News item | 2010-10-19 | 15:46 PM

Energy News Europe - week 41, 2010

Austria

Electricity price to increase by 15-25% by 2020
Die Presse, 2010-10-09
According to a study by consultancy A.T. Kearney, the total electricity price for household customers in Austria is expected to increase by 15-25% by 2020, excluding any rise in tax. The estimated price rise is due to the expansion of green electricity and the technology investments related to it.
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Czech Republic

IEA recommends higher energy efficiency
Financni Noviny, 2010-10-07
The International Energy Agency (IEA) has published a review of the Czech Republic's energy policy in which it recommends to increase its energy efficiency. IEA Director Nobuo Tanaka has pointed out that emissions continue growing in construction and transport and the Czech Republic's energy intensity twice as high as the IEA average. He has added that the country still had the second highest CO2 emissions per person in the OECD. Tanaka admitted that the Czech Republic will fulfil its commitments from the Kyoto Treaty but a long-term emission reduction will be more difficult.

IEA recommends use of more environment-friendly technologies for coal processing as well as reform of the system of research, development and innovations. Construction of new gas pipelines and connections with Germany and Poland was recommended too. The Czech Republic was praised for liberalisation of the market and improving its energy security which shielded it from gas supply disruptions in January 2009. Czech Industry and Trade Minister Martin Kocourek has remarked that the Czech Republic has managed to reduce its energy intensity by 2.5% per year between 1990 and 2008 while other OECD countries managed only 1.5%.
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Denmark

Eon plans further investments in Denmark
Børsen, 2010-10-13
German energy giant Eon, that yesterday inaugurated its Rødsand 2 offshore wind farm in Denmark, is planning to make further wind farm investments in Denmark. The company's manager for Danish operations Tore Harritshøj says Eon has highly ambitious goals for green energy investments in Denmark.

The company has earmarked a total of DKK 48bn (EUR 6.44bn USD 8.96bn) to projects in the Nordic region over the 2006-2013 period. Eon surprisingly chose not to bid for the Anholt offshore wind farm due to tight restrictions in the bidding process. The contract was won by Dong Energy that was also the only bidder for the project. To increase competition in Denmark, the Danish government has initiated measures to change the bidding regulations to attract more bidders to Denmark.
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Finland

Fortum to outsource network services to Eltel and Empower
Press Release, 2010-10-08
Finnish power company Fortum has signed a preliminary agreement with electricity network services supplier Eltel Networks and Empower, a company providing solutions for energy data management, production, and transmission as well as delivery of energy and data, for installation, maintenance and design services. Under the agreement, a total of 120 employees in Finland will transfer from Fortum to Eltel and Empower. In its electricity transmission business, Fortum will focus more strongly in future on its core know-how, that is the building, design, and use of the network.
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France

Government may raise electricity bills to support renewable energy
Les Echos, 2010-10-12
Currently, around 5% of French households' electricity bill is used to support the growth of the renewable energy sector, via a tax of EUR 4.50 (USD 6.24) per megawatt-hour (MWh). This rate has been unchanged since 2004. However, the sector's growth is such that in order to cover the cost, in 2010 the tax would need to be raised to EUR 6.50 (USD 9.01) per MWh.

According to government figures, if development is in line with the country's environmental charter the annual cost to the state will exceed EUR 1.50bn (USD 2.08bn) by 2020. EDF supports the extra buyback cost of renewable energy, and extrapolates that the deficit could exceed EUR 15bn (USD 20.80bn) after 2015. The tax may be raised as part of the Finance Bill being discussed at the national Assembly, and a decision is expected shortly. Any increase in electricity bills will not be well received, after a 3.5% increase in summer 2010.
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GDF Suez Chairman interviewed on post-merger strategy
La Tribune, 2010-10-14
GDF Suez Chairman Gérard Mestrallet has signed off the group's merger with International Power (IP), which will double its combined generation capacity to 100,000 MW by 2011, two years ahead of schedule. The group will double its US and Middle East activities. It will triple its presence in Asia-Pacific.

Thanks to the merger, the group will enter the Australian market with a pioneering, floating gas liquefying plant. Mestrallet says that Australia will be a major source of gas in the 21st century, and is also in a region where energy usage is growing fastest. Mestrallet stresses that the group's withdrawal from a project for an EPR reactor in Penly, France, does not signify a departure from the nuclear segment. It is still a candidate for a project in the Rhône valley. GDF Suez will invest EUR 11bn (USD 15.38bn) per year in nuclear power, and wants to maintain 15% nuclear power within its electricity generation.

