EUROPE

RWE chief hits out

Despite attending two energy summits Germany has not answered questions over its future energy security, Harry Roels, outgoing chief executive of utiliy giant RWE, has complained.

He said increasing pressure to cut prices could cut investment levels in future, when Germany should be using its huge coal deposits to reduce dependency on imports from countries such as Russia and Norway.

Utilities and politicians in Germany have been in conflict over the high profitability of German utilities, and regulators have threatened new price controls that would reduce utility profits. RWE has announced it would take legal action if the changeswent ahead.

Roels also said there was confusion over carbon dioxide cuts and the European Commission should do more to give security on carbon trading post-2012.

CO2 emissions rise across EU

Emissions of carbon dioxide from installations covered by the EU’s Emissions Trading Scheme (ETS) were 0.3 per cent higher in 2006 than in 2005, with four per cent of emissions still to be recorded, the European Commission (EC) has announced.

However, emissions were still 62.4 million tonnes short of the total allowances issued by member states to installations for the year. The countries with the greatest surplus of allowances were Poland, France and Slovakia.

There was a collapse in the trading price of carbon emissions allowances in late 2006 when it became obvious that there would be a large surplus of allowances over emissions.

The EC has taken a much stricter approach for the second phase of the ETS, forcing member states to make swingeing cuts of up to 30 per cent in the emissions allocated.

The Czech Republic and Germany both threatened to take legal action against the EC to increase their allocations, but both later backed down.

Siemens wins offshore wind contract

Siemens has announced it is to supply 30 turbines with a combined capacity of 108 MW for an offshore wind farm, known as Gunfleet Sands. It is being built off the east coast of England.

The new wind farm is being developed by Dong of Denmark, with an investment of €270m ($365m). It is due to go into operation in 2009.

This will be the third offshore wind project to use Siemens’s 3.6 MW turbines. The others are Lynn and Inner Dowsing. Siemens is also installing an offshore wind farm at Burbo Banks in the UK and Lillgrund off the coast of Sweden.

Stockholm waste-to-energy plant mooted

Fortum is planning to invest in a new waste fuelled combined heat and power (CHP) plant near Stockholm.

The waste-to-energy plant will be built and operated by Fortum Varma, a company jointly owned by Fortum and the city of Stockholm. It will be built at Brista, where the company already operates a bio-fuelled power station. It is adjacent to a waste treatment plant operated by Ragn-Sell and across the city from an existing waste-to-energy plant.

The plant will process 240 000 tonnes of waste – equivalent to Stockholm’s domestic waste – and will produce 57 MW of heat and 20 MW of electricity.

Fortum Varma already produces district heating representing about 75 per cent of Stockholm’s demand, 75 per cent of it from renewable sources.

CEZ to aid Russian reform

Czech electricity producer CEZ has signed a memo-randum of understanding with Russia’s state-owned utility RAO UES to extend and upgrade the power generating capacity at the Shchekinskaya power station.

The power station belongs to Territorial Generation 4 (TG4), a subsidiary of RAO UES, and TG4 is to form a joint venture with CEZ to build the new unit – the first time a joint venture has been established between a foreign investor and one of UES’s generating units.

The companies will build a 400-420 MW combined-cycle plant and modernize other units at the site. A second new combined-cycle unit and two coal fired units may follow, if the first venture is successful.

Vattenfall to halve carbon emissions

Vattenfall has announced plans to cut emissions of carbon dioxide from its generation fleet to half of 1990 levels by 2030.

The move was announced at the company’s 2007 AGM, when president and CEO Lars Josefsson said the company “wishes to take the lead on this issue”, saying that the company had already achieved cuts of 30 per cent since 1990.

Some of the saving will come from a switch to higher efficiency plants, but the company is also investing heavily in carbon capture and storage research and development.

Construction of a pilot plant for a lignite fired power station equipped with technology to capture and sequester carbon dioxide began in May 2006, and it is due to start up next year.

The plant, next to the company’s existing Schwarze Pumpe power station in eastern Germany, will cost some $89m. The company is also planning to invest $19bn in over the next four years in upgrading its generation and transmission network.

Commission report highlights market failures

Wholesale electricity prices in European Union (EU) electri-city markets are significantly higher than would be expected in perfectly competitive markets. This is the major finding of an independent report carried out for the European Commission.

