Companies

Calpine considers disposal of natural gas assets

Heavily indebted US power producer Calpine is considering selling some or all of its natural gas assets.

Calpine’s assets are primarily located in the Sacramento basin of California, south Texas and the Gulf of Mexico. It also has a sizeable presence in Colorado, New Mexico and Utah. It has 11 billion cubic metres of proven natural gas reserves, currently producing two million cubic metres per day from 607 wells – seven per cent of Calpine’s gas needs.

The company did not release specific details of how it would use any income from potential sales, but it is thought that it would be used to pay off debts built up after implementing expansion plans before the decline in US power sales.

Dynegy returns heavy first quarter loss

Two after-tax charges are the cause of a $267m 2005 first quarter loss, according to the US utility Dynegy, which returned a $65m profit in the first quarter of 2004.

The two charges, which totalled $265m, included $156m spent on settling an environmental litigation action and $109m incurred in restructuring a power tolling deal.

Dynegy said it had acted responsibly to ensure the long term viability of its Midwest coal fired fleet. The first quarter was also marked by the company’s first growth-inspired acquisition since the start of its restructuring programme three years ago.

Chinese coal casts black cloud

The high cost of coal in China has hit US energy company Alliant, where first quarter earnings have taken a tumble due to its ownership of eleven Chinese power plants.

Alliant’s net income for the first quarter of 2005 was $2.4m, compared to $34.1m in the same period a year earlier.

It is now unclear as to whether Alliant will keep its foothold in China and serious doubts have been cast over the company’s future investment plans in the country. The board will review Alliant’s operations and aspirations in China in July.

European utility consolidation helping rating stability

Ratings stability among the top 20 European utilities over the first quarter of 2005 reflects the positive impact of a period of business consolidation and debt reduction, according to a report from Standard and Poor’s (S&P).

The Report Card also cited strong cash flow on the back of high power prices and moderate capital investment plans as reasons behind the stability, stating that sufficient cash flow had been generated for necessary investment.

S&P believe that most utilities can easily sustain their credit profiles and any fluctuations would result from acquisitions, share buybacks and dividend distribution.

Enel acquires majority Romanian stake

Romania’s state electricity company, Electrica SA, has sold Enel a 24.62 per cent stake in the distribution companies Electrica Banat and Electrica Dobrogea for €112m ($140m), raising Enel’s stake in each to 51 per cent.

The selling of controlling interests marks the first privatisation in Romania since the opening of its electricity market in 2003. The process is expected to accelerate in the coming years with the privatization of the other six regional distribution companies and generation facilities before the 2007 deadline set by the EU.

Enel has also recently purchased generating assets in Slovakia, Bulgaria and Russia.

Italy lifts EDF voting cap in Edison

The Italian government has withdrawn the decree barring EDF from having more than two per cent voting rights in Italy’s Edison, a move expected to put an end to a four year dispute over competition in their respective power markets.

EDF had made it clear that it could withdraw from the Italian electricity market completely if the limit remained while Italy argued that EDF was gaining an unfair advantage as France has yet to fully liberalize its energy industry.

A bid for Edison by EDF and Italian utility Aem is expected.

GE 2005 wind turbine revenues to exceed $2bn

GE Energy has received orders and commitments totalling 2400 MW of new wind power capacity for 2005, representing a projected increase in revenue from its wind business of 300 per cent compared to the year it entered the commercial wind turbine market.

The company achieved $500m revenue from wind energy projects in 2002 and it expects that figure to grow to more than $2bn in 2005. Orders in the US, where GE hopes to install 66 per cent of all turbines this year, have so far totalled 1650 MW, while it expects to install 1600 turbines world wide.


News digest

VA Tech orders up

Austria’s VA Technologie reported record order intake at €1.6bn ($2bn) for the first quarter of 2005 and sale up 11 per cent at €984bn. Subject to anti-trust approvals, VA Tech is due to be taken over by Germany’s Siemens AG.

Double diesel plans

Mitsubishi Heavy Industries intends to increase production capacity in medium and large industrial diesel engines from the current 2300 to 4200 per year by financial year 2006 in order to meet demand in China, south east Asia and North America.

Reliant sells hydro

Reliant Energy has completed its sale of two hydroelectric power plants for $42m to Brascan Power. The two stations near Clarion, Pennsylvania and Deep Creek in western Maryland, have combined capacity of 48 MW.

Konarka expands

US light to energy technologies company Konarka Technologies has opened a new centre of operation and R & D facility in Nuremberg, Germany.

Exelon sets green goal

Exelon Corporation has established a voluntary goal to reduce its greenhouse gas emissions (GHG) by eight per cent from 2001 levels by the end of 2008 and has pledged to work with its suppliers to reduce their GHG emissions.

Edenor for sale

EDF has begun the process of selling off its Argentinian electricity distribution company Edenor as part of its strategy to refocus on Europe. Bankers JP Morgan have been engaged to handle the sale.

VRB gets Reliable

VRB Power Systems plans to acquire one of its technology suppliers, Reliable Power. VRB Power will then have exclusive manufacturing and supplier rights to Sumitomo Electric Industries’ VRB technology and lower costs for 42 kW VRB cell stacks.

Intergen sold

Shell and Bechtel have agreed to sell Intergen and ten of its power plants with combined capacity of 5500 MW to a partnership between AIG Highstar Capital and Ontario Teachers’ Pension Plan for $1.75bn.

Alliant divests

Alliant Energy has sold its energy services business to Constellation Energy Projects & Services Group, a subsidiary of Constellation Energy, for $35m. Proceeds will go towards debt reduction.

Globeleq tops up

Emerging markets power company Globeleq has increased its ownership of 683 MW Egyptian gas fired power plant Sidr Krir to 100 per cent by buying the outstanding stake from Edison.

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