Such projects are more or less profitable depending on local regulation. Mestrallet says that Brazil could be of interest if wave power regulations are applied to nuclear power.
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Germany

Government likely to fail to uphold coal compromise
Süddeutsche Zeitung, 2010-10-12
According to coalition circles, the German government meanwhile believes that the chances to maintain the state subsidies for hard coal mining in Germany until 2018 against the resistance of the EU are rather low.

The European Commission (EC) decided in July 2010 that the member states are allowed to continue to subsidise their national hard coal mining companies only until the end of 2014. This clashes with the German coal compromise found in 2007 according to which the subsidies are to be gradually reduced until 2018. The German Chancellor Angela Merkel now intends to personally speak up for a modification of the EC plans, which will make a final decision still in 2010. Merkel would therefore have to convince her colleagues from the other 26 member states during the EU summit mid-December 2010 at the latest. However, it is unlikely that Merkel will be able to persuade all 26 heads of state.
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Renewable energy industry growing fast
Handelsblatt, 2010-10-13
According to a study drawn up by German [economic research institute] DIW for the German Environment Ministry, the number of employees in the renewable energy industry rose by 60,000 to 340,000 between 2007 and 2009. The industry thus employs more people than estimated to date. Turnover of the renewable energy industry climbed by 40% to around EUR 21bn (USD 29.24bn) over the past three years. The renewable energy industry is thus growing at a clearly above average rate.
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Poland

Government accepts draft of energy effectiveness bill
Gazeta Prawna, 2010-10-12
The Polish government has accepted the draft energy effectiveness bill put forward by the Ministry of Economy. The bill will obligate the electricity and gas suppliers to obtain so-called "white certificates", confirming their energy effectiveness. This is part of the government incentive to encourage the development of environmentally-friendly technological solutions in the energy industry. The grounds for granting the white certificate will be successfully developing energy-saving projects by both companies and public institutions.
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Spain

Iberdrola and ACS settle shareholding dispute in Court
El Mundo, 2010-10-08
The dispute between the Spanish energy firm Iberdrola and the construction firm ACS over ACS's right to sit a representative at Iberdrola's board, will be settled by the Court of Justice of Bilbao on 18 January 2011. The companies were not able to reach an agreement over the level of interference that ACS would infer if sitting at Iberdrola's board, as a shareholder and as competitor too. ACS believes that there is only competition clash on punctual issues such as industrial engineering and renewable energies but they are both structurally two different businesses.

Iberdrola however thinks there is a basic conflict of interest between both groups. ACS is also committed in upping its stake of Iberdrola to 20%.
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Sweden

30% of new wind turbines fail inspection
ERA, 2010-10-08
According to a recent Elforsk study, approximately 30% of new wind turbines fail inspection. The problems range widely, many of which are minor, although big in number. The average inspection showed 27 points for notice, with the best having only six errors, and the worst containing 58 areas that did not meet approval. In total, 52 of 174 new wind turbines failed inspection requirements. Rikard Holmberg of Energo Retea attributes the high number of errors to the market being relatively young. He expects that through experience, these numbers should eventually fall.
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United Kingdom

Natural gas will play key role in meeting future energy challenges
Financial Times, 2010-10-12
According to Royal Dutch Shell's chief executive, Peter Voser, natural gas will play a key part in helping the UK to cope with the energy challenges that it is going to face over short to medium-term. He believes that it has great potential for delivering a low-cost pathway to clean and secure electricity.

Voser argues that natural gas is important for the UK's future for three reasons, which are that new natural gas power plants are easier to build and less expensive than other sources of electricity, that supplies are now more abundantly available than they have been in the past and that it would provide substantial and immediate environmental benefits.
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Ofgem to allow electricity customers to claim for poor service
Telegraph (UK), 2010-10-12
The UK energy regulator Ofgem has announced that corporate and domestic electricity customers can claim a daily rate of compensation from electricity suppliers if they do not carry out repairs and connections within an agreed time.

The electricity firms may be asked to pay GBP 10 per day for failing to provide home connection quotations on time, up to GBP 200 per day for failing to carry out work for industrial customers. The new regime will allow electricity customers to bill their network operators for the first time. Ofgem said it has been introduced in response to unsatisfactory customer service. The House Builders Federation welcomed the new regime.
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