News item | 2010-01-28 | 13:00 PM

Energy News Europe - week 03, 2010

Belgium

GDF Suez ordered to reduce Fluxys stake
Le Soir de Bruxelles, 2010-01-15
The French energy company GDF Suez, which is the parent company of the Belgian energy company Electrabel, holds a 38.5% stake in the Belgian gas distribution network operator Fluxys. This is despite the introduction of a law demanding GDF Suez reduce its stake in Fluxys to 24.99% before 31 December 2009. The Belgian Government believes that a reduction of GDF Suez's stake is necessary in order to avoid a conflict of interests and is demanding that the French company sell a 13.5% stake in Fluxys. It is thought that this sale could generate EUR 200mn (USD 287mn).
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Denmark

Dong Energy to spread risks
Børsen, 2010-01-21
Denmark's state-owned energy group Dong Energy is shifting focus from the UK offshore wind energy market to the German and Dutch markets to avoid becoming dependent on one single market and to avoid one-sided investments. Dong Energy's MD Anders Eldrup expresses uncertainty about the future of the UK system of subsidies to offshore wind farms. For this reason, Dong has bought out PNE Wind AG of the two German offshore wind farm projects Borkum Riffgrund 1 and 2. It has also invested in Dutch wind farm projects Den Helder I, Breeveertien II and West Rijn in cooperation with Scottish and Southern Energy. And it has invited Scottish and Southern Energy to join it in its present wind farm projects including the important Walney project. Dong is also cooperating with Siemens Project Ventures in the wind farm project Lincs off the British isles.
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Estonia

Opening of electricity market unavoidable
E24.ee, 2010-01-15
In Estonia, the delay in the validation of the partial electricity market opening (35% of the market),targeted to take effect as of 1 April 2010, would harm Estonia's image, says Taavi Veskimägi, chairman of the power transmission grid Elering. According to Elering, the opening of the market by the set deadline is unavoidable in an effort to launch the building of Estlink 2, the second undersea transmission link between Estonia and Finland whereas the delay could postpone the EEK 1.60bn (EUR 102.26mn USD 148.26mn) investment in the project into 2017. Estonia has committed itself to full opening of the electricity market as of 2013.
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Europe

Recession reduces interest in clean energy investments
Helsingin Sanomat, 2010-01-17
The recession has reduced CO2 emissions globally, but at the same time, it has reduced industrial companies' interest in investing in new and clean production as the price of emission allowances has gone down. According to consultancy firm New Energy Finance, investments in clean energy production started to decrease in Europe and worldwide in 2009. Many parties have started to criticise the EU's emission reduction targets as too soft. According to consultancy firm Point Carbon, the prices of emission allowances will most likely fall from the present if the EU does not commit to tighter emission cuts. The EU should commit to reducing emissions by 30% in stead of 20%. Several energy companies have calculated that the price of emission allowances should more than double from the present for investments in clean production to be profitable. According to GreenStream, that provides brokerage, advisory and financial services related to green renewable electricity certificates and emissions trading, the price of emission allowances is not the only way to renew the energy sector. The energy industry will be eager to invest if it is easy to acquire permits and there are investment subsidies.
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New offshore wind energy grows 54% in 2009
Your Renewable News, 2010-01-19
A total of 199 offshore wind turbines split between eight new offshore wind farms achieved grid connection in Europe during 2009, adding 577 MW of installed capacity to the network which is a rise of 54% compared to the new capacity added in 2008. The European Wind Energy Association (EWEA) says another ten offshore wind farms plan to come online in 2010, with a further 1,000 MW of capacity resulting in 75% growth from 2009. There are 17 offshore wind farms under construction in Europe at the moment, with over 3,500 MW of capacity. Over 50% of this is located in UK waters. Another 52 offshore wind farms with over 16,000 MW of capacity have secured full planning permission. Half of this capacity is planned for German waters. Turnover for the offshore wind industry came to around EUR 1.50mn (USD 2.11mn) in 2009, and forecasts expect this to double to EUR 3bn in 2010, boosted by economic stimulus funding of EUR 255mn by the EU.
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Finland

