News item | 2010-06-15 | 09:30 AM

Energy News Europe - week 23, 2010

Czech Republic

CEZ earns CZK 30.8bn from foreign acquisitions

Hospodarske Noviny, 2010-06-11
CEZ, a Czech energy group, has announced that cumulated operating profits of its overseas acquisitions have reached CZK 30.80bn (EUR 1.20bn USD 1.45bn) since 2005. In 2009, the revenues from foreign operations amounted to CZK 60bn and the company will receive CZK 5.5bn in dividends from these companies. The sales of new acquisitions were worth CZK 22.2bn. Total investments outside the Czech Republic amounted to CZK 73bn.

The company's activities in 2009 included the acquisition of a Turkish electricity distributor for CZK 3.3bn. Together with the local partner, Akkok Group, CEZ plans to invest CZK 55bn in the next five years. In 2010, CEZ plans to launch four hydroelectric power plants in Turkey with a combined output of 285 MW. In Germany, CEZ and a Slovak private equity group J&T bought Mibrag, a brown coal mine. CEZ also completed the acquisition of the Albanian electricity distributor OSSH for EUR 102mn but still battles with widespread illegal use of electricity.

In Bulgaria, the company is involved in several court cases over price regulation. Austrian media reported that Bulgarian Prime Minister Boyko Borisov even threatened to renationalise energy companies. On the other hand, in Romania CEZ launched the first stage of the offshore wind power plant Fontanele. The company has said that it is in talks with European Investment Bank (EIB) on funding the Fontanele and Cogealac wind power projects. At the end of 2009, CEZ owned 65 companies abroad where it employed 16,000 people. Analysts say that the company still does not use a full potential of some companies, often due to particular problems in certain markets.
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Denmark

Construction of the world's largest biogas plant to start

Børsen, 2010-06-07
The construction of the world's largest biogas facility, Maabjerg Bioenergy, will start today (7 june 2010). The plant has a capacity to convert 500,000 tonnes of biomass a year to pure energy in the form of heating and electricity. The initiators behind the biogas project are local power companies in cooperation with a couple of hundred farmers who are to supply animal waste to the plant. Maabjerg bioenergy plant will reduce Danish CO2 emissions by 50,000 tonnes a year.
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New power cable across the Great Belt to be taken into use in August

Jyllands-Posten, 2010-06-05
Competition in the Danish electricity market is expected to tighten as from 20 August 2010 when the Danish electricity grid operator Energinet.dk takes a new under-water 600 MW direct current cable between across the Great Belt. This is the first time a power cable connects the eastern part of Denmark with the western part. The cable will result in better power supply safety and reduced dependence for eastern Denmark on Sweden for electricity supply
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Europe

Greenhouse gas emissions fall by 2% in 2008

Press Release, 2010-06-02
The European Environment Agency has published results showing that greenhouse gas emissions in the EU fell in the EU15 in 2008 by 1.9% compared to 2007, while at the same time the economy grew by 0.6%. This drop takes emissions in the EU15 to 6.9% below their base year levels. In most cases the base year in question is 1990. In the same period the EU27 saw a 2% drop in greenhouse gas emissions, to 11.3% below 1990 levels.
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Carbon capture and storage framework finalised

Press Release, 2010-06-08
The European Commission has finalised a new EU-wide regulatory framework that should lead to the safe implementation of both carbon capture and carbon storage technologies. The framework includes guidelines ensuring that emissions from carbon capture and storage will be monitored across Europe at a consistent level.

The framework attempts to provide regulatory certainty and finalises the most comprehensive legal framework on carbon capture and storage in the world. The guidelines are an amendment of the Commission's Decision 2007/589/EC.
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New biofuel Decision and Communications adopted

Press Release, 2010-06-10
The European Commission has adopted a Decision and two Communications aimed at encouraging governments and industry to create biofuel certification schemes that include biofuels from outside of the EU. This is help in the implementation of the EU's biofuel requirements, which call for sustainable reductions in greenhouse gases.
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Finland

EU Commission wants clarification on electricity sales to shareholders

Helsingin Sanomat, 2010-06-06
The Finnish authorities will have to submit a response to the EU Commission by the end of June 2010 on whether Finnish power companies are guilty of tax evasion when they sell electricity to their shareholders at cost price. The law forbids the sale of products to shareholders at special prices, but the interpretation has been less rigorous in the case of electricity companies. The interpretation has been considered legal as it is supported by two decision by the Supreme Administrative Court from the 1960s.

The European Commissioner for Competition, Joaquín Almunia, has requested a clarification from Finland in the issue. According to Finnish Members of the European Parliament Satu Hassi and Heidi Hautala who sent a written question to the EU about the issue, the Fennovoima power consortium would not be considered an alternative for building a Finnish nuclear power plant if the principle for selling to shareholders did not exist in Finland. According to Fennovoima, the complaint to the EU and the request for clarification are completely unfounded as there is nothing strange in the principle.

Also power company Teollisuuden Voima (TVO) sells electricity to its shareholders at prices that are lower than the market price. According to the Ministry of Employment and the Economy, over one third of Finland's electricity production and some of its heat production works on the principle of cost price.
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Germany

No legal certainty for nuclear energy companies

Financial Times Deutschland, 2010-06-07
A spokesman for German Economy Minister Rainer Brüderle told Tuomo Hatakka, CEO of Vattenfall Europe, that the German coalition government of CDU/CSU and FDP cannot grant legal certainty to energy companies regarding the planned extension of the operating time of nuclear power stations.

