News item | 2010-08-30 | 15:15 PM

Energy News Europe - week 34, 2010


SPÖ blocks Verbund's capital increase
Der Standard, 2010-08-23
The centre-left coalition party in Austria, the SPÖ, has blocked the energy firm Verbund's capital increase because the state, as the largest shareholder, would have to contribute EUR 510mn (USD 644.24mn). The centre-right coalition partner ÖVP is keen to carry out the capital increase, but the SPÖ claims that it would be unfair given that the railway company ÖBB is not getting any state finance.

Verbund wants to use the total of EUR 1bn which it would get from the capital increase to finance an expansion of its hydropower capacity and its grids. It wants to hold a meeting on the matter with all of its shareholders.
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GDF Suez sells EUR 5.2bn of activities
L'Echo, 2010-08-20
Since the start of 2008 the French energy company GDF Suez has sold EUR 7.7bn (USD 9.86bn) worth of activities, EUR 5.2bn of which was in Belgium. GDF Suez employs around 20,000 people in Belgium. Following European Commission instructions GDF Suez sold its 57.25% stake in Distrigaz to ENI for EUR 2.7bn and its 51% stake in SPE for EUR 515mn, which finally brought GDF Suez EUR 600mn.

Between 2008 and 2009 GDF Suez reduced its Fluxys stake in two phased for EUR 300mn, while in 2009 its sold over EUR 200mn shares in SPE and E.ON. Also in 2009 GSF Suez reduced is stakes in Belgium's part-public gas and electricity networks to 30% for EUR 500mn. In 2010 GDF Suez sold the entirety of its capital in Fluxys and Elia for EUR 636mn and EUR 310mn respectively.
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Major wind farm to be build in Spasovo
Dnevnik, 2010-08-23
SRS-Bulgaria EOOD, a German-Bulgarian company specialising in green technologies, will build a wind power plant with an installed output of 150 MW-180 MW in Spasovo. The wind farm will consist of 60 turbines.

The total value of the project will be BGN 483.70mn (EUR 247.33mn USD 314.10mn) with BGN 6.5mn invested in 2010, another BGN 292.6mn in 2011 and BGN 186mn in 2012. Installation of the turbines is scheduled to be completed in 2011.
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Budget cuts could jeopardise wind power investments
Børsen, 2010-08-26
Several analysts with insight into wind turbine industry fear that rising debt and budget cuts within the 27 EU member countries will jeopardise the planned investments in wind energy although the countries have committed to cut CO2 emissions by 20% by 2020. Stephen Rammer, stock market analyst with Formuepleje, fears that the measures to meet the 2020 targets could be delayed by the budget cuts.

He also points out that politically, the climate issue is not considered as important as the struggle against the financial crisis. However, Europe imports 80% of all the energy it consumes so major long-terms energy decisions are required. Danish wind power systems producer Vestas believes that there is still a strong political backing for massive investments in wind turbines despite national debts and budget cuts.
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Windfall tax not to be implemented during current government term
Aamulehti, 2010-08-24
In Finland, the so-called windfall tax planned to be levied on nuclear and hydropower companies will not realise during the current term of government. This results from the Ministry of Finance not coming up with a suitable model to implement it. According to State Secretary Velipekka Nummikoski, the tax cannot be implemented with the conditions suggested by the Cabinet Committee on Economic Policy 18 months ago.

In addition, the EU commission is examining whether the so-called Mankala principle is accordant with EU legislation. Finland's Minister of Economic Affairs Mauri Pekkarinen is of the opinion that it should be possible to interfere with unearned profits somehow. A good model would be tax on uranium. Nummikoski points out that tax on uranium has nothing to do with the unearned increment, however.
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Environment Ministry proposes power plant efficiency rates
Süddeutsche Zeitung, 2010-08-24
Within the scope of the talks about the German government's energy policy concept, the Environment Ministry proposes the introduction of a minimum efficiency rate of 32% for brown coal-fired power plants and a minimum efficiency rate of 34% for hard coal-fired power plants. According to the proposal, all coal-fired power plants that do not meet the minimum efficiency rates are to be ordered to be shut down.

In addition, the Environment Ministry would like to oblige energy suppliers to cut their sales by 1% annually with effect from 2011. Home owners are to be obliged to make renovations to improve energy efficiency. The above proposals may trigger a dispute between the Environment Ministry and the Economy Ministry. According to a spokesman for energy group Eon, the plans by the Environment Ministry are ill-conceived.

