Europe plans green increase

The European Commission has action-planned new strategies under which the EU member countries are to increase wind, solar and other renewable energy sources.

New laws have been set which state that each country must achieve a certain percentage of renewable energy production by a specified year.

For example, France has the task of increasing renewable generation from 15 to 21 per cent. Sweden, which is more advanced than most European countries in this respect, has to increase its green generation from 49 to 60 per cent.

Those which do not comply with the target set by the rules could rely on Renewable Obligation Certificates (ROCs). ROC allows power companies to buy green energy from each other to meet the intended targets. The way in which the ROC scheme operates is that when renewable energy generators, such as wind farms or hydropower schemes, are granted ROCs by Ofgem, they can then sell the ROCs to the buyers of its green electricity or sell the ROCs and the electricity separately.

The suppliers have the choice to purchase ROCs, with or without green power or they can pay a penalty (buy-back) of three pence per kWh chargeable on every kWh not covered by a ROC. They can also opt for a combination of ROCs and buy-backs. The debt collected from buy-backs will be redistributed proportionally by Ofgem to the suppliers.

TXU starts European power transit scheme

TXU Europe has launched TXU Grid, a new service, by , that enables electricity generators, suppliers and marketers to transmit power across the major grids of Western Europe.

Previously, if similar companies wished to supply power abroad they had to undertake the complex and time-consuming operation of negotiating cross-border tariffs, capacity rights, congestion prices and other charges with separate grid operators in each country. The problems increase two-fold for each foreign country you wanted to supply.

These complicated measures will now be a thing of the past as TXU Grid implements a much simpler process that enables customers to deal with all matters in one sitting.

Martin Stanley, president TXU Europe Energy Trading said: “Until now, most grid operators have been able to resist Government pressure to open access to the high voltage transmission grid at fair prices. TXU Grid breaks the incumbents’ grip on the network by allowing the free movement of energy between European countries that will ultimately benefit all our customers. Now for the first time, customers are able to define the service they require rather than having it dictated to them.” Philip Adams, trading development manager, said TXU has, so far, received 70 enquiries for the service coming from RWE, EdF, Innogy, Endesa and Acquila.

Edison sells UK plant at a loss

US-based Edison Mission sold two coal-fired, UK power stations for half the price it brought them for two-and-half years ago.

Edison sold both Fiddler’s Ferry in Cheshire and Ferrybridge in West Yorkshire for a combined £650m ($910m), compared to the £1.3bn it paid for them. The new owner is American Electric Power (AEP).

Both stations have a combined generation capacity of 4000 MW.

The US-based acquirer is no stranger to UK investments as it owns Seeboard, the south-east of England’s electricity supplier. AEP, which beat off competition from a host of foreign plants, will finance the deal through short-term and non-recourse debt.

EdF completes Spanish Cantabrico acquisition

Electricité de France (EdF) has finalized talks to make the indirect acquisition of Spain’s fourth largest power company, Hidroelectrica del Cantabrico.

The Spanish government’s initial objection to allow EdF to acquire Hidrocantabrico was overturned when the state-owned company agreed to expand the interconnection capacity between France and Spain by up to 4000 MW over a period of five to ten years. Before the deal was set in place, Spain was limited to using just one interconnection line across the Pyrenees. The line had a limit of importing electricity to just 1100 MW, which is around three per cent of the demand.

The deal allows EdF to indirectly acquire the Spanish company through owning a controlling stake in its partially owned affiliate EnBW of Germany.

The potential move in building more transmission lines, has been received well by Hidrocantabrico officials who agree that EdF’s interception allows the Spanish market to open up.

An official said: “The agreement opens the Spanish electricity market to foreign suppliers.” Others added: “This is positive from a competition point of view and also from the point of view of securing alternative suppliers.”

The move by EdF sees the company soldiering on in its quest to become the world’s leading electricity generating giant, despite the controversies it endured last summer with Italian generator, Edison, in its plight to increase its two per cent share to 20 per cent.

News digest

Denmark: Denmark’s privately-owned wind turbine manufacturer, Bonus, has won a contract to supply 72 wind turbines, by 2003, generating a combined capacity of 150 MW, to local power firms. Several wind turbine firms bid for the project, including Danish rivals Vestas Wind Systems and NEG Micon, which are both listed on the Copenhagen Stock Exchange, and German-Danish firm Nordex.

Germany: German utility EnBW said it has disconnected its 14 000 MW Philippsburg-2 nuclear reactor from the network for safety checks which could last several weeks. Officials at the company said that two weeks after recharging the reactor with fuel, it had confirmed that a low-level concentration of boric acid had been discovered in the primary circuit.

Germany: Bremen-based power engineering group, Energiekontor has started construction on an 18.2 MW wind farm at Trandeiras in Portugal. It will install 14 wind power generators on the site each with an individual output of 1.3 MW costing about £15.5m ($21.7m).

Italy: The Italian government is studying transferring the ownership of the nation’s electricity grid from former monopoly Enel to operator GRTN and then selling off the operator.

Norway: Alstom won a ED20m ($18m) contract to supply the Tyin Power Plant located in the western Norway for Hydro Aluminium, a Norwegian IPP. Once completed, it will generate, 1460 GW/h, which is a 15 per cent increase.

Spain: A Spanish consortium led by Endesa (45 per cent) is to construct eight combined-cycle power stations in Italy via its newly acquired subsidiary Elettrogen. The project which is the most advanced so far is Ostiglia near Mantua where there is a thermal plant of 1251 MW.

UK: The UK government gave the go-ahead for British Nuclear Fuels to commence operations at a controversial radioactive fuel recycling plant, despite security alerts following the September 11 disaster. An official from the Department of the Environment, Food and Rural Affairs said about 7000 responses in favour of the plant had been received during five public consultations compared with 2000 against.

UK: UtiliCorp has bid to buy Midlands Electricity from UK-based FirstEnergy Corporation for $2.1bn as soon as FirstEnergy completes its acquisition of GPU. Around $2.2bn will be used to pay the cash portion of the merger, while $1.8bn will refinance short-term GPU loans. UtiliCorp said its offer is subject to FirstEnergy’s acceptance following completion of the GPU purchase. Completion of the purchase also would be subject to approvals.