World News: europe

TXU Europe calls in the administrators

Struggling energy group TXU Europe finally succumbed to the pressure of a $2.9bn debt burden by calling in administrators to protect creditors. The appointment of KPMG and Ernst & Young followed the termination by AES Corporation of its contract with TXU Europe to supply power from the Drax power station.

The move immediately led to all power and gas deliveries being halted, including those from International Power’s Rugeley power plant, which accounts for nine per cent of International Power’s output.

The slump in UK wholesale power prices blamed for TXU’s difficulties has also thrown British Energy into financial crisis and led to several UK power plants being mothballed in recent months. Despite some improvement in wholesale prices there remains some overcapacity in the market.

A recent paper published by the centre-right think tank, The Institute for Public Policy Research, has called for a system of incentive payments to encourage the closure of older coal fired power plants, not only to reduce the overcapacity in the market, but also to help the government achieve emission reduction targets.

EU nations agree on power market opening

EU energy ministers meeting in Brussels have agreed to allow homeowners in the European Union to choose their gas and electricity suppliers starting in July 2007. The date set for liberalization of the domestic energy market is two years later than originally proposed by the EU Commission and will come three years after the business market is opened to competition.

The EU has been negotiating for ten years to reach a deal on opening markets. The French government ” which has fought to preserve the monopoly interests of Electricité de France ” had argued that more time was needed to assess the effects of the business-sector liberalization on price and quality of service before moving on to the household sector. However, France has been under pressure to accept a compromise. EU Commission President Romano Prodi has warned failure to open energy markets could cost the European economy €15bn ($14.9bn) a year.

France’s position softened following the election of the new right-of-centre government, which said it cautiously favoured more competition in the sector.

At the meeting, Germany defeated a plan to force electric utilities to separate generation and sales from transmission system operation.

Edison faces new credit downgrade

The Italenergia consortium which owns Italian energy group Edison is poised to increase the capital of the company by €500m ($505m) in order to avoid a ratings agency downgrade which would put its debt in the junk category.

Moody’s has threatened to allocate a non-investment grade to Edison unless a number of problems are addressed and Standard & Poor’s also said it was already reviewing its recently confirmed BBB rating.

Edison, Italy’s second largest utility, is controlled by a group headed by Fiat, Electricité de France (EDF) and banking interests. EDF said it expected the capital raising to be subscribed in proportion to the shareholders’ existing stakes.

Enel agrees Interpower sale

Enel has sold its third and final generating group, Interpower, to the Energia Italiana-Electrabel-Acea consortium for €551m including €323m in debt. Interpower has an installed capacity of 2611 MW.

The joint venture will cover electricity generation, supply, and trade, as well as gas supply, in Italy. The purchase will provide Acea with access to about 390 MW of capacity.

With its sale, Enel has completed ahead of the December 31, 2002 deadline the disposal of 15 057 MW. The three gencos have raised g8.3bn.

VA Tech Hydro and GE awarded CCGT contract

A consortium of Austria’s VA Tech Hydro and US engineering giant General Electric has won a contract valued at €180m ($178m) to build a new 400 MW combined cycle power plant near Londonderry, Northern Ireland.

Independent power company Coolkeeragh ESB awarded the turnkey contract covering engineering, manufacture and installation of a gas turbine, steam turbine, heat recovery generator and associated works. Construction is set to start immediately adjacent to the site of an existing oil fired station which will be decommissioned when the new plant becomes operational in 2005.

Northern Ireland power company Viridian Group announced that it would be opening its 343 MW Huntstown power plant on the outskirts of Dublin in the Republic of Ireland in November. The plant, in which Viridian invested €255m, is the Republic’s first fully independent power station and is capable of supplying up to ten per cent of its annual electricity needs.

News digest

Europe: The European Commission has faced criticism from a number of “green” groups for having a pro-nuclear agenda after it put forward proposals to extend its powers over nuclear energy, including the provision of loans and the safeguarding of funds for decommissioning.

Germany: Core utility activities at RWE achieved a 29 per cent increase in profits in the first nine months of 2002. RWE attributed a growth of 46 per cent in its electricity business to firmer German power prices.

Germany: A study commissioned by E.ON predicts that the expansion in wind power generation in Germany will require heavy investment in the power grid and a €850m ($842m) annual investment in balancing power from 2016.

Italy: Foster Wheeler has been awarded a contract by Voghera Energia worth €113m to build a new gas fired combined cycle power plant at Voghera, near Pavia. Ansaldo will supply the power train and Siemens the gas turbine technology.

Norway: The Norwegian government is proposing to allow the construction of gas fired power stations for the first time from 2006, on condition that technology is developed to filter out and store greenhouse gases like carbon dioxide.

Norway: Austria’s VA Tech Hydro has secured an order from Norwegian-based Lyse Produksjon for six new MicroGuss Pelton runners for the Lysefjorden plant, near Stavanger ” expected to boost the lifetime of the plant’s existing Pelton units and increase electricity output.

UK: Four indicative bids have been lodged for the Midlands electricity distribution network put up for sale by US energy group Aquila. The short list so far includes Malaysia’s YTL, US energy joint venture WPD, Scottish & Southern and Macquarie, an Australian bank working in partnership with United Utilities.

UK: Powergen has applied for a permit to test the firing of wood pellets or vegetable material mixed with low-sulphur coal at its Kingsnorth power station in Kent to assess the viability and availability of these biomass fuels.

UK: A 24-turbine wind farm capable of generating 31.2 MW near Peebles, Scotland has been opened by Brain Wilson, UK minister for energy. The Powergen Bowbeat project is the most powerful in Scotland.

UK: State-owned Gaz de France says it has bought UK energy sales firm RWE Trading Direct in order to increase its presence in Britain’s electricity market.

No posts to display