National Grid sets out US investment plan

Electricity and gas network operators National Grid is to invest more than $3bn in its US networks over the five years from 2006 to 2011, in addition to existing maintenance.

The investment began with work valued at $600m on its New York and New England networks during 2006, during which more than 1300 miles of major electricity distribution lines were inspected and upgraded. In addition to replacing thousands of fuses and insulators, and installing new wood poles and transformers, the plan included vegetation management. Trees were trimmed along 10 000 miles of distribution lines and more than 22 000 were removed.

In the next 12 months vegetation management will be carried out on a further 11 000 miles of lines.

Rotor blades joint venture for REpower

Rotor blade manufacturer Abeking & Rasmussen (A&R) is to join wind turbine manufacturer REpower in a joint venture to produce new turbine blades developed by REpower.

REpower and A&R will have stakes in the joint venture of 51 per cent and 40 per cent, respectively. The new blades will be fabricated in a 16 000 m2 factory in Bremerhaven, close to the planned production facility for REpower’s 5M offshore wind turbine design.

Repower said producing the blades in-house would allow it to optimize wind turbine output by constant design work and technological advancement of the blades.

TXU counts cost of coal decision

TXU said it would take a $713m pretax charge in the first quarter for stopping development of eight coal fired power plants, a condition of the company’s $32bn sale to private buyers.

Kohlberg Kravis Roberts and Texas Pacific Group announced in February they would drop plans for eight of 11 coal fired plants that TXU was developing. The move won the support of two environmental groups for the buyout.

The charge would be about $463m after taxes, TXU said in a filing to the Securities Exchange Commission. The Dallas-based company is also expected to pay out $79m to cancel equipment orders.

ScottishPower merger takes effect

One of the world’s largest power companies has been created with the merger of Iberdrola and ScottishPower.

The two companies have a combined generating capacity of 40 000 MW, including a large renewables portfolios with 16 500 MW of wind capacity. They reach a total of 21 million customers and have an enterprise value of more than €65bn ($87.48bn).

Iberdrola said the two companies combined geographic footprint created an “Atlantic energy platform” and the group would grow through a substantial project pipeline and a significant number of other planned projects.

The merger between Iberdrola and ScottishPower was originally agreed in November 2006.

Acciona denies illegality in bid

Acciona, the Spanish engineering and construction group, has denied that it acted unlawfully when it made a joint bid with Italy’s Eni for Spanish utility Endesa.

The accusation was made by Manuel Conthe, the outgoing president of Spain’s national securities market commission, who said that the bid should not have been made before a rival takeover bid, by Germany’s E.ON, had expired. Conthe said he was resigning because the commission had not supported him when he reprimanded Acciona.

E.ON withdrew its bid in April in exchange for receiving some Endesa subsidiaries if Acciona’s takeover went ahead.

Montana snaps up MDU Resources

Energy company MDU Resources has announced plans to sell its independent power producers (IPPs) to Montana Acquisitions, a new company formed by Paul Prager, a former energy industry executive, and Natural Gas Partners III.

The sale includes Centennial Power, with 603 MW of coal, gas and wind capacity on power purchase agreements, and Colorado Energy Management, which provides design, construction, and operation and maintenance services.

The deal was valued at $636m, which includes $36m of debt. MDU said it would use the money to fund its core business, including the acquisition of Cascade Natural Gas.

Energy auctions planned by Endesa and Iberdrola

Endesa and Iberdrola are to carry out the first of a series of three-monthly virtual power plant (VPP) auctions, which will be carried out in five lots between June 2007 and June 2008.

The VPP auctions were agreed with Spanish regulators to increase the amount of energy sold under bilateral contracts and market liquidity.

The 14.8 TWh to be auctioned will be split into baseload and peakload options for periods of three, six or nine months and delivered in the period to June 2009.

The auctions are being pub-licized at a dedicated website, www.endesa-iberdrola-vpp.com, with further information made available for interested parties and restructured information available for those parties who have registered to take part in the auctions.

Alstom makes Chinese acquisition

Power and rail engineer Alstom has completed the acquisition of Qingdao Sizhou, a market leader in China for boilers. The Chinese company has a “strong focus” on bottom ash handling systems and related service business.

Some 500 power plants in China use Sizhou’s equipment. Alstom says the acquisition will allow it to quickly expand its presence in China’s fast-growing boiler, environmental products and services market. The combined company, Alstom Suzhou, will also provide a low-cost manufacturing base for Alstom in the form of its recently built 180 000 m2 facility in Jiaozhou city near Qingdao.

Alstom said the acquisition was an important step in its plan to become a full local service provider.

Gas plant gets go-ahead

Calpine subsidiary Otay Mesa Energy Center LLC (Omec) has completed financing for a 596 MW gas fired power plant near San Diego, California.

Omec has obtained credit financing to the tune of $377m to build the plant, which will then be converted to a term loan upon completion of the plant, which is expected in May 2009.

Omec has also agreed a ten-year rolling agreement with local utility San Diego Gas & Electric (SDG&E) for the full output of the plant. The utility will provide gas fuel for the plant and will have the ability to dispatch power from the plant as required.

SDG&E will also have the right to purchase the plant in 2019 at the end of the contract.

E.ON sees 1Q profits surge

Europe’s largest utility, E.ON, has announced first quarter profits up 50 per cent on the same period last year.

Profit was up because wholesale natural gas prices had fallen much more quickly than retail prices, the company said, and, along with the natural gas business, profit had been driven by E.ON’s UK business.