Helsinki Energy not keen on nuclear district heat
Uusimaa, 2010-01-19
In Finland, power company Helsinki Energy is not keen on the study that was made by consultancy firm Pöyry for power company Fortum that favours the transmission of nuclear district heat from Loviisa to the Helsinki metropolitan area. According to CEO Seppo Ruohonen, the company has its own development programme where increasing the use of renewable energy sources plays a central role. Nuclear district heat does not fit in with this concept. It would be easy to build a branch pipeline to Porvoo from the nuclear heat pipeline from Loviisa to Helsinki. According to power company Porvoon Energia, piping nuclear district heat to the city does not seem profitable. Porvoo already has plenty of production capacity for district heat, and it is based on biofuels.
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France

EDF EN increased solar energy activity in 2009
Easybourse.com, 2010-01-18
On 31 December 2008, French renewable energy company EDF Energies Nouvelles (or EDF EN) had 20MWp of solar energy production capacity. By 31 December 2009, the capacity had increased to 80.9MWp. Including capacities in construction, total solar energy capacity was 219.7MWp as of 31 December 2009 compared to 49.9MWp in late 2008. Its goal is 500MWp by late 2012. EDF EN sold a ground solar power station in Reunion (5.1MWp) and 11.6MWp of roof projects in France. During the second half of 2009, EDF EN established 53.3MWp (49.2MWp net) of self-operated solar energy capacity in Canada, France and Italy.
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Energy reform may be delayed to 2011
Les Echos, 2010-01-20
Three months after the first attempt to reform the electricity market through the Nome bill (New organisation of the electric market), the Energy and Climate Authority presented a new bill, which it hopes will be brought to parliament after regional elections in March 2010. The move comes after French electricity company EDF aggressively opposed the reform, which aims to encourage competition by making EDF nuclear energy supply available to competitors at a regulated price. According to EDF Executive Vice President Jean-Louis Mathias, the problem is that it is impossible to separate the nuclear energy from the rest of the company's energy sources. The EDF therefore want to stick to a price it claims to be the complete price of nuclear energy, which it deems to be EUR 46 (USD 67.72) per MWh. Competitors say that only a price less than EUR 35 (USD 50.01) per MWh would allow competition on the retail energy market. The European Commission, which could force EDF to be spun off into several smaller companies, hopes to have reforms set in place before mid-2010. If the government waits until regional elections though, the deadlines will not be met. While nobody in Paris believes the reforms can be made before 2011, countries like Germany have been quicker to put in place reforms.
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Germany

EnBW said to be interested in Steag
Financial Times Deutschland, 2010-01-22
German energy group EnBW is said to be interested in the acquisition of a stake in the Evonik subsidiary Steag. Industry circles confirmed that EnBW chairman Hans-Peter Villis voiced such considerations towards energy managers. However, it is still open how the company could finance the acquisition of a stake in Steag. An EnBW spokesman played down the considerations and merely said that electricity generation is a strategic topic for the company. This does not inevitably mean that EnBW is interested in Steag. EnBW already expanded its power plant capacity by 2,000MW in 2009.
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Lithuania

Ignalina nuclear plant's loss LTL 1.4bn in 2009
Baltic News Service, 2010-01-20
Lithuania's Ignalina Nuclear Power Plant (IAE) suffered a loss of around LTL 1.394bn (EUR 404.1mn) in 2009, compared to a net profit of LTL 2.02mn in 2008. The large loss was due to the costs related to the nuclear plant's decommissioning. IAE's annual sales totalled LTL 597.3mn in 2009, which was slightly up from LTL 596.7mn in 2008. IAE had projected an annual loss of LTL 28mn on revenues of LTL 575mn in 2009. The nuclear plant was shut down on 31 December 2009.
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Netherlands

