Europe News

News digest

Austria: Rating agency Standard & Poor’s has warned that Austrian electric utilities could face challenges to their credit ratings over the next three to five years due to increasing regulatory and competitive pressures, although it regards proposed alliances between a number of the utilities as beneficial.

Finland: Wärtsilä is to supply two biopower plants for combined heat and power production to Finnforest Corporation’s Vilppula and Renko sawmills. Electrical output at both plants is 2.9 MW and the total heat output is 22.5 MW.

Greece: The Public Power Corporation of Greece has placed an order with Alstom for an electrostatic precipitator for a 300 MW boiler fired by brown coal at the Megalopolis power station in southern Greece in order to meet stricter environmental standards and reduce O & M costs.

Norway: Electricity generated by the world’s first grid-connected underwater “windmill” located 50 m under the sea in a remote Norwegian strait is expected to flow this spring. The company behind the project, Hammerfest Strom, is planning a further 20 mills but accepts that costs are currently twice that of wind power.

Spain: GE Power Systems is supplying two Frame 6FA gas turbines and a steam turbine for a new 220 MW combined cycle power plant in Granadilla, Tenerife, operated by Endesa subsidiary, Uniàƒ³n Eléctrica de Canarias S.A.U. Combined cycle operation is planned in June 2005.

Sweden: Alstom has received an order for two fabric filter plants and dust transport systems for a sawdust fired boiler at Norrenergi’s Solna plant. It will also supply a catalytic nitrogen reduction system for a crude oil furnace at Preem Raffinaderi’s plant in Gothenburg.

UK: Enron Teeside Operations Limited, which owns a 133 MW power and water treatment plant and related infrastructure, has been bought out of receivership by Singapore utility SembUtilities, a subsidiary of the government-owned SembIndustries which owns plants across Asia, in a deal worth à‚£87m ($138.3m).

UK: Centrica is expected to complete the purchase of the 229 MW Roosecote gas fired power station in Cumbria from the administrative receivers of Lakeland Power in mid-May. A payment of à‚£24m ($38.2m) has been agreed and the acquisition will increase Centrica’s total generation capacity to 1934 MW.

UK: Independent power generating company Killingholme Power, owners of a 650 MW power plant in North Lincolnshire, has completed a refinancing with 20 banks, following its separation from US power developer NRG Europe.

AES challenges British Energy rescue package

US power generator AES said it has filed a case with the European Commission’s Competition Commission challenging the legality of the UK government’s rescue package for nuclear generator, British Energy. AES, the owner of Britain’s Drax power station, argues that under EU law, the rescue package should include measures to compensate other producers that have been hurt by the slump in power prices.

The EU’s competition authorities had approved the rescue package, which includes a à‚£650m ($1.03bn) emergency government loan. AES has said that it rejects the view of the UK government and the EU that nuclear plants cannot be mothballed, and that failure to support the nuclear generator will jeopardise power supplies. The US firm has also rejected an appeal by Greenpeace to make a joint challenge of the aid package, with the environmental body undertaking its own legal action.

The 25 per cent fall in UK wholesale prices that has occurred since new electricity trading arrangements were introduced in 2001 has particularly hurt those producers who do not have a retail arm.

Drax also lost a lucrative long-term power supply contract as a result of the collapse of TXU Europe.

GE bids for Finnish reactor

General Electric has now submitted its bid to supply Finland with its fifth nuclear power plant following Framatome ANP and Russian-based Atomstroi-export’s earlier tenders. Privately-owned Finnish utility Teollisuuden Voima Oy (TVO) said it now had sufficient tenders for competitive bidding.

GE’s plant design is based upon its Advanced Boiling Water Reactor (ABWR) design used in TVO’s existing plants, with improvements aimed at meeting the high safety standards of Finnish regulators.

TVO’s bid specifications cover three alternatives: turnkey delivery of a complete plant, delivery of the nuclear island only, or delivery of the turbine island only.

Suez to use Eutila for e-tender projects

French multi-utility group Suez is to work with Eutila to establish proof of concept projects using e-Tendering and e-Auction as a way to select its IT service providers across Europe. Eutila operates a pan-European marketplace for the utility sector for core and non-core products.

Suez aims to contract IT Professional Services in a broad range from junior consultants to expert system architects and project managers across the Netherlands, Belgium, France and the UK. The project has been completed with Suez providing Eutila with the names of over 100 potential suppliers and a successful e-Tender and e-Auction has already been held. The Suez project is Eutila’s largest ever managed e-Tender in terms of volume of suppliers and the type of post-tender analysis required.

The first e-auction took place in February over two days and resulted in cost and time savings for Suez with some 65 potential suppliers taking part.

Gas Natural chief loses support

Spanish oil company, Repsol YPF, which owns 24 per cent of Gas Natural, has decided not to reappoint Lopez Silanes as CEO of Gas Natural, when his term comes to an end next month. Repsol is strongly opposed to the g15bn ($16.5bn) hostile bid for Iberdrola which Silanes has supported. The company has argued that Gas Natural should not be seeking to raise more capital from shareholders and increasing debt at this time.

Repsol is entitled to appoint Gas Natural’s chairman as part of an arrangement with the group’s other main shareholder, Catalan banking group La Caixa. The bid itself has been rejected by Iberdrola on the grounds of both price and strategy and also faces the hurdle of regulatory approval.

Gas Natural has offered to dispose of 750 000 gas clients, representing 16 per cent of its business, together with 4800 MW of generation capacity in order to win over anti-trust regulators. Industry analysts do not believe that this will be enough with the proposed tie-up creating a dominant energy company in the Spanish market which would rank fifth among the world’s electricity companies by stock market value.

Biomass for Spain

Turbomach has been contracted by Bioenergàƒ­a Santamaràƒ­a to install and operate a biomass plant in the Càƒ³rdoba region of Spain that will combust olive oil residue. The plant will have a 14.3 MW gas turbine, an olive residue boiler and a 14.8 MW steam turbine.

The cogeneration plant will produce heat to reduce the moisture content in the olive residues so that it becomes suitable for combustion. The plant is expected to be able to supply 104 GWh/year of electricity to the local grid.

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