Enel starts third genco sale

Enel launched the sale of its third generating company (genco) Interpower, with full page announcements in the Financial Times.

Offers for the 2611 MW Interpower company had to be placed last month. Interpower is the smallest of the three gencos Enel has to sell in order to comply with a law on energy sector liberalization requiring it to shed 15 000 MW of generating capacity by 2003.

The government is also trying to force Enel to sell some additional capacity by changing the definition of the 50 per cent generating capacity share to “nominal installed generating capacity”.

The original definition included imported electricity in the total amount of power against which Enel’s generation market share was measured. If this amendment is passed, experts estimate that Enel – 68 per cent of which is held by the government – will have to sell a further 3000 MW than originally stated. Franco Tato, Enel’s CEO, expressed his concerns on the company’s future. He asked a room full of politicians: “What should we do? What is our future? Should we be liquidators or developers?”

Antonio Marzano, industry minister showed no sign of remorse. He said: “Frankly I do not believe it. Enel will see its capacity redimensioned, but it will also be compensated so that it will maintain its value.”

Shell and Elsam in benchmark carbon emissions trading deal

Royal Dutch/Shell and Elsam, Denmark’s largest electricity generator, have swapped carbon pollution permits, establishing the first trading link between the only two government-backed carbon emission trading schemes in the world.

Trading of carbon emissions is seen by some as the best way of minimizing the cost of reducing greenhouse gases. Under the swap, Shell has taken Danish allowances from Elsam in return for UK allowances given to the Danish company. Albrecht von Ruffer of Natsource-Tullett in London, which brokered the deal, said: “It is not a huge deal in volume or financial reward. But it is significant because it proves there will be trans-frontier deals even in the absence of allowances being formally interchangeable between national schemes.”

Shell has operations in Denmark, where it has to comply with mandatory Danish emission cuts, so can use its allowances from Elsam to meet its Danish pollution reduction target.

Verbund agrees to Austrian JV

Austria’s largest utility verbund agreed to form a power joint venture with five state utilities in a polittically-driven bid to stamp out foreigners acquiring the nation’s lucrative “green” power. The deal, which will see power production, trading and marketing combined, marks the end of a similiar plan between Verbund and Germany’s E.ON which stalled earlier this year after politicians called for an all-Austrian alternative.

Chancellor Wolfgang Schessel said that Verbund would hold a two-thirds stake in the joint power trading company and a one-third stake in a new firm serving customers using more than four GWh per year.

The remaining stakes will be held by EnergieAllianz, an exisiting venture between Lower Austrian energy supplier EVN and the utilities of Linz, Vienna, Burgenland and Upper Austria.

Italy to enhance French connection

The Italian transmission company Terna, a member of the Enel Group, has awarded Zurich-based ABB an order worth €18m ($16.5m) to supply two phase-shifting transformers and to integrate them into an existing station control system.

The phase-shifting transformers will be used to optimize the transmission of energy from France to Italy, which depends on electricity imports to cover its power requirements. The uneven utilization of power lines in the European network system has so far meant that the transmission capacity cannot be fully utilized.

Alstom wins Gaz de France order

Alstom has been awarded a contract with a total value of around €450m ($413m). The contract is for the turnkey supply of a 800 MW gas-fired power plant to be built at Dunkirk, on the northernmost tip of France. The plant will be owned by Gaz de France Group.

The contract, scheduled for early 2005, includes an agreement for a 20-year maintenance service package for the gas turbines, which is currently being finalized.

Alstom will deliver two 400 MW power trains, each composed of one GT13E2 gas turbine fired by natural gas, one gas-fired boiler running on blast furnace and coke-oven gases from the nearby Sollac Atlantique steel works, one 235 MW steam-generator set, the cooling water system and all electro-mechanical auxiliaries.

News digest

France: Powernext has hit its membership target for 2002 as TXU, RWE, BP and Statkraft start trading on the French electricity bourse. Powernext, one of the latest of several electricity bourses to debut in Europe’s deregulated market, had a target of 21 members in 2002 when it launched on November 26 with just six members.

France: The dismantling of EDF’s nuclear power plant at Brennilis in Finisterre has been started following the isssue of regulatory approvals by the nuclear safety agency. The plant has been inactive since 1985. One of the four buildings which make up the core of the power station will be removed.

Germany: German utility E.ON is set to take control of regional German utility Energie Mitteldeutschland. The 13 municipalities that own parts of EAM have agreed to sell close to half of their 51 per cent package to E.ON for €1bn ($917m). E.ON will thus increase its stake to more than 60 per cent from its current 46 per cent.

Italy: The European Commission has cleared the acquisition of a 25 per cent stake in the Italian power generator Elettra GLL by RWE Power under the EU’s merger regulation. Elettra is part of the Lucchini group and the result of the deal will be that Elettra is controlled jointly by RWE and Lucchini.

Norway: Statkraft, the Norwegian state-owned power producer, said it had no plans to revivie merger talks with Finland’s Fortum. The two companies discussed combination for six months but never came as far as merger valuations. A combination would have created the second largest Nordic power producer.

Spain: Enel will invest €1bn ($917m) by 2006 to fund the expansion of its Spanish unit Viesgo. Under the terms of Enel’s industrial plan, 46 per cent of Viesgo’s plants will be turned into combined cycle units by reducing coal-fueled plants to 22 per cent from 39 per cent, oil-fueled to 13 per cent from 32 per cent and hydroelectric plants to 17 per cent from 29 per cent, with the remaining wind-powered.

The Netherlands: Mott MacDonald has been appointed owner’s engineer by BP Energy Marketing for €25m ($23m), 22.5 MW wind farm to be built at BP’s and ChevronTexaco’s jointly-owned Nerefco oil refinery near Rotterdam in the Netherlands. The scheme will be built by Nordex.

UK: UK renewable energy company Ecotricity said it has started building the first wind farm in Lincolnshire. Contractors have begun laying foundations at a water treatment site in Mablethorn for two 600 kW wind turbines this month. Lincolnshire has set a target of having 48 MW of wind power by 2010.