EU rules may slow investment in nuclear and wind in UK
European antitrust rules may delay legislation on UK electricity market reform and put back investment in nuclear and wind power, a former government adviser has told Bloomberg.
UK energy minister Chris Huhne has recommended guaranteeing long-term prices for low-carbon energy such as nuclear and wind power, setting a minimum price for CO2 emissions and providing payments for back-up power stations.
But the proposed changes may fall foul of European Union rules restricting state aid, said Tom Burke, a co-founder of environmental lobby E3G. The European Union can take up to 18 months to grant consent under state aid rules, he told Bloomberg.
Britain’s power market overhaul would establish contracts-for-difference (CfDs) to spur investment into nuclear and renewables to help meet a European target of 15 per cent of energy coming from green sources along with a 80 per cent cut in CO2 emissions from 1990 levels by 2050.
The government is scheduled to pass its electricity market reform legislation in May 2012.
Poland explores its shale gas resources
A host of firms including ConocoPhillips, ExxonMobil and Chevron have joined the Polish rush for shale gas, reports the Financial Times.
British company 3Legs Resources also found “high gas saturations” in one of the country’s first shale test wells, said the paper. The US Energy Information Administration estimates that Poland’s could total 5300 billion m3, the largest in Europe.
“We are determined that the exploration and extraction of shale gas in Poland becomes a fact,” said prime minister Donald Tusk. Poland sees shale gas as a route to breaking reliance on imported gas from Russia, which totals 9 billion m3 per year.
Dong Energy sells stake in Norwegian wind firm to focus on offshore and UK
Dong Energy has sold its 50 per cent share of Norway’s Nordkraft Vind. The DKK145m ($27m) sale to Nordkraft Produksjon, which owns the other 50 per cent, will allow Dong to focus on offshore wind projects and the UK.
“We want to focus on the countries where we see the most potential for offshore wind,” said a Dong spokesperson.
Europe’s utilities no longer “safe havens”, says Bloomberg
Investors no longer see European utilities as safe havens because of governments seeking to curb budgets deficits by raising cash from power companies, says Bloomberg.
Italy has joined Germany and Finland in imposing levies on utilities, which traditionally hold up in a recession because of steady electricity demand and higher-than-average dividends.
Lueder Schumacher, an analyst at UniCredit, said: “Utilities are not defensive anymore. They were clearly exposed when this whole credit crisis kicked off, only banks did worse. This is because they are state proxies and you get states helping themselves to money via utilities.”
Peter Atherton, analyst for Citigroup, told Bloomberg that a €170m ($247m) tax on nuclear and hydro generation in Finland, as well as Germany’s levy on nuclear fuel rods, has drawn attention to the political risks.
Europe’s main utilities index has fallen 34 per cent compared with a 7.7 per cent drop in the STOXX Europe 600 index since 2008.
Netherlands plans 14 GW expansion
The Netherlands aims to add 14 GW capacity to its system by 2018 to raise its capacity by more than 50 per cent, said transmission system operator TenneT.
The company said 1.5 GW of capacity will enter operation this year and 7 GW between 2012 and 2014, after data from energy producers showed continuing growth in Dutch electricity’s export potential.
This trend has also prompted an expansion in TenneT’s transmission grid. The BritNed interconnection with the UK was commissioned this year and several more links are under consideration, said chief executive Mel Kroon.
Drax may switch to mainly biomass feedstock
The Drax group, owner of the UK’s 4 GW coal fired Drax power plant, has stated that it will become mainly biomass-fuelled, if subsidies make this commercially viable.
The lifespan of the Drax plant, which supplies about 7 per cent of the UK’s electricity, would be extended if it burned more biomass.
Drax generated 8 per cent of its electricity from biomass during the first half of 2011 – below its 12.5 per cent capacity as it waits for clarity on subsidies.
Germany: Metso has won its eighth order for a modularized CHP plant in Germany. The plant will produce 10 MW in heat and 5 MW in electricity from forest residue and wood material in Zwickau.
Germany: The country’s second-largest utility, RWE, will work with Deutsche Bank on a €2.5bn ($3.6bn) share sale to cut debt. Germany’s decision this June to close eight reactors has slashed earnings of the country’s large utilities.
Ireland: Xiantan Electric has invested €18m ($26m) in its first European wind turbine venture to develop farms totalling 13.6 MW with Gaelectric Holdings in Ireland.
Italy: Utilities sank in Milan trading after a government austerity package raised tax rates on utilities. Enel slipped by 4.3 per cent while power grid operator Terna plunged by a record 14 per cent and natural gas distributor Snam dropped by 9.9 per cent.
Hungary: A test run has started at the country’s first peaking power plant, which has two 58 MW blocks and was built by state-owned Hungarian Electricity Works (MVM) in a joint venture with Euroinvest.
Lithuania: Foreign minister Audronius Azubalis has called for public consultations over the construction of a nuclear plant in the neighbouring enclave of Kaliningrad, where the legislature has blocked a public referendum on building the 2300 MW plant.
UK: Purchases of thermal coal from the USA climbed by four times in the first quarter as demand for the dirtier-burning fuel advanced and exporters took advantage of the UK’s ability to scrub sulphur dioxide from emissions.
UK: Atlantis Resources, a Singapore based marine renewables developer, has announced that it has connected the first commercial scale tidal power turbine into Scotland’s central power grid. It has installed the 1 MW tidal power turbine at the European Marine Energy Centre in Orkney.
Ukraine: The 80 MW Okhotnykovo solar plant in the Crimea is set to reach a total output of 100 GWh “shortly”, according to Activ Solar. Wind and additional solar capacity will also be added to raise its capacity to 2 GW.