu Science-based Industrial Park and supplier to some of Taiwan's most important chip makers were cited as key reasons for NRG's investment.

"Hsing Yu has a very strong business model and builds its projects in science-based industrial parks to serve companies in Taiwan's semiconductor manufacturing industry," said Keith Hilless, managing director of NRG Asia-Pacific.

"Hsing Yu's partners include key players in Taiwan's economy and its customers are some of the country's largest companies," Hilless said.

Indeed Hsing Yu has benefited greatly from the supply problems plaguing the distribution system of the state-run Taiwan Power Co (Taipower, 台電) in what is called "Taiwan's Silicon Valley."

Since opening for business in June 1999, Hsing Yu has racked up a customer list including chipmakers Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電) and Powerchip Semiconductor Corp (力晶半導體), who are annoyed by frequent power outages.

Last year a total of 40 power disruptions were recorded in the park, according to the Cabinet-level Energy Commission.

Currently Hsing Yu provides 170 megawatts of power with a combined cycle gas turbine cogeneration facility in the Phase I area of the Hsinchu park.

Hsing Yu is developing a 245MW expansion of the Hsinchu facility and a new 490MW greenfield project at the Tainan Science-based Industrial Park (台南科學園區) in southern Taiwan, according to NRG's statement.

As of last month, Minneapolis-based NRG has net ownership interest in approximately 67 projects in operation and under construction representing approximately 21,612MW of capacity with plans to expand capacity to a possible 75,000MW by 2005, according to company data.

By comparison Taiwan's total installed capacity at the end of last year amounted to 29,634MW, according to Taipower.

Founded in 1989, NRG develops, acquires and manages a variety of energy-related operations worldwide including competitive energy production and cogeneration facilities, power marketing, thermal energy production and transmission, and resource recovery facilities.