The spokesman pointed out that the expansion of electric mobility will result in increased demand for electricity. In addition, he pointed to widespread resistance of residents against new power plants.
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Consumers' concerns about smart metering
Süddeutsche Zeitung, 2010-08-25
A study by Accenture suggests that 90% of consumers reject electricity tariffs in which the price of electricity depends on general consumption levels. The consultancy company interviewed 9,000 people worldwide, 513 of them in Germany. Nearly half of those polled are concerned about data protection.

Other arguments against smart metering are that power suppliers may use such variable tariffs to disguise price increases and that such tariffs restrict the power consumer's freedom. No more than 10% of those polled believe that power suppliers provide neutral advice.
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Decision on Endesa power plant plan delayed
Irish Examiner, 2010-08-23
Endesa has been ordered to supply additional information regarding proposals for a 450MW project at Tarbert. An Bord Pleanala says that not enough consideration has been given by the Spanish energy group to the impact of the EUR 500mn (USD 634.99mn) gas-fired plant's phased construction element.

The board also said that it had not been proven that the work would impact the Shannon and River Fergus Estuaries Special Protection area, the Natura 2000 site. A ruling on the project is now unlikely before October 2010, with Endesa being given until 24 September to put forward the new information.
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Enel Green Power IPO will take place in October 2010
Il Giornale, 2010-08-24
Fulvio Conti, the CEO of Italian energy group Enel, confirmed that the subsidiary Enel Green Power will be listed on the stock market by October 2010. Conti also announced that the firm is planning to earn at least EUR 3bn (USD 3.79bn) from the IPO.
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Works for the first nuclear plant will start by 2014
Virgilio Notizie, 2010-08-25
The Italian Undersecretary of the Ministry for economic development Stefano Saglia has announced that works for the first Italian nuclear power station will start by 2014. The country should have two active nuclear stations by 2020.
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Statoil evaluates future of renewable energy, 2010-08-23
Norwegian oil giant Statoil will in three-four years from now have to evaluate the profitability of its investments in renewable energy, says CEO Helge Lund. The conclusion may be that Statoil goes back to being an oil and gas company only. So far its investments in for example wind power have been unprofitable, and the main focus in the next few years is cost reductions.
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Water levels in Mid-Norway low
Nationen, 2010-08-24
Water levels in hydro power dams in the counties of Trøndelag and Møre og Romsdal, Mid-Norway, are lower than at the same time in any year since 2000. If there is not much rainfall this autumn, electricity prices in the region may reach record high levels coming winter.

To guarantee electricity supplies, the mobile gas power plants at Aukra and Tjeldbergodden are likely to be put on standby, according to Svein Rødal, who is in charge of the emergency service for power supplies in Mid-Norway.
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French investors recommended as best owners of Enea
Gazeta Prawna, 2010-08-23
Unofficial sources say that privatisation advisors have recommended two French companies, GDF Suez and EdF, as best potential owners of the Polish state-owned energy firm Enea.

The information has not been confirmed by Enea or the Polish government. In total six preliminary offers have been submitted in the tender. State treasury promises to analyse them by 24 August 2010.
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Wind power output increases in first half of 2010
Diario Economico, 2010-08-24
The Portuguese General Directorate of Energy has reported that the output of wind power has risen by 49% in the first half of 2010 compared to the equivalent period of 2009 having reached an installed capacity of 3,802MW. The production of power from renewable sources has increased in turn by 90% year on year.

At the end of June 2010 some 66% of the energy consumed in Portugal was generated from renewable sources. Out of this 66% ratio, 40% was produced by hydro power stations and 20% by wind farms. The remaining is generated by biomass, photovoltaic and bio gas stations.
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United Kingdom

HSE says that nuclear reactor programme is behind schedule
Guardian, 2010-08-25
The Health and Safety Executive (HSE) has admitted that the UK's nuclear reactor building programme has fallen behind already. The HSE says that it expects that large amounts of work will remain unfinished by next June's deadline for the its assessment of the reactor design programme.

It said that it is likely that an 'interim' decision will be required, and said that companies could continue to plan and carry out preparatory work on nuclear sites while they waited for final approval on reactors. However, construction of the reactors may not proceed without HSE permission.

The HSE says that the firms involved in the designs, Areva, EDF and Westinghouse had repeatedly submitted incomplete and late information, though the firms blame the HSE for not having sufficient resources to carry out work.
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