Value of US utility merger deals hits near-record low
The total value of merger & acquisitions deals in the US power and utilities sector fell significantly in the third quarter of this year compared with the same period in 2010.
While the total number of deals dipped marginally – 36 this year compared to 37 last year – figures show the value gap is vast, hitting a near-record low for the period ending 30 September.
This year there were nine transactions worth more than $50m, with their combined value hitting $3.1bn. Last year there were 14 deals worth 10.9bn.
According to the statistics from consultants PwC US, the average deal size fell in the third quarter to $342m from $781m last September.
John McConomy, US power and utilities transaction services leader with PwC, said the focus for deals shifted to integration and sealing contracts already announced.
“Stock price volatility and debt concerns also contributed to deal slowdown in the third quarter and we believe many in-process and contemplated deals are being deferred until the capital markets settle down,” he added.
The biggest North American deal by far was LS Power Corp’s takeover of NextEra Energy Resources gas assets for $1.05bn.
Clean-tech investment rockets to £1bn
A surge in funding to energy storage companies helped US venture capital investment in clean-tech firms rocket 73 per cent increase in the third quarter of this year compared to 2010.
A total of 76 deals accounted for a total investment of $1.1bn, according to analysts at Ernst & Young.
“Confidence in clean-tech investing continues despite the challenging investment market,” said Jay Spencer, Ernst & Young Americas clean-tech director.
The energy storage sector raised $421m in the third quarter, marking a 1932 per cent increase on the same period last year. In 2011 so far, the market has raised $865.2m.
Ontario’s FiT programme under review
The Canadian province of Ontario is conducting a review of the Ontario Power Authority’s Feed-in Tariff (FiT) programme.
The review will consider a range of issues, including FiT price reduction, long-term sustainability of clean energy procurement and the introduction of new technologies and fuel sources. It will also develop new prices for FiT contracts, with the aim of balancing the interests of ratepayers with the need to encourage investment.
GE sends mobile power plants to tackle Bolivian emergency
GE has provided mobile aeroderivative power plants to help address “a power emergency” in Bolivia.
It has shipped one plant to Carrasco, near Santa Cruz, which is expected to be operational this week, and another to Kenko, near La Paz, which is due to be up and running in February next year.
Both plants will be operated by Empresa Electrica Valle Hermoso, a subsidiary of state-owned Empresa Nacional de Electricidad (ENDE).
Gustavo Ramos Terán, chief executive of Empresa Electrica Valle Hermoso, said: “There is a power emergency in Bolivia, and consequently, we have a need for fast, reliable power. GE was able to help us meet this need in a project that is providing 24 megawatts of power in just 90 days.”
Darryl Wilson, president of aeroderivative gas turbines for GE Power & Water, added: “Our TM2500+ trailer-mounted aeroderivative gas turbines have been developed specifically to respond to the need for fast or mobile power.”
The TM2500+ can operate on either natural gas or liquid distillate fuels and easily converts from 50 to 60 Hz.
US-Japan launches Hawaii Smart Grid
Japanese technology company Hitachi is to lead a $37m Smart Grid demonstration project in Hawaii.
The joint US-Japan initiative is expected to be operational by 2014 and the other companies involved are both Japanese: Mizuho Corporate Bank and the Cyber Defence Institute.
The objectives of the project are to establish a system model for the integration of clean energy and to verify smart technologies on Maui, where a high percentage of renewable energy has already been put into place.
Tokyo’s Cyber Defence Institute will also test the security of the system by carrying out attempted ‘hacks’.
energy project fires up in Brazil
A 4.3MW landfill gas-to-energy power plant has started operating in Brazil.
The project in Belo Horizonte, the capital of Minas Gerais state, is run by Asja Brasil, a subsidiary of Italian multinational group Asja.
It has been set up to recycle the city’s sanitary waste for 15 years and runs on three GE 1.4 MW Jenbacher gas engines, with a fourth due to come online by the end of the year. The engines are designed to generate more than 44,000 MWh of electricity a year.
Brazil: A push to expand infrastructure in the Amazon will require $120bn in public and private sector investment by 2020, said the Folha de Sao Paulo newspaper. Dozens of large-scale projects, including dams, power transmission systems, mines, and industrial farms, are planned or in progress in the nine states that form the Amazon region, said the paper.
Canada: Alberta’s electricity regulator has approved a power transmission line to run around the eastern edge of Edmonton, the provincial capital, estimated to cost C$596m ($558m). The Alberta Utilities Commission said that, with minor changes, the Heartland transmission line project “is in the public interest [with] regard to the social and economic effects of the project and its effects on the environment”.
Colombia: Colombia’s energy minister has held talks with his counterparts from other Latin American countries about the sale of electricity. Mauricio Cardenas said: “We have a great capacity of generation. There are countries that need our electricity such as Chile and Panama.”
Latin America: The Nordic Investment Bank has provided a loan of $50m to the Inter-American Investment Corp for energy projects in Latin America. At least 70% of the loan will be dedicated to renewable energy deals, including hydropower, wind power and biomass projects in any country where the IIC is active. The remaining 30% will be allocated to energy efficiency measures.
US: The first step has been taken towards building New England’s first offshore transmission truck line, designed to accommodate 2000 MW of offshore wind energy. Massachusetts-based Anbaric Transmission has filed an interconnection request for the project, called the Bay State Offshore Wind Transmission System.
US: Global mining company BHP Billiton plans to spend around $4.5bn on developing its shale gas business in 2012. This year BHP Billiton entered the market via the acquisitions of US shale gas firms Petrohawk Energy and Chesapeake Energy. BHP’s petroleum chief executive Michael Yeager said: “This is going to be a gamechanger around the world and for BHP Billiton not to be part of it would be irresponsible.”
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