National Power boosts overseas investment
UK electricity group National Power is to invest $600m expanding its US power station portfolio, its first large-scale overseas expansion since announcing last year plans to demerge its international and domestic business units. The group has also entered a strategic alliance with Spain’s Union Electrica Fenosa (UEF) to work on power projects in the Middle East and the Americas.
The two deals are seen as a demonstration of the group’s commitment to growth and developing strength in overseas markets. Chief operating officer Graham Brown said that organic growth is the preferred expansion route of the newly demerged unit, International Power, but that it had not ruled out making acquisitions overseas.
The company will construct two combined cycle plants, in Texas and Massachusetts, bringing total investment in the USA to $1.9bn and increasing its combined cycle generating capacity there to 4000 MW. Both plants will be built by ABB Alstom Power.
Under its deal with UEF, the two companies will develop power projects in the Middle East, and will form a joint operations and maintenance company to provide services to power stations in the USA and Mexico. The joint venture will initially provide services to plants using ABB Alstom’s GT24 gas turbine technology.
TransAlta to sell Canada, NZ units
TransAlta Corp., Canada’s largest investor-owned power utility, is to sell power distribution and retail units in Alberta and New Zealand worth up to $970m in a move to generate cash and protect its dividend. It has announced that it intends to focus its growth and investments on its generation and transmission assets.
The company is holding talks with potential buyers for the Alberta business units, worth around ten per cent of its asset base, and is talking with New Zealand’s Natural Gas Corp. for the sale of TransAlta’s 75.8 per cent stake in TransAlta New Zealand. The sales will leave it with 4500 MW of generating capacity in Alberta, as well as natural gas fired plants in North America and other international markets.
TransAlta believes that it does not have the scale of business needed to be successful in retail electricity. It wants to focus on its low cost business areas – generation, transmission and independent power projects. The Alberta power distribution and retail businesses to be sold supply power to 350 000 customers.
Multi-utility ScottishPower, which recently completed its acquisition of PacifiCorp, has announced a joint venture under which it will offer a range of financial and household services over the internet. British Energy has also announced that its has bought a stake in a UK-based internet property search portal.
ScottishPower is keen to maximise the value of its customer base. It will join with the Royal Bank of Scotland to offer a range of packaged financial, utility and maintenance services to a combined customer base of 10m. The two companies will target the residential and small business markets.
BNFL buys ABB nuclear unit
British Nuclear Fuels Ltd. (BNFL) has announced the £300m ($480m) purchase of ABB’s nuclear division. The deal, announced at the end of December 1999, will strengthen the group’s international position ahead of its planned privatization.
French group Framatome and GE of the USA are also thought to have bid for the engineering group’s nuclear unit. BNFL has traditionally been associated with the back end of the nuclear cycle, dealing mainly with spent fuel. Earlier in December the group’s exports of mixed oxide fuel to Japan were suspended over quality assurance concerns.
The purchase is in line with BNFL’s corporate strategy of becoming a leading global nuclear company able to provide a wide range of services in the nuclear cycle. The ABB unit employs 3000 people.
Bechtel to capture energy consulting market
US engineering and construction group Bechtel is to form an independent energy technology consulting business in a bid to capture deregulating and privatizing energy markets in the US and around the world. The new company – Nexant – will capitalize on its relationship with Bechtel.
Nexant hopes to capitalize on the deregulation trend in the USA, and on the privatizations underway in South America, Eastern Europe and other parts of the world. It will offer strategic, economic and regulatory advice for restructuring, privatization and bidding, as well as for web-based information services, advanced and renewable energy technologies and energy distribution and management services.
ABB Alstom downsizes: ABB Alstom Power is planning to cut 10 000 jobs from its 55 000-strong workforce over the next two years. Most of the cuts will come from its operations in France and Germany, it is believed. The company set aside euro700m for restructuring costs when it was formed last year.
Ballard collaborates: Canada’s Ballard Power Systems is to join with Coleman Powermate to develop a range of standby power products based on Ballard’s fuel cell technology. The companies will work to pursue opportunities and develop co-branded fuel cell products that will be made available through Coleman Powermate’s existing network of retailers in North America.
Capstone deal: Capstone Turbine Corp. and Mariah Energy Corp. have announced a marketing agreement in which Mariah will incorporate Capstone’s microturbine products into its combined heat and power systems. The first installation will be a commercial and residential building in Calgary, Canada.
GE soars: General Electric has reported a 16 per cent rise in earnings for the three months to December 31, 1999. Net profits have surpassed the $10bn mark for the first time, driven largely by its power systems division which reported a 30 per cent increase in profit for 1999.
Plug Power success: Plug Power has announced that it built 52 complete fuel cell systems in 1999 which are undergoing testing both at the company’s own test sites and other offsite facilities. Its distribution partner, GE, plans to start selling Plug Power’s household fuel cell systems in early 2001.
Reliant in Europe: Houston-based Reliant Energy will form a new business unit – Reliant Energy Europe – which will encompass its recently acquired Dutch power generating company, NV UNA. Reliant will use the company to spearhead its European expansion plans.
Siemens acquisition: Siemens Energy and Automation is to buy Moore Products Co. for $170m. Siemens will make an all-cash tender for all of Moore’s outstanding common stock at a price of $54.71 per share. Siemens says that the acquisition will enhance its own portfolio of products.
Toshiba JV: Toshiba Corp. and Schneider Electrics SA are to join forces to develop compact, low-cost gas circuit breakers for use in air insulated substations. Toshiba will manufacture the key components, while Schneider will make the power switch and assemble the breaker. They will start to supply the products to their customers in spring 2001.