News item | 2010-10-12 | 16:15 PM

Energy News Europe - week 40, 2010

Austria

EnBW to significantly reduce stake in EVN
Stuttgarter Zeitung, 2010-10-06
German energy supplier EnBW intends to part with up to 40.8mn shares in Austrian electricity company EVN. According to a spokesman, EnBW holds at present a stake of just under 36% in EVN and would reduce its stake in EVN to about 10% with the sale of the shares.

EnBW is selling the shares due to the announced capital increase of EVN, which offers about 17mn of its shares for between EUR 10.50 (USD 14.55) and EUR 13.5.
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Bulgaria

PM asks for Belene NPP costs to be limited to EUR 7bn
Novinite, 2010-09-30
It has been reported that Bulgarian prime minister Boyko Borisov has asked Russian firm Atomstroyexport to limit the cost of the Belene Nuclear Power Plant, which it is contracted to build, to EUR 7bn (USD 9.64bn). An agreement on the project between the Bulgarian government and the Russian firm expired on 30 September 2010.

The project is still seeking a strategic investor and has been in limbo since autumn 2009 when its previous strategic investor, Germany's RWE, pulled out.
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Denmark

Dong changes wind farm strategy
Børsen, 2010-10-04
Danish company Dong Energy is to adopt the same strategy for wind farms as for oil and gas fields, in other words finding partners for its investments. Director of Investor Relations Morten Hultberg Buchgreitz says the company is considering selling off stakes in all its wind farm holdings to generate capital.

The first step has been taken as Stadtwerke Lübeck has acquired a 7.25% stake in Nysted wind farm south of Lolland. In all, Dong is the owner of 25 wind farms, most of them offshore.
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PM reiterates Climate Commission's recommendations
Jyllands-Posten, 2010-10-05
In his inaugural speech to parliament on Tuesday, October 5 Danish PM Lars Løkke Rasmussen announced that Denmark will be independent of oil, gas and coal by 2050 and that more electric cars, wind power and biomass will be used.

The Danish Commission on Climate Change Policy's (Klimakommissionen) Chairman, Professor Kathrine Richardson says she is very happy about the announcement, which reflects the major recommendations put forward in the Commission's report last week.
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Finland

Investors very interested in Olkiluoto 4 nuclear power plant
Kauppalehti, 2010-10-08
According to Finnish energy company Pohjolan Voima's (PVO) CEO Lauri Virkkunen, investors are interested in the Olkiluoto 4 nuclear power plant that is being planned in Finland.

So many investors would like to become shareholders that the energy to be generated in the nuclear power plant would not be sufficient for all the interested parties. According to Virkkunen, there is no reason to divide the capacity before progress has been made in compiling all the reports concerning the nuclear power plant.

The shareholders of Olkiluoto 3 will form the basis of the shareholding of Olkiluoto 4. At the moment, preliminary clarifications are being carried out on the type of facility and the manufacturer of the power plant. According to Virkkunen, all alternatives and manufacturers are still being examined.
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Germany

Up to 3,500 km of additional high-voltage power lines needed
Financial Times Deutschland, 2010-10-06
According to Dena, the German energy agency, up to 3,500 km of additional high-voltage power lines will be required in Germany over the next 10 to 15 years to absorb additional wind power capacity. The expansion of the high-voltage grid will be necessary to achieve the government's renewable power target of 35% by 2020.

At present, renewable power has a share of 16% in Germany. Dena estimates the cost for the expansion of the high-voltage grid at EUR 6bn (USD 8.31bn). If high-temperature cables were used instead of conventional high-voltage power lines, the grid would have to be expanded by 1,600 km and up to 7,000 km of existing high-voltage power lines would have to be converted to the new technology for a total cost of EUR 13bn.
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RWE said to consider sale of extra-high-voltage power grids
Financial Times Deutschland, 2010-10-06
According to information obtained by the German daily FTD, German energy group RWE now considers a sale of the majority in its extra-high-voltage power grids in contrast to earlier plans. The sale of an up to 75% stake in the Dortmund-based grid subsidiary Amprion was allegedly being discussed in the RWE supervisory board. Amprion's grid has a length of about 11,000km.

The company is thus the largest grid operator in Germany. A spokesman of RWE would not comment on the matter. RWE's German competitors Eon and Vattenfall already sold their German extra-high-voltage power grids. However, RWE is allegedly not considering the sale of the grid to strategic investors. According to corporate circles, the sale of blocks of shares to financial investors such as pension funds is rather being discussed.
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Norway

Government warns of new delays for CCS project at Mongstad
Dagens Næringsliv, 2010-10-06
In the national budget proposal for 2011, the Norwegian government indicates that the large carbon capture and cleaning (CCS) project on Mongstad may be delayed further and become more expensive than stated until now. In the revised national budget in spring 2010, the government already postponed the opening of the plant until 2018 at the earliest and the price tag was NOK 25bn (EUR 3.11bn USD 4.30bn).

