News item | 2011-08-16 | 09:22 AM

Energy News Europe - week 32, 2011

Austria

Standstill of Lower Austrian solar market could affect country

Wirtschaftsblatt, 2011-08-10
According to the association Austria Solar, a complete breakdown of the Lower Austrian market for solar plants would have a negative impact on the whole country in the medium-term. This comes after a significant decline of more than 70% has been recorded in the Lower Austrian solar market in the first six months of 2011. And the market has come to a standstill in the past two months. The association is thus demanding the immediate reintroduction of direct funding for solar plants, which has been scrapped at the beginning of 2011.
© Esmerk

Belgium

Number of energy companies exceeded 500 in 2010

Le Soir de Bruxelles, 2011-08-08
According to SPF Economie, since the liberalisation of the energy market the number of energy companies has doubled. The number of energy firms in Belgium exceeded 500 in 2010, compared to 200 in 2003. The market is still dominated by incumbent operators. Luminus and Electrabel account for between 70% and 85% of the electricity market. Incumbent operators account for between 83% and 96% of the gas market.
© Esmerk

Nest-Energie expected to build new power stations

L'Echo, 2011-08-11
Nest-Energie, which is 99.6% controlled by the Belgian division of the French energy company EDF, has been authorised to build two gas vapour power stations at the Port of Ghent. Each of the two installations will product 460MW of electricity each, with a total of 920MW being produced. EDF had planned two such projects in Belgium but has had to sell its Dilsen-Stokkem project in order to comply with a European Commission ruling allowing EDF to purchase SPE-Luminus.

The investment at the Port of Ghent is expected to cost between EUR 700mn (USD 989.44mn) and EUR 800mn and has yet to be confirmed by EDF. However, the Nest-Energie website indicates that work on the site may start in 2012.
© Esmerk

Denmark

Wind power industry concerned about potential second crisis

Børsen, 2011-08-12
The Danish Wind Industry Association (Vindmølleindustrien) is increasingly worried about the industry outlook given the current debt crisis and stock market turbulence. According to MD Jan Serup Hylleberg major problems lie ahead should current instability become a long term crisis and this just after the industry lost 70% of its market in the 2008/09 crisis. The stimuli packages being considered by Denmark and other European countries could help the industry according to Hylleberg. He emphasizes that previous government investments in the industry have helped with job creation.
© Esmerk

Europe

Electricity prices could rise by 33%

SME, 2011-08-09
According to the consultancy company A.T. Kearney by 2020 electricity prices in Central Europe could rise by over 33%. It is estimated that one MWh of electricity on the bourse in Leipzig, on which Central European electricity prices are dependent, should cost by EUR 20 (USD 28.71) more than currently. Peter Marcan, an analyst from the Slovak Institute for Energy Safety, said that it is expected that electricity prices will go up mainly due to lower volume of electricity generated from nuclear plants. In 2015 Germany should shut down more nuclear plants and will have to replace them with other sources.
© Esmerk

France

CIC agrees to take around 30% of GDF Suez upstream interests

Les Echos, 2011-08-08
China Investment Corporation (CIC) has agreed to pay up to EUR 3bn (USD 4.29bn) for around 30% of GDF Suez exploration and production activities. These will be separated off, and a capital increase will follow by end 2011. CIC will be invited to invest alongside GDF Suez in the Asia Pacific region excepting China. It will look to forge partnerships with Chinese companies to respond to calls to tender in electricity generation. In return, CIC will help GDF Suez to secure contracts, and financing from Chinese banks. This investment by CIC will help speed the EUR 10bn (USD 14.31bn), three-year divestment programme announced by GDF Suez to help clear its debts. It will also bring welcome financing.

Between 2003 and 2008 GDF Suez sunk some EUR 6bn (USD 8.59bn) into upstream activities. Along with the gas sales and purchasing divisions from which they will now be split, GDF Suez upstream activities yielded 2010 turnover of EUR 20bn (USD 28.62bn). They accounted for close to 70% of the unit's net operating profit of EUR 2bn (USD 2.86bn). An announcement on the deal is expected on 10 August 2011. Insiders say that it has already secured the award of a contract for a floating gas terminal for a large Chinese city.
© Esmerk

E.ON prepares for hydroelectricity tenders

Hydroplus, 2011-06-01
German energy group E.ON has announced that it would like to make a bid for each of the hydroelectricity tenders set to be launched in France, when the market is opened up. However, it has raised procedural questions regarding the exact content of the dossiers for each concession, whether candidates will be able to inspect the installations and whether performance measurements will be possible. It has also questioned delays in starting the process. It already operates 212 hydroelectricity plants in Europe, with a total annual production of 18.5 TWh
© Esmerk

Germany

EnBW to bet more on collaborations with municipal utilities

Handelsblatt, 2011-08-08
EnBW, Germany's third largest energy group, intends to intensify alliances with public utility companies (Stadtwerke). EnBW, which has said it will be also backing the foundation of new utilities, is already running 40 cooperations with public utility firms. Furthermore, EnBW CEO Hans-Peter Villis favours joint investments in the erection of wind turbines. EnBW is already collaborating with 19 utilities in the Baltic 1 offshore wind farm project.
© Esmerk

