Alstom cuts: Alstom admitted that 1000 jobs may go at its French energy division due to slack demand for its products. The company has also warned that it may have to cut early retirement benefits for UK workers to help fill a pension scheme deficit of £435m ($727m).
Aggreko warning: Temporary power hire company Aggreko has warned that 2003 profits will be significantly lower than last year due to oversupply in the US and poor trading conditions in France, Germany, Netherlands and the US.
El Paso board survives: A high profile revolt by shareholders in US pipeline company El Paso Corp. led by international businessman Selim Zilkha has been defeated. The board had argued that the rebel group’s business plan was uninformed and unworkable.
Hera IPO priced: Central Italian multi-utility Hera has set a maximum price of E1.408 per share for its initial public offering. Hera is only the second company to list on Milan’s stock exchange this year, the other being regional utility Meta Modena.
National Grid benefits: Better than anticipated cost savings arising from its merger has been forecast by National Grid Transco. It reported higher profits for the year to March 2003 due to its acquisition of US utility Niagara Mohawk.
Panda partners: Panda Energy International has formed a joint venture with investor and corporate raider Carl Icahn to acquire power plants and other energy assets. The group is in advanced talks with several power plant owners.
Power Machines hopeful: Russia’s Power Machines has said it may re-sign some $300m worth of contracts with Iraq that it had concluded before the war. Iraqi contracts represent 30 per cent of Power Machines’ net order book.
RWE consolidates: The board of giant German utility RWE is set to discuss a structure involving cutting the number of its units to seven from 13. The plan would see the merger of all generation units as well as the creation of one single distribution subsidiary.
Sapient Excelergy partnership: Sapient, the business and technology consultancy has announced a European alliance with Excelergy Corporation, a producer of software platforms for business processes in the energy and utility industry.
Westinghouse STPNOC alliance: Westinghouse Electric Company’s Repair, Replacement and Automation Services unit and STP Nuclear Operating Company announced an alliance covering technology planning for instrumentation and control systems asset management and modernization planning.
Spanish wind of change
Union Fenosa, Spain’s third largest utility, has sold 80 per cent of its wind generation unit to Italian power group Enel. The sale of the stake in Union Fenosa Energias Especiales will net Fenosa g168m ($199m) in cash and contribute to its debt reduction programme.
Enel has also paid g158.5m for a 50 per cent stake in a combined cycle plant the Spanish utility is building in Palos de la Frontea
Union Fenosa is aiming to reduce debt to g6bn at the end of this year, down from g7.2bn in March and has recently sold its Spanish transmission unit to Red Electrica, the national grid operator.
Meanwhile, Spain’s Gamesa has agreed to acquire Made Tecnologias Renovables, the wind turbine manufacturing unit of electricity company Endesa for g120m. Made has contracts to supply Endesa with wind turbines totalling 890 MW. Gamesa said the transaction would give it a 15 per cent worldwide market share in wind turbine manufacture.
Scottish & Southern closes in on Midland
Scottish & Southern Energy plc has agreed to pay £1.2bn ($2bn) to purchase Avon Energy, the holding company of rival power network Midlands Electricity. The business is 79.9 per cent owned by Aquila, with FirstEnergy Corp. owning the remaining 21.1 per cent. The deal could be scuppered if bondholders in Midlands Electricity reject the cash offer worth 86p to buy out £576m bonds.
The offer price barely covers total debt in the Midland’s business and, although Aquila owes FirstEnergy $95m on completion of the sale, it will not be pressed for early payment. Aquila failed to get regulatory approval this year for a cash transfer from Midland after credit ratings of Aquila and its UK business were reduced to below investment grade.
Scottish & Southern generates, distributes and retails power in Scotland and the south of England and will look to continue its earnings growth momentum by adding the central England regional power wires business
Ballard ends generator line
Ballard Power Systems has stopped production of its line of engine-driven electricity generators less than a year after starting their manufacture. Ballard insisted that the decision to discontinue the internal combustion gensets would have no impact on its fuel cell product lines or commercialization.
Last year, Ballard announced it would be producing stationary generators powered by gas or hydrogen fuelled engines, but a review of the long-term prospects of the programme concluded that production should cease. Testing of the generator sets revealed some system-related issues.
Ballard and Ford Motor Company, a major Ballard shareholder which provides engines, said the product’s “environmental profile makes the genset an attractive alternative to small turbines”.
GE Wind reports $2bn in orders
In the year that GE has been in the wind energy industry its Wind Energy unit has received more than $2bn in orders and commitments. GE said that commitments totalling over 3000 MW in new wind turbines are split almost evenly between the US and Europe/Asia.
GE added more than 60 engineers to its wind energy staff with more than 100 engineers focused on wind energy initiatives, targeting reliability and cost-savings.
During 2003, GE constructed the first prototype 3.6 MW wind turbine, designed for the offshore market which has been earmarked for several proposed projects. It also unveiled its 2.x series of versatile wind turbines providing three power classes for optimal generation in a wide variety of wind conditions.
“Harnessing the power of the wind for clean energy production is a concept that is gaining tremendous momentum worldwide,” said Steve Zwolinski, president of GE Wind Energy.
Former Dynegy employees charged
Three former employees of US energy trader Dynegy have been charged with criminal and civil fraud, accused of illegally disguising a $300m loan to improve the company’s operating cash flow.
US Attorney General Michael Shelby likened the gas contract transactions carried out by the three certified public accountants to alchemy.
The three executives are due to appear at a hearing in Texas this month, and could face court trials.
More woes for British Energy
Troubled nuclear generator British Energy has reported a loss of £4.29bn ($7.13bn) for the year to March 2003. The company, which produces 20 per cent of Britain’s power, has been hit by a combination of low wholesale power prices, high historic nuclear fuel costs and unforeseen reactor shutdowns.
British Energy has written down the value of its UK power stations by £3.7bn out of total write downs of £4.16bn, leaving it valued at only £639m.