An opening for new delays and cost excesses is brought on by new information from operator Statoil that warns that the amines that it plans to use in the CCS may lead to the emission of carcinogenic substance nitramine. New evaluations are therefore needed, possibly with a switch to another technology, before a final investment decision is made.
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Statkraft to focus investments on wind and hydro power
ERA, 2010-10-08
Norwegian state-owned electricity company Statkraft, has announced that it plans re-shuffle its investment strategy and focus on the development of wind, hydro and flexible power production. In doing so, it will reduce its investments in other active fields.

The company is also considering selling off district heating facilities in Norway, while those in Sweden are expected to be consolidated. In other words, expansion plans will be toned down.
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Poland

New owner of Enea to be known in mid-October 2010
Rzeczpospolita, 2010-10-02
New owner of the Polish state-owned energy company Enea is to be chosen by mid-October 2010, according to unofficial information obtained by the Polish daily Rzeczpospolita. Deadline to submit offers for Enea expires on 5 October 2010.

Three companies which are certain to make their offers are: EDF, GDF Suez and Kulczyk Investments. All of them need Enea to be able to develop on the Polish market. Also, Rzeczpospolita reports that the price for Enea's 51% stake is likely to exceed the estimated PLN 4.70bn (EUR 1.19bn USD 1.64bn) and might reach up to PLN 5.6bn.
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Russia

RusHydro to raise capacity of foreign assets to 5 GW by 2020
Vedomosti, 2010-09-30
By 2020, the Russian company RusHydro intends to raise installed capacity of foreign assets to 5 GW. According to previously reported plans, the company planned to have foreign assets of at least 1 GW of installed capacity.
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Spain

EDP to pursue investment policy
Diario de Noticias, 2010-10-02
The Portuguese energy group EDP, should invest some EUR 600mn (USD 826.45mn) in the Spanish market over the next two to three years in a bid to reinforce presence in the renewable energy sector and expansion of electricity and gas networks.

EDP is the third largest producer within the Spanish renewable energy sector, the fourth largest electricity producer and the second largest distributor of natural gas. Within this sector, EDP purchased from Gas Natural, the gas distribution networks of Cantabria and Murcia regions with a low pressure pipeline extension of 2,394km and 248,000 supply points. T

his operation cost EDP some EUR 330mn and at the same time it has managed to attract 1.4mn customers and increased market share from 10% to 14%. Currently more than half of the net revenues of EDP are generated outside Portugal and Spain is the main foreign market. Currently more than 20% of EDP's ebitda is generated in Spain.
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Sweden

E.on terminates streamline project in Umeälv
Västerbottens Kuriren, 2010-10-07
Power company E.on has terminated its planned streamlining project of hydro power plants in river Umeälv, Sweden. This is a consequence of the change in the electricity certificate system, which makes the project unprofitable. The investment was valued at more than SEK 1bn (EUR 107.05mn USD 148.96mn) and was forecast to create approximately 300 jobs in five years.
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United Kingdom

Offshore wind industry faces number of challenges
Guardian, 2010-10-05
According to figures from Renewable UK, the UK's offshore wind industry is generating just 1.3GW per year, equivalent to just one coal-fired power station, despite the UK having the largest installed offshore wind capacity in the world.

One of the main problems limiting the UK's ability to exploit its rich wind energy resources is its reliance on overseas technology and manufacturing, meaning the offshore wind industry is subject to financial risks linked to fluctuating foreign exchange rates.

Another big problem for the offshore sector is the Government's policy framework for investment in wind energy, particularly regarding the Feed-in Tariffs for wind investors, which are causing a great deal of confusion. The Government's public spending cuts have also cast further doubts over Carbon Trust funding for offshore wind.
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GDF to finalise terms of reverse takeover of International Power
The Times, 2010-10-07
The French energy company GDF Suez will soon finalise the terms of a planned reverse takeover of the UK-based electricity generator International Power. The deal could result in shareholders in the UK group receiving a GBP 1.40bn (EUR 1.60bn USD 2.22bn) cash payout.

Within the next few days the two companies are expected to post a Memorandum of Understanding, which will clear the way for their assets to be merged. Under the deal GDF Suez will inject its international assets into the UK company and will be given up to a 70% stake in the firm in return.

Shareholders in International Power would still control the remaining 30% of the business. The agreement would result in the creation of the largest merchant power generator globally, with an electric capacity of more than 66.1 gigawatts.
© Esmerk