20 March, 2002 – EU competition authorities yesterday approved the take-over of Spain’s fourth largest power company, Hidroelectrica del Cantabrico by a group comprising EnBW, Electricidade de Portugal and Cajastur of Spain, having resolved the involved of Electricité de France (EdF) in the deal through its part ownership of EnBW.
The European Commission had opposed the deal as it was originally proposed, as it believed it strengthened the collective dominant position of the firms.
“To eliminate these concerns, EdF, which controls the French electricity grid, EDF-RTE, undertook to increase to about 4000 MW the commercial capacity on the interconnector between France and Spain,” the Commission said
The increase in capacity will occur over a five to ten year period. Before the deal was set in place, Spain was limited to using just one interconnection line across the Pyrenees. The line had a limit of importing electricity to just 1100 MW, which is around three per cent of the demand.
The move by EdF sees the company soldiering on in its quest to become the world’s leading electricity generating giant, despite the controversies it endured last summer with Italian generators, Edison, in its unsuccessful effort to increase its 2 per cent share to 20 per cent.
A commission source was reported as saying, “Every deal with EdF will be gone over with a fine-toothed comb,” after the Commission announced that the review period had been extended.
In its statement, the Commission said, “The Commission’s fear was that once it would have gained a foothold in Spain and with access to Hidrocantibrico’s electricity generation capacity, EdF would likely resist any substantial increase in the interconnector.”
EdF has continued its acquisition strategy within the countries of Europe, which have gone ahead with market opening while domestically, the state-controlled company enjoys a near-monopoly position. France’s refusal to agree to electricity market liberalization within Europe continued last week in Barcelona when the summit of EU leaders could only push through freedom of choice to industrial customers by 2004.
Hidrocantabrico distributes electricity to more than 530 000 customers and natural gas to more than 126 000 customers in the northern Spanish province of Asturias, along with other areas. The firm also partially owns cable television, phone and Internet service firms.