Due to the dispute with the SPD, the final decision may have to be made by the German Federal Constitutional Court. If the German Bundestag [the lower chamber of the German parliament] approved an extension of the operating time of German nuclear power stations from 32 to 60 years, the SPD threatens to go the constitutional court, arguing the extension requires approval by the Bundesrat [the upper chamber of the German parliament] where the current coalition government does no longer have a majority.

In turn, the federal states governed by the CDU threaten to bring suit against the withdrawal from nuclear energy decided by the previous coalition government of SPD and Greens, claiming it also happened without the approval of the Bundesrat. The Federal Constitutional Court would thus have to declare both decisions, i.e., the extension of the operating time and the withdrawal from nuclear energy, as unconstitutional.
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New nuclear fuel assembly tax as of 2011

Handelsblatt, 2010-06-09
Reportedly, the new fuel assembly tax that the German government intends to impose with effect from 2011 on nuclear power plant operators E.ON, RWE, Vattenfall and EnBW is to be also implemented if NPPs' operational lives will not be extended. Resulting tax receipts of EUR 2.30bn (USD 2.75bn) a year are to be also used to cope with dilapidated permanent storage sites for nuclear waste.

The government intends to also launch the latter tax with regard to additional revenues energy groups would generate if NPPs' operational lives will be extended. NPP operators oppose the planned tax.
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Ireland

Rapid rise in wind farms envisaged

Irish Independent, 2010-06-08
New figures indicate that the number of wind farms in Ireland will rise from 117 at present to 361 by 2020, as the government looks to hit the European Union's goal by this time of generating 40% of of power from renewable sources. Kerry is forecast to have 66 wind farms, with Donegal and Cork having 52 and 46 respectively.

It is forecast that 6,567MW of power from renewables will be connected by 2020, against 1,379MW at present. The Irish Wind Energy Association says that meeting the 40% goal will entail around EUR 14bn (USD 16.69bn) being invested in wind farms. Eirgrid, which operates the national grid, says that Ireland should meat the renewable energy goal for 2010 of 15%.
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Italy

EON and Gdf-Suez sign nuclear memorandum of understanding

La Repubblica, 2010-06-08
German utility EON and Gdf-Suez have signed a memorandum of understanding which will mean that the two companies will create a consortium that will build nuclear power plants in Italy. The EON and Gdf-Suez consortium will rival that of Enel and EdF. Also, EON and Gdf-Suez are willing to allow local utilities and industrial groups that consume a lot of energy to take part in the consortium.

EON is the fourth biggest operator on Italy's electricity market while Gdf-Suez is the fifth biggest electricity company and the third biggest gas supplier in the country. EON and Gdf-Suez have stakes in 30 power plants in France, Germany, Belgium and Switzerland and out of these EON directly manages nine of them and Gdf-Suez manages seven of them.
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Norway

Full implementation of EU emission trading system in 2013

Dagens Næringsliv, 2010-06-09
The Norwegian government has decided to join the EU greenhouse gas emission trading system fully from 2013. Norway is already tied to the system, but does not follow the same criteria as the EU countries when handing out the quotas. A smaller share of the quotas in Norway are free of charge for the industry.

This will be changed from 2013, so that Norwegian onshore businesses will compete on the same terms as their competitors in the EU. The emission trading system will also be extended to more sectors than today, to cover most of the industry subject to international competition including aluminium. The government still wants an exemption for the oil and gas sector, however, so that it still pays for all quotas, as is the case today.
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Spain

Consumer groups against any proposal of electricity tariff rise in July

ABC, 2010-06-08
The main consumers associations in Spain have spoken out against a possible increase in electricity tariffs in July 2010 as proposed by the government, saying that in the current crisis situation, it is a completely unacceptable measure to impose on families. The rise being considered is 10% for domestic and small commercial customers and 5% for medium industry. No rise is being planned for big industry. The rise would also come at the same time as the rise in VAT, which for electricity will increase from a rate of 16% to 18%.
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Sweden

Svenska Kraftnät determines 2010/11 effective reserve

Nordisk Industri, 2010-06-09
Svenska Kraftnät has determined what the Sweden's effective power reserve for the winter of 2010/11 will look like. The reserve is split into two parts, electricity production and consumption reduction. 583 MW of 1892 MW will be delegated to consumption reduction, with Swedish forestry companies Stora Enso and Holmen accounting for 150 MW and 215 MW, respectively. For electricity production, power company Karlshamn Kraft will stand for 1,330 MW, which is by far the most of the five Swedish power companies named.
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United Kingdom

Nation on track to exceed emissions goal

Financial Times, 2010-06-09
A Department of Energy and Climate Change report reveals that a 7.5% decline in electricity demand in the recession means the UK is on track to exceed its greenhouse gas emission reduction goals. The nation's greenhouse gas emissions are expected in 2020 to be around 36% less than the levels for 1990, although it notes that electricity demand is expected to increase by this time by around 2%.

European Union members have vowed by 2020 to reduce emissions by 20%, with the UK government keen for a 30% reduction. Meanwhile, a Mott MacDonald report states that offshore wind is likely to remain considerably more expensive than onshore turbines, as well as being costlier than nuclear power.
© Esmerk