Shareholders still want to sell Borssele power plant
De Volkskrant, 2010-01-19
The former shareholders of Dutch energy firm Essent, which include regional and local governments, still want to sell the Borssele nuclear power station to German firm RWE, which bought Essent in 2009. A court banned the shareholders from selling Borssele to RWE because of doubts that RWE could fulfil public safety requirements. However, the shareholders have taken the matter to the high court.
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Poland

EBRD might support EDF's wind farm project with EUR 55mn loan
Parkiet, 2010-01-22
It has been revealed that the EBRD is considering granting a long-term loan for EDP Renewables, which is building a 120 MW wind farm in Poland, the so-called Margonin Wind Park. The value of EDP's project is estimated at EUR 166mn (USD 233.84mn). The value of the loan from the EBRD might reach up to EUR 55mn.
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Sweden

Svenska Kraftnät shelves plans for Kriegers Flak link
Svenska Dagbladet, 2010-01-18
The Swedish grid Svenska Kraftnät has shelved plans to build a power link between Sweden, Germany and Denmark via the planned offshore wind farm at Kriegers Flak. The body does not believe the proposal is sound as long as construction has not been completed in the Swedish part of the Kriegers Flak venture. The decision by Svenska Kraftnät means the organisation will not use project funding offered by the European Commission.
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Wind power station building plans put on hold
Dagens Nyheter, 2010-01-20
The continued progress of wind power station building in Sweden has threatened by a lack of finance. 2009 was a record year for building wind power stations, although 2010 is expected to develop slower based on the fact that profitability levels from financing stations is low. Numerous project have been put on hold, including the nation's two largest offshore plans, Kriegers Flak in the Baltic Sea and Stora Middelgrund off the coast of Halland. Offshore wind power stations have felt the effects more than land-based building projects. Ola Gejervall, MD for Universal Wind Offshore, hopes that support programs for offshore wind power projects will be erected in the near future. Ola Alterå of Sweden's Ministry of Industry, Employment and Communications (Näringsdepartementet) is hoping that funding can come from other sources, however. Alterå hopes that foreign interest will come as a result of the EU directive passed in 2009 and that foreign sponsorship in Swedish wind power will be the relief needed for continued development.
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Switzerland

Lack of competition in electricity market
Le Temps, 2010-01-17
Swisselectricity, a company that provides solutions to reduce electricity bills, has said that the Competition Commission, Comco, has ignored three complaints filed by the company. Swisselecricity said that the production companies are refusing to sell to industrial customers and instead reserve their production to distribution companies. The electricity market was opened a year ago for large consumers (representing 5,500 companies). The opening was expected to generate savings especially for companies in the French-speaking region because production prices are lower in the German-speaking region.
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United Kingdom

Internatonal Power talks with GDF collapse
Independent, 2010-01-19
Talks between International Power (IP) and France's GDF Suez have collapsed. The talks could have seen the two firms combine their international assets, or even go ahead with a full merger. However, IP admitted that the talks had now ended. IP's share price had risen by almost a third over the last two months, amid speculation that GDF was planning a takeover bid. Citigroup says that GDF may still launch a takeover offer, and could pay up to 650p per share given its current financial structure, though a value of closer to 400p per share has been mooted. Such a deal would raise GDF's EPS by 6% in 2011. Analysts will be disappointed with the collapse, with many arguing that such a deal would be a good fit. IP is one of the UK's biggest energy producers, while it also has assets in North America, Asia, Australia and the Middle East. GDF, meanwhile, is Europe's fifth largest producer. A takeover deal, however, could attract political criticism, particularly over the sale of another British firm to a foreign firm, and one which is 35% owned by the French government.
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Disclaimer: The newsletter "Energy News Europe" contains an overview of energy-related news published in European media. It does not represent the views of Vattenfall or its management.