News item | 2011-12-06 | 11:30 AM

Energy News Europe - week 48, 2011

Belgium

Electrabel to review its nuclear investment strategy
L'Echo, 2011-11-28
Electrabel, the Belgian energy subsidiary of the French energy company GDF Suez, has announced that it is in agreement with its parent company and believes that Belgium has broken its commitments by fixing the nuclear tax at EUR 550mn (USD 732.02mn) and not prolonging the lifespan of the Doel 1 and 2 and the Tihange 1 nuclear reactors. The company plans to review its nuclear strategy in Belgium in the first half of 2012, at which point Electrabel will know which investments require stress tests and whether the three reactors will be closed in 2015.
© Esmerk

Bulgaria

E.ON Bulgaria sold to Energo Pro
Novinite, 2011-12-03
Czech hydro power production firm Energo Pro has acquired electric power utility E.ON Bulgaria for EUR 133mn (USD 178.46mn) from its German owner. E.ON Bulgaria serves the north eastern and central northern regions and has a power network of 42,000km. According to local press reports, E.ON is withdrawing from some of its European activities to focus on emerging markets such as Latin America and Russia, although the issue of Bulgarian government interference has also been mentioned.

Czech Republic

CEZ wants state involvement in Temelin's extension
Euro, 2011-11-30
Czech energy group CEZ has entered into talks with the government. The firm wants the state, which controls a majority in the firm, to be involved in the construction of two new units at the nuclear power station Temelin. CEZ points out that the project is risky and that such ventures abroad are usually carried out under collaboration. The government plans to set up a committee, which will look into the issue.
© Esmerk

Estonia

1,000 MW offshore wind energy capacities under development
Tööstusuudised, 2011-12-02
Estonian Wind Power Association (EWPA) says in comments to EWEA Offshore 2011 conference that over 141 GW of offshore wind energy capacities is built, under construction or planned in Europe, surpassing 35 times than the just under 4GW installed today. Estonia has over 1,000 MW of offshore wind energy capacities under development.

According to EWPA, Estonian companies have taken an active stance in supplying supportive services to offshore wind energy developers. BLRT Marketex has announced of having been commissioned for the building of four 19.5-metre catamarans for a developer of offshore wind farms. The wind energy cluster at EWPA is involved in assessing Estonian ports' prospects in contributing to the offshore wind energy development.
© Esmerk

Germany

Hamburg buys stakes in power distribution networks
Financial Times Deutschland, 2011-11-30
The municipality of Hamburg bought a 25.1% stake in the regional electricity and district heating network from Vattenfall for EUR 463mn (USD 616.83mn). Hamburg also bought a 25.1% stake in Eon Hanse's gas network in northern Germany for EUR 80mn. After many years, Hamburg is again a co-owner of the power suppliers of its inhabitants. The Hamburg government said it will finance the deal with the dividends of the operations.
© Esmerk

RWE benefits from cheaper emission rights, plans job cuts
Financial Times Deutschland, 2011-12-05
German energy group RWE benefits from the cheaper emission rights. The margins regarding the generation of electricity from lignite increased significantly due to the cheaper emission rights. The prices for emission rights dropped from about EUR 17 (USD 22.81) to about EUR 7 since summer 2011.

RWE is the largest producer of electricity from lignite in Germany with 65bn kWh annually. RWE's A rating is in danger due to the costs for the nuclear phaseout and losses with regard to gas trading. RWE already reduced its profit forecast downwards. Despite the now better profit outlook, RWE promotes its ongoing restructuring in the area of lignite. The company's supervisory board will deal with the matter on 12 December 2011. Company circles confirmed that the number of employees is expected to decrease by 8,000 to 64,000 within the course of the next months. A spokesman confirmed that there will be job cuts due to the known reasons. He would not comment on the extent of the job cuts.

According to information obtained by the German daily FTD, the sale of participations will account for about half of the job cuts. A part of the planned sale of participations has already been realised such as the sale of Amprion's high voltage grid and the gas grid operator Thyssengas. RWE is still looking for buyers for other subsidiaries such as parts of the oil subsidiary Dea. The restructuring of the Npower subsidiary in the UK is expected to lead to the cut of 2,000 jobs. 1,000 jobs are in danger at the German nuclear and lignite power plants. RWE does not plan operational dismissals.
© Esmerk

Netherlands

Country sees offshore wind farms as too expensive
De Volkskrant, 2011-11-29
According to a study by Bloomberg and Rabobank, offshore wind farms in Germany, Belgium, France, the UK and Denmark play an important part in creating a sustainable power supply, however, the Netherlands sees the offshore wind farms as too expensive. Some EUR 130bn (USD 173.09bn) is expected to be invested in offshore wind farms in the coming ten years, which is the equivalent of 46 gigawatts of power or 20 large coal-fired power plants.