Earnings had been stronger than the market expected, and the chief executive of E.ON, Wulf Bernotat, said that net income over the year was expected to be higher than the previous year, up by a “single digit gain”. The company has gained new gas supply contracts in Denmark, France and Italy.

Wind acquisition for HgCapital

Germany’s Enertrag has sold its wind farm portfolio to HgCapital, the European energy sector investor, for €69m ($93.2m).

The portfolio consists of four wind farms in Picardy, France, with a total capacity of 47.5 MW. The wind farms are in development: the first has already gone into operation; the other three will be built over the next year. Enertrag will operate and maintain the wind farms for 20 years.

HgCapital said the acquisition was part of its strategy to assemble a portfolio of renewable energy capacity with a value greater than €1bn. The fund has wind farms in Wales, Ireland and England, and has acquired rights for over 500 MW of other plant in Europe.

EWE acquires Turkish stake

German utility EWE has acquired a 39.9 per cent stake in Turkish natural gas supplier Bursagatz, part of the Calik group. The Turkish company has more than 530 000 contracts to supply gas in the Bursa region of the country.

Oldenburg-based EWE is the first German utility to take a stake in a Turkish gas company. EWE said the acquisition would strengthen its energy division and would allow the company to introduce Turkey to European energy markets and infrastructures.

News Digest

Australia: Alinta has agreed to sell its Wattle Point wind farm for A$225m ($185m) to the Energy Infrastructure Trust, a wholly owned subsidiary of New Zealand’s ANZ Energy Infrastructure Trust. Alinta acquired the wind farm when it merged with AGL in 2006.

Australia:Babcock & Brown said it would raise again its takeover offer for Australian utility Alinta. The utility’s board endorsed Babcock’s previous offer but a raised bid may be necessary to trump proposals by Macquarie, which has also submitted a revised bid.

France: Suez, the French utility, is expected to raise its stake in Gas Natural to become the Spanish company’s third biggest shareholder. Suez is set to spend €1bn ($1.36bn) to increase its shareholding from 5.4 per cent to a proposed 11.3 per cent.

Germany: Michael Weiss has taken a majority interest in the KCH Group, a German maker of industrial surface protection systems. Weiss was previously co-owner and managing director and takes his stake under the terms of a previous management buyout.

Italy: Enel has renewed and increased its global medium-term notes programme. In a programme organised by Deutsche Bank and JP Morgan it increased the amount from €10bn ($13.5bn) to €25bn.

Italy: Italian utility Enel has announced first quarter profits up by 12 per cent, against expectations of a fall in profit. Sales were down in Italy but up in Eastern Europe and Russia, and costs were cut by 7.2 per cent.

New Zealand: Vector has conditionally agreed to acquire a 19.99 per cent stake in NZ Windfarms. The two New Zealand companies are planning to expand their portfolio of small wind farms.

Russia: Russia’s Territorial Generating Company 1 (TGC1) has announced it will issue new stock totalling €930m ($1.26bn) to increase its 6000 MW power and 17000 MW heat generating capacity. Fortum, the second largest shareholder with 25 per cent, said it would acquire shares to maintain its stake.

Singapore: Design, engineering and risk management consultancy BMT Group has acquired BrightFire Engineering Services, a software company based in Singapore. The acquisition helps BMT offer a range of specialized services from feasibility studies to operational optimization.

Spain: Gas Natural has reported a 10.1 per cent profit increase for the first quarter, up to €304.7m ($411.8m). The rise was against analysts’ expectations due to low demand from a mild winter.

Spain: Iberdrola, Spain’s second-largest power company, posted first-quarter profits up 14 per cent higher than last year, bringing income to $625m. The increase was due to higher prices in Spain and higher generation levels in Mexico.

Ukraine: Eviva SGPS has taken a stake in Ukrainian wind developer Nova-Eco. It is developing a 300 MW wind power project in Crimea, Ukraine, using technology supplied by Eviva’s parent company Martifer Group. The wind farms are due to go into operation in 2009.

UK: Climate change and carbon credit business Camco has acquired ESD Partners and its subsidiaries for £10m ($19.75m) in cash and shares.

UK: Natural gas supplier Hydro has sold its half-share in joint venture Hydro Wingas to partner Wingas. Most of Hydro’s gas is sold to mainland European customers on long-term contracts, but short-term contracts in the UK have been of increasing importance.

UK: Oil producer BP and miner Rio Tinto have formed a company based in Weybridge, SE England to develop clean power projects around the world. The joint venture will initially focus on hydrogen fuelled power generation, using carbon capture and storage technology.

USA:Babcock Power Environmental has won exclusive US and Canada distribution rights for a mercury emissions reduction technology produced by German company Rheinbraun Brennstoff.

USA: Constellation Energy Partners has agreed to pay $115m to acquire coal bed methane properties in Kansas and Oklahoma from Energy Quest Resources.

USA: Sensor company LumaSense Technologies has completed the acquisition of Andros, a company focusing on gas analysis for the medical and clean technology sectors. The gas analysis technology is also used during emissions monitoring.

USA: The acquisition of Actaris Metering Systems by Itron has created one of the largest electricity, gas and water metering companies in the world. The $1.7 billion acquisition has brought together Actaris’s expertise outside North America with Itron’s US business.

USA: US government-sponsored tests on a solid oxide fuel cell rated at 3-10 kW have been completed six months ahead of schedule, according to the developers FuelCell Energy and Versa Power Systems. The fuel cell is intended to operate using coal as fuel. The project is one of three developing the technology; GE Hybrid Power Generation Systems and Siemens Power Generation head the others.