France promises to open market

The French government has given assurances that it will open its electricity market following legal moves by the European Commission to force it to implement the EU directive on liberalization. The announcement from energy minister Christian Pierret came as Electricité de France (EDF) won regional clearance to acquire a stake in German utility EnBW.

Pierret said that the French government will put a text to the National Assembly in January 2000 allowing adoption of the law in February. Several EU governments, including Germany, Britain, Spain and the Netherlands, have voiced concerns over the failure of France to adopt the EU directive on electricity market opening.

EDF is to purchase 25 per cent of EnBW for DM4.7bn ($2.5bn, euro2.4bn) but must gain clearances from the German cartel office and the European Commission. EU governments claim that EDF is taking advantage of their open markets while retaining a powerful monopoly in its own market.

The European Commission began legal proceedings against both France and Luxembourg over delays in implementing the directive. It took the action in November after a French parliamentary committee failed to reach agreement on the text of a bill that would pass the directive into law.

Enel to sell three gencos

The recently floated Italian electric utility Enel has announced plans to sell three generating companies in line with plans to liberalize the country’s electricity market. Three power generating companies with a collective capacity of 15 GW will be sold by the end of 2002.

The three companies have already been established: Eurogen, Elettrogen and Interpower. Revenues from their sale are expected to be $2.7bn, and Enel may be in a position to receive bids in 2000. Several groups, including Southern Company, have already expressed an interest.

The three generators will require a total investment of $2.6bn over the next six years. Enel says that cashflow from each company will be adequate to support this.

Sweden closes Barseback 1 reactor

Sweden’s policy to bring an end to nuclear power in the country took a step forward in December with the closure of the Barsebäck 1 nuclear plant. Sweden may now have to import electricity during cold winter months to make up for any shortfall in supply caused by the closure.

Sydkraft, owner of the plant, lost an appeal against the closure in the Supreme Court in late November. Industrialists also opposed the move, saying that it will affect Sweden’s competitiveness. Barsebäck 1 supplied around three per cent of the country’s power.

Sydkraft, which is owned by Vattenfall and PreussenElektra, will be compensated by the government with SKr2.65bn ($309m, euro308m). The state will also contribute SKr3.3bn towards the cost of decommissioning of Barsebäck 1 and the cost of operating Barsebäck 2 as a single entity.

Barsebäck 1 was closed 24 years after commissioning following a decision in 1980 by the country to abandon nuclear power – the source of half its electricity. The second of the country’s 12 reactors to be closed is Barsebäck 2, which is due to be shut down by the summer of 2001.

Electrabel buys Epon

Belgian electricity generator Electrabel is to buy an 80 per cent stake in Epon, the largest Dutch electricity generator, for euro1.7bn ($1.7bn). The move has removed speculation of a takeover of Electrabel and marks its commitment to gaining market share abroad.

Electrabel will finance the purchase from its own cash reserves, and expects the deal to close by January 2000. Epon is owned by Dutch distribution and supply companies Nuon and Edon, and accounts for one third of the centralised Dutch generating capacity.

The deal will make Electrabel the fifth largest power company in Europe in terms of turnover and generating capacity, and could provide the utility with a springboard into Germany as Epon is active near the Dutch-German border. The Belgian utility had been touted as a possible takeover target by French multi-utility Suez Lyonnaise des Eaux, which recently acquired Tractebel. Tractebel owns 40 per cent of Electrabel.

British Energy buys Eggborough

British Energy, the UK nuclear generator, is to buy the 2000 MW Eggborough coal fired power station from National Power for £615m ($985m, euro984m) in cash. The deal will add flexibility to British Energy’s generating portfolio, enabling it to offer profiled contracts to customers.

The sale is part of National Power’s plans to demerge. Its generating capacity will be reduced to 8456 GW after the sale. Eggborough accounts for 2.5 per cent of the generation market in England and Wales.

News digest

Germany:

Sweden’s Vattenfall has agreed to buy a 25.1 per cent stake in German utility HEW for DM1.7bn (euro869m, $870m). The seller, the city of Hamburg, has also agreed to pool its remaining 25.1 per cent in the utility with Vattenfall, giving the Swedish group management control of HEW. Vattenfall intends to use the acquisition to serve as a platform for future activities in Germany.

Germany:

The federal cartel office is to investigate Munich’s electricity supplier – Stadtwerke München – following complaints that the utility is preventing the development of competition in the domestic power market. The cartel office believes that local utilities are breaching energy laws by demanding that households install expensive meters before competitors to use their distribution networks.

Germany:

International Fuel Cells is to install one of its model PC25 fuel cell power plants at a waste water treatment plant in Cologne. The 200 kW plant will use methane gas produced by the treatment plant to generate power and heat for GEW Koln, the electric and water utility of Cologne.

Greece:

Energy Developments has signed an agreement for a landfill gas power project near Athens. It will develop the 13 MW project jointly with local construction company Tomi. The project will begin commercial operation in late 2000.

The Netherlands:

US developer Reliant Energy has increased its stake in Dutch generator UNA from 40 to 52 per cent for $490m (euro489.3m). UNA is one of four large Dutch generators with 3400 MW of capacity representing a 20 per cent market share.

UK:

British Nuclear Fuels Ltd. (BNFL) has announced that the Bradwell nuclear power plant is to close in 2002. The Magnox reactor has been in operation since 1962, and BNFL says that to keep the plant open beyond 2002 would not be economically feasible considering electricity prices.

UK:

Siemens Power Transmission and Distribution group is to supply the converter stations for a 500 MW High Voltage Direct Current (HVDC) transmission interconnector between Scotland and Northern Ireland under a euro100m ($100m) contract awarded by Viridian Group. The euro234m project will help to enhance security of supply and lower electricity prices in Northern Ireland.

UK:

Energy minister Helen Liddell has given approval to plans for a 49 MW gas-fired power station at Ansty being developed by Rolls-Royce. In November the government blocked the construction of two gas-fired plants: a 1200 MW scheme in Kent proposed by Enron and a 560 MW plant on Anglesey.