AES, Asia, Centrica, EDF, Endesa, Enel, Europe, General Electric, RWE, Siemens, Tognum

Companies

Issue 1 and Volume 15.

Eon plans mammoth boost in generation investment

Germany’s Eon will invest a total €25.3bn ($33bn) over the next three years, with the vast majority going on its power generation and network assets.

Of the total fixed asset expenditure of €22.4bn some €11.4bn will be used to modernize existing and construct new power plants.

In Germany, construction has begun on new generating units in Datteln and Irschin and also plans to build a new 1100 MW hard coal-fired generating unit at Staudinger power station. Germany is also set for a hard coal fired test unit with a thermal efficiency of more than 50 per cent.

In addition, construction continues on an 800 MW combined-cycle gas turbine in Italy, a 1100 MW coal fired power plant in the Netherlands, and several coal fired and gas fired power plants in Eastern Europe. Elsewhere in Europe a 1200 MW gas fired plant and a 1600 MW coal fired plant are planned for the United Kingdom while in northern Europe, Eon intends to boost the performance of existing power plants and build a new gas fired combined heat-and-power plant.

The focus of power generation investments in the USA is the completion of Trimble County 2 coal fired generating unit. Eon will also develop a number of offshore wind projects in the UK, Germany, and Northern Europe.

Hydro and Statoil form oil and gas merger

Two of Scandinavia’s largest oil operators have merged their oil and gas activities to create what is the largest offshore operator in the world.

With the boards of both companies recommending the merger, the new company will have a combined production of 1.9m barrels per day in 2007 and proven oil and gas reserves of 6.3bn barrels of oil equivalents.

Under the terms of the alliance Norsk Hydro’s shareholders will hold 32.7 per cent of the new company with Statoil’s shareholders holding the remaining 67.3 per cent with the Norwegian State holding approximately 62.5 per cent in the merged group.

Investment in renewable energy technology reaches record highs

Renewable energy technologies saw more than $70bn in new investment over 2006, up 43 per cent on 2005.

According to research firm New Energy Finance, there are more than 1200 private equity funds targeting environmental projects, which in turn are prompting renewable technology companies to list.

New Energy Finance reports that 2006 saw clean energy and carbon-related companies raise a total of $1.6bn in 37 separate transactions on London’s Alternative Investment Market (AIM).

There are now 50 such stocks quoted on the exchange with a total market capitalization of $7.8bn.

GdF sets timescale for Suez merger

Gaz de France (GdF) will hold an extraordinary meeting on June 25 this year for shareholders to vote on its planned $102bn merger with Suez to create Europe’s second-biggest utility.

The decision taken by GDF’s board means that almost the first decision taken by any new government appointed after France’s presidential election in April and May will be on the controversial privatisation of GdF. The planned merger with Suez, the world’s No. 2 water company, has provoked opposition from Suez investors and from Ségolène Royal, the socialist party presidential candidate, who reiterated her preference for a merger with electricity group EDF.

France ruled in November to delay completion of the merger until at least July, after the country’s presidential election result is known.

M&A activity set to pick up in 2007 ahead of liberalization

European utilities will continue consolidating in 2007 in the run-up to full market liberalisation, says independent researchers Datamonitor.

In a recent report it says that the new year has already begun with renewed speculation over the future ownership of a number of major utilities across Europe and further domestic and cross-border consolidation is anticipated this year.

Eon’s purchase of Endesa may be brought to a close, but new targets such as Suez are expected to be of as much interest to market observers, with the French state-orchestrated merger with GdF pushed back due to the forthcoming presidential elections.

Datamonitor also noted that Spanish utilities are likely to be active throughout the coming year, with Gas Natural, mentioned in connection with a number of other domestic utilities. Meanwhile, the UK’s smallest independent utility, Scottish and Southern Energy, also remains a candidate for larger predators.


News digest

Electricity drives AES: The Electric Drive Transportation Association is being joined by AES. The body represents battery, hybrid and fuel cell transportation technologies.

Poweo power pact: IPP Poweo has struck a power exchange deal with Electricte de France (EDF), granting the company access to 160 MW of power from nuclear capacity for 15 years. As part of the deal, EDF will have access to some of Poweo’s Pont-sur-Sambre gas-fired station’s output.

Dutch courage from Centrica: A €1.5bn ($1.9bn) bid for assets expected to be auction by Nuon and Essen as part of their imminent merger is being lined up by Centrica. The UK company is hoping to expand its presence in the Netherlands.

Ride on MAN: Swedish truck and genset manufacturers Scania may have escaped the clutches of a hostile takeover bid from MAN, which has hinted that it may not prolong the offer that is set to expire soon.

GE dries out: A definitive agreement for the sale of its hydroelectric business has been signed by GE. Pescarmona Group of Companies is set to take on all of GE’s worldwide hydroelectric business, except for its operations in Scandinavia.

Climate’s Italian stallion: Enel has announced a €4bn ($5.2bn) investment campaign that includes €3.3bn on renewables that will expand capacity by 1 700 MW over five years. A further €270m will go on energy efficiency and distributed generation.

3i makes big lift: Venture capital company 3i has agreed a buyout deal for Dockwise Transport, a Dutch heavy lift transport company that specialises in the marine and oil and gas industries. The deal is reported to be worth in the region of some $700m.

Tognum fuels up: RWE has sold its 18.1 per cent stake in MTU CFC Solutions, a fuel cell joint venture, back to majority owners Tognum. The move aims to allow Tognum the capability to expand its operations in the stationary fuel cell market.

Pulp friction: Metso has completed the acquisition of Aker Kvaerners pulping and power business after receiving approval from the European Commission. The deal was reported to come in at approximately €335m ($434m).

Korean current fun: Voith Siemens Hydro has announced the formation of a new joint venture in South Korea that is to develop and test large tidal power plants. Partners include Korea Hydro and Nuclear Power Co, Posco and the provincial government. Final implementation of the project will see 600 MW installed.