Offshore wind farms are also expected to become some 30% cheaper in the coming years due to increased experience in the industry and larger wind turbines. Until the price of wind energy is decreased, subsidies continue to be necessary. Rabobank sees wind energy as an important sector to invest in, though not in the Netherlands due to the lack of subsidies. Dutch companies threaten to lose their strong position in the installation of wind turbines to German and UK competitors.
© Esmerk

Council of States rejects coal-fired plant objections
Het Financieele Dagblad, 2011-12-01
The Dutch Council of States has rejected the objections against the issue of environmental permits for three new coal-fired power stations in the Netherlands. This refers to the construction of power stations in Eemshaven and on the Maasvlakte in the Netherlands, construction of which will cost some EUR 5bn (USD 6.72bn). The Council of States says that regional governments do not need to take into account the national emission platform, which matches a previous decision from the European Court of Justice. The council also considers existing regulations on the emission of air pollutants as strict enough.
© Esmerk

Norway

Statnett plan grid investments of up to NOK 50bn
Teknisk Ukeblad, 2011-11-30
Norwegian grid company Statnett plans to invest between NOK 40bn (EUR 5.13bn USD 6.84bn) and NOK 50bn in the period up to 2021. The investments are intended to secure the supply of electricity. Bergen and Northern Norway are pointed out as areas in need of improvements. Improved grid capacity is also to result in an equalization of prices in different parts of Norway. The investments will furthermore pave the way for investments in wind power and small-scale power production and an electrification of petroleum installations.
© Esmerk

Poland

Rosatom of Russia wants to supply nuclear power technology
Wirtualny Nowy Przemysl, 2011-12-01
It has been revealed that Rosatom of Russia is planning to make an offer to build a nuclear power plant in Poland. Reportedly, technology that Rosatom can offer is safer than the one offered by its competitors and responds to all EU requirements. Tender for the supply of technology for the nuclear power plant to be built in Poland is expected to be called by the Polish energy group PGE in December 2011.
© Esmerk

Russia

Fortum may build power units for Chelyabinsk HPP
Kommersant - Ural, 2011-12-01
The Press Service of Mikhail Yurevich, the Chelyabinsk region governor, with reference to Alexander Chuvaev, the general director at Fortum, a division of Finland's Fortum Group, has reported that construction of two new power unit at the Chelyabinsk HPP will begin in summer 2012. The company had previously planned to build two units of 220 MW at the Tyumen CHP-1. According to a source familiar with the situation, the transfer of power units is to be coordinated with the regional government, the Russian Energy Ministry and shareholders of Fortum.
© Esmerk

Spain

Solar thermal installed power could reach 2,525 MW in 2013
ABC, 2011-11-30
Spanish authorities have announced that the country has 23 operative solar thermal power plants, 25 under construction and 12 under examination. Should all these be operative by 2013, the installed power should reach 2,525 MW. The region that reported the highest investments in the sector was Andalucia, standing at over EUR 1.90bn (USD 2.55bn), and the city of Sevilla accounted for eight out of the 13 facilities in the area.

Unesa's request to launch a three-year moratorium on solar energy, in the belief that it is too expensive and that the sector is not yet fully developed, was rejected, as politicians underlined how investments have to be recovered, and technology has improved considerably in the last years. According to Valeriano Ruiz, although the state paid EUR 185mn premiums for solar thermal energy in 2010, the sector contributed EUR 1.65bn to the GDP, and allowed EUR 550mn savings in terms of oil purchase.
© Esmerk

United Kingdom

Government confirms support package for heavy energy users
Financial Times, 2011-11-30
The UK Chancellor George Osborne has confirmed a GBP 250mn (EUR 292.64mn USD 389.88mn) support package for energy intensive industries, such as steel and aluminium. He believes this will help to keep industry and jobs in the UK. The package will include tax relief to offset the higher costs that energy intensive companies will face as a consequence of the carbon price floor, as well as compensation for the impact of the European Union's emissions trading system.

However, Osborne is facing criticism from environmental groups, who argue that the plans raise questions over the Government's supposed desire to be a leader in the fight against climate change. Separately, the Government has announced that it is going to boost the rate of tax relief that businesses can get from the UK climate change levy from 65% to 90%. This change will take effect from April 2013. © Esmerk

Nuclear plans fall further behind schedule amid safety issues
Telegraph (UK), 2011-12-02
The UK's nuclear renaissance has suffered a further setback after the timetable for the first plant to be built slipped by another year to 2019. Ministers had hoped the first new-build would be ready by 2017 but later revised the date to 2018. It is understood new safety checks following Japan's nuclear disaster are behind the latest setback. The government wants eight to ten nuclear power stations to meet climate change goals and offset a loss of generating capacity when coal-fired plants start to retire from 2015.

EDF Energy, the energy company building the first plant, said its 2019 date was only "indicative," suggesting further delays remain a possibility. Household utility bills are expected to rise sharply whatever energy policy the government follows. The Renewable Energy Foundation has said renewable energy alone will add some GBP 170 (EUR 200 USD 250) a year to household bills.
© Esmerk

Renewable energy suffers as energy suppliers turn to gas
Guardian, 2011-12-04
Renewable energy investment in 2011 has recovered thanks largely to USD 6bn (EUR 4.5bn) in offshore wind investment, although this year's total remains well down from USD 11bn in 2009, consultancy Roland Berger has said. Renewable energy projects have suffered as energy suppliers turn their attention to gas projects.

Roland Berger said the move could see the UK miss its climate change targets and leave households with higher utility bills in the future. So far in 2011, some 540MW of land and offshore wind turbines have been installed, compared with 1,192MW of wind capacity in 2010. The number of turbines submitted for planning permission is currently 2,058MW, largely unchanged from 2,080MW last year. Meanwhile, some 30GW of gas-fire power stations are under consideration. Roland Berger said solar and biomass projects have also seen a slowdown in 2011.
© 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.

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