Italenergia move raises spectre of EDF control

Italenergia, the Italian energy company controlled by Fiat and Electricité de France (EDF), is pushing ahead with a proposed capital restructuring as part the debt-reduction exercise initiated by Fiat, needed to ease its own cash problems. The changes could allow EDF to raise its current 18 per cent stake, a move which is certain to meet with opposition from the Italian government which last year passed an emergency decree blocking EDF’s voting rights in Italenergia.

Some minority shareholders in Italenergia, the holding company which controls Italy’s second-largest power company Edison, have indicated that they would not support the recapitalization and reports suggest that Fiat might sell a large part of its stake to Citibank with an option to buy back in 2005. If Fiat has not solved its financial problems by then, the shares could fall into EDF’s hands.

EDF snaps up UK’s Seeboard

American Electric Power (AEP) has signed an agreement to sell Seeboard, its retail electricity and gas supply and electricity distribution subsidiary in the UK, to London Electricity Group plc (LE Group), which is owned by Electricité de France (EDF).

LE Group was one of four preferred bidders selected to bid in an auction conducted by investment bankers Salomon Smith Barney – the others being TXU, Scottish & Southern and E.ON.

The Seeboard transaction is valued at £1.39bn ($2.03bn). AEP bought Seeboard in 1996 for £1.6bn. Under terms of the agreement, AEP will receive £670m in cash for Seeboard, and LE Group will assume Seeboard debt of £722m.

EDF also owns UK-based energy utility SWEB.

Finnish parliament approves nuclear power project

Finland’s Parliament has voted by a margin of 107 to 92 to approve an application to build the country’s fifth nuclear reactor giving the applicant, Teollisuuden Voima (TVA), five years in which to apply for a construction permit.

The vote had been finely balanced with public opinion equally split on the issue.

In January, the government approved the application in principle and has now confirmed its view that the application is for the overall good of society.

There is likely to be a competitive bidding process for work and the owners of TVO will make their final decision on the choice of plant type on the basis of this bidding. Before submitting the permit application, the company must choose between two proposed plant sites.

VA Tech T&D wins order to supply UK’s largest cogen plant

VA Tech Transmission & Distribution has secured contracts valued at around €40m to supply equipment at the planned Conoco CHP plant to be built in North Lincolnshire, UK. The plant is to supply electricity and steam to nearby refineries as well as power to the National Grid.

VA Tech will design, supply and install an eight bay indoor 400 kV gas insulated switch-gear substation for Conoco’s Humber Oil Refinery. Its Peebles Transformers division is to supply the 730 MW plant with four generator set-up transformers via Foster Wheeler Energy.

The transformers, two rated at 335 MVA, 400/15.75 kV, and two at 135 MVA, 400/15.75 kV, will be connected to the gas and steam turbines which generate at 15.75 kV in order to step-up the voltage to 400 kV.

Enel orders GTs

Enel Produzione has chosen GE MS9001FA gas turbines to convert seven of its thermal power stations into combined cycle plants. Efficiency improvements of around 40 per cent will be achieved at the plants, which have outputs ranging from 800 to 1200 MW.

GE Power Systems will supply three Frame 9F units for a repowering project in Ostiglia and three 9FAs for a similar project in Sermide, 200 km east of Milan. Three turbines will be supplied for the Torrevaldaliga Sud project, three for the Chivasso project and one for a project yet to be finalized.

HEW joins Vattenfall Europe

The City of Hamburg has exercised its option to sell its 25.1 per cent stake in utility HEW to Vattenfall for €869m. It has also agreed to the restructuring measures on the formation of Vattenfall Europe on condition that certain business activities remain in Hamburg.

The transfer, which will take place following HEW’s AGM in August, will enable Vattenfall to proceed with the creation of an energy company in Germany, which will also incorporate Bewag, Laubag and Veag.

Vattenfall has agreed that by 2005 a staff of 3000 will be employed in Hamburg. HEW’s operative business will remain on site with Vattenfall Europe’s energy trading and IT functions.

News digest

Belgium: Royal Dutch/Shell has applied to the Belgian government to build an offshore wind turbine park reported to require an investment of €600m ($582m). Shell WindEnergy is currently evaluating wind projects in Europe with total capacity of 3000 MW.

Europe: Atlanta-based IntercontinentalExchange has launched over-the-counter trading in physical forward and option contracts for the UK, German and French power markets and is to extend its clearing services to the OTC UK natural gas and European power markets.

France: The French regulator CRE is to lower the threshold at which large energy consumers can choose their supplier. From 19 February 2003, some 800 customers will be eligible to participate in an open market, representing an increase from 30 per cent to 34 per cent.

Germany: TXU has paid €439m for a 74.9 per cent stake in Braunschweiger Versorgungs AG, a subsidiary of Stadtwerke Braunschweig which supplies 210 000 customers in the Braunschweig area, 70 km east of Hanover.

Germany: The German Cartel Office has opened an enquiry into possible market abuse by the Vattenfall-owned utility, Bewag after accusations that it is charging too much for third party access to its networks.

Italy: The first six geothermal steam turbogenerators ordered by Enel GreenPower and supplied by GE Oil & Gas will be in operation by the end of this year at plants in the Pisa and Tuscany regions. The GE machines are part of a €85m ($82.5m) turnkey contract covering eight Italian plants.

Spain: Intergen is reviving a project to construct a combined cycle power plant at Catadau, Valencia. The 1200 MW project is being revived under an agreement with the National Energy Commission.

Spain: The renewable energy division of Endesa has begun operating Spain’s first electricity plant powered by olive biomass. The plant has an installed capacity of 16 MW.

UK: The UK government has announced a £2.3m ($3.5m) grant for Wavegen to develop three shallow water wave generation devices off the Western Isles of Scotland.

UK: A report for the British government by the Office for Civil Nuclear Security says that staff shortages and security problems are hampering attempts to protect nuclear power plants from terrorist attack.

UK: The UK government’s long-awaited draft plan to promote CHP production does not go far enough, according to the CHP Association. The raft of measures includes tax breaks and changes to licensing rules.