RWE expects operating result to decrease by 25% in 2011

Süddeutsche Zeitung, 2011-08-09
German energy group RWE meanwhile expects operating result to decrease by 25% in 2011. Up to present, the company had expected operating result to decline by 20%. RWE therefore intends to reorganise the group more radically than planned up to present. Up to present, RWE CEO Jürgen Großmann had planned to generate up to EUR 8bn (USD 11.34bn) through the sale of divisions within the course of three years. The sale of divisions is now to generate up to EUR 11bn. The group examines for example the sale of its gas subsidiary RWE Dea. Furthermore, RWE intends to generate EUR 2.5bn through a capital increase and the sale of own shares.
© Esmerk

E.on confirms plans for massive job reductions

Die Welt, 2011-08-11
E.on, the German energy group, is planning massive job reductions, confirmed E.on CEO Johannes Teyssen without giving detailed numbers. According to Teyssen, concrete decisions will be made in autumn 2011. He said that E.on's administration would have to be streamlined and that redundancies would not be ruled out.

It is understood that E.on is planning to cut up to 11,000 out of 80,000 jobs worldwide. According to the Ver.di trade union, around 6,000 jobs are at stake in Germany alone. Teyssen underlined that E.on is aiming to save EUR 1.5bn per year. In the second quarter of 2011, the energy group suffered the first loss in its entire history due to the change in Germany's nuclear policy, unfavourable gas procurement contracts and lower gains from the power trading business. The consolidated loss for the second quarter of 2011 amounted to EUR 382mn.
© Esmerk

Italy

EOn could consider divestments

Milano Finanza, 2011-08-11
Reportedly, German energy utility EOn plans to sell some of its Italian assets as part of its overall loss cutting strategy. These include the 530 MW hydroelectric power plant of Terni and the 980 MW thermoelectric power plant of Fiume Santo (Sassari). The company would have already had contacts with Italian utility Acea, French energy group GdF and Russian peer Inter RAO.

In particular, EOn would have already discussed asset exchanges with GdF, which is interested in growing in Italy after the asset separation with Acea, while the German utility would have eyed GdF's assets in Brazil and other South American countries. EOn could also consider assigning the role of Chairman and CEO of its Italian unit EOn Italia to Miguel Antonanza, following the resignation of CEO Luca Del Fabbro.
© Esmerk

Netherlands

Essent profits down 46% in first half 2011

De Volkskrant, 2011-08-10
Dutch energy company Essent recorded a Ebit of EUR 187mn (USD 268.41mn) in the first half of 2011. This is a decrease of 46% compared with the first six months of 2010. The decline has been attributed to a decrease in the demand for gas as well as the transfer of its gas trading activities to parent company RWE. Essent has written off EUR 271mn on its production capacity due to a worsening in the ratio between electricity generated and the quantity of raw materials required.
© Esmerk

Norway

Property tax for power stations causes disagreement between Ministries

Nationen, 2011-08-12
The Norwegian Ministry of Finance and the Ministry of Local Government and Regional Development are in disagreement over future property tax rates for power stations. While the Ministry of Finance wants to maintain the current system with a minimum and maximum rate that municipalities can charge the Ministry of Local Government wants to scrap it. Instead its wants the property tax to be based on turnover. Estimates by the Ministry of Finance show that it would increase tax revenues by NOK 1.17bn (EUR 148.55mn USD 211.20mn) but argues it would be unevenly distributed among the 200 municipalities, with 37% of the increase going to ten municipalities.
© Esmerk

Poland

Warsaw-based energy company Stoen might be sold by RWE

Wirtualny Nowy Przemysl, 2011-08-10
According to information obtained by the Polish daily Rzeczpospolita, the German RWE, which is in the second quarter of 2011 made a EUR 229mn (USD 323.69mn), might sell its Polish branch, the Warsaw-based Stoen, along with other foreign and German assets. Stoen controls 5% of the Polish electricity trading market.
© Esmerk

Russia

RusHydro planning to build tidal power plant

REGNUM, 2011-08-09
The state-owned company RusHydro will form a limited liability company Innovative Centre of Tidal and Wave Energy, which will focus on design and construction of tidal power plants. Founders of the centre are Hydroinvest and Leningradskaya PSP, the latter will make 99% of the share capital worth RUB 500,000. It is planned to build pilot tidal power plants: Severnaya in the Murmansk region and Mezenskaya in the Arkhangelsk region (North-West). The capacity of Mezenskaya PSP will be 8 GW. The Scientific Research Institute of Power Structures, a unit of RusHydro, will provide technology.
© Esmerk

Sweden

'Electricity supplies sufficient for cold winter'

Dagens Industri, 2011-08-10
Sweden's electricity supplies will be sufficient even at peak hours next winter in case of a cold winter, according to a report by grid operator Svenska Kraftnät. However, some imports will be required if the winter is as cold as usually happen once in a decade. Thanks to more nuclear power production, the winter 2010/2011 was less challenging than the winter before.
© Esmerk

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.