The report examined hour-by-hour prices in six markets – Belgium, Germany, Spain, France, the Netherlands and the UK – and examined the mark-up charged by utilities by comparing them to those of a competitive market. It concluded that the mark-ups were highest where generators were most needed to meet power requirements.

The European Commission said the report supported its inquiry into the European energy sector, which concluded in January of this year that the sector should be “unbundled”, so that vertically integrated utilities were split into generation, transmission and retail companies.

Russia’s Putin gives Atomprom order

Russian President Valdimir Putin has ordered the government to set up a new joint-stock company to run the country’s nuclear power industry.

The new company, which will be called Atomenergoprom (Atomprom), will be a full-cycle corporation engaged in activities including uranium mining, fuel manufacturing, nuclear power plant construction at home and abroad, and electricity generation.

AtomproàƒÅ¸m will absorb four existing companies. These are, which are Techsnabexport, Atomstroyexport, TVEL and Rosenergoatomis.

The new company, which will be established 1 July, will be entirely controlled by the state.

National Grid calls for a market where efficency not proliferation is rewarded

The chief executive of National Grid, the UK’s gas and electricity transmission network operator, has called for a change in the way energy markets are regulated to encourage suppliers to sell less.

He said National Grid was having detailed discussions in the United States, in New York and Massachusetts, about incentivising companies to invest in energy efficiency, but in most cases energy companies were motivated by selling units of energy. He said the market had to be “turned on its head” because energy efficiency was the cheapest step to carbon emissions reduction.

Dong to go ahead with Horns Rev 2

Denmark’s Dong Energy has decided to go ahead with Horns Rev 2, a 200 MW offshore wind farm north of the existing 160 MW Horns Rev 1.

Danish energy company Energi E2 initially won a licence to develop the wind farm in 2005, but the company merged with Dong and others in 2006.

The new wind farm is expected to cost $65m. Work will start in 2008, with a commissioning date in 2009, Dong said. The plant will generate approximately 800 GWh per year.

World’s largest gas turbine on way to Bavaria

The world’s largest and most powerful gas turbine is being transported from Berlin to Bavaria.

The turbine, built by Siemens Power Generation, is 13 m long, 5 m high and weighs over 440 tonnes. It will have a capacity of 340 MW. The prototype will be tested at an experimental plant in Irsching, Ingolstadt. Following a test phase it will be extended to form part of a combined-cycle power plant rated at 530 MW. The new plant will have an efficiency of over 60 per cent compared to the previous best of 58 per cent.

The first firing of the power plant is planned for November of this year, and the plant will be taken over by Eon Kraftwerke in 2011.

In preparation for a planned merger with multi-utility Suez, Gaz de France has announced changes to its organizational structure.

There will be five operating branches: global gas, including exploration and production, LNG and trading; infrastructure, including transmission, LNG terminals, storage and distribution; energy France, which includes sales and electricity production; international; and services.

The new company will have a three-tier management structure with a group head for each operating branch, and business units within the branch.

The plan is intended to give the branches and business units greater responsibilities and autonomy.

The business units will be responsible for the operating performance of the group’s business activities as part of the operating branches. Gaz de France said the change would also boost the group’s commercial dynamism so that it can take advantage of energy market deregulation.

Gaz de France unveils ambitions for restructure

In preparation for a planned merger with multi-utility Suez, Gaz de France has announced changes to its organizational structure.

There will be five operating branches: global gas, including exploration and production, LNG and trading; infrastructure, including transmission, LNG terminals, storage and distribution; energy France, which includes sales and electricity production; international; and services.

The new company will have a three-tier management structure with a group head for each operating branch, and business units within the branch.

The plan is intended to give the branches and business units greater responsibilities and autonomy.

The business units will be responsible for the operating performance of the group’s business activities as part of the operating branches. Gaz de France said the change would also boost the group’s commercial dynamism so that it can take advantage of energy market deregulation.

News Digest

Bulgaria: Bulgarian power grid operator NEK has invited bids for a 49 per cent stake in a new nuclear power station to be constructed at Belene. NEK will retain a 51 per cent stake and buy its output for 15 years. Enel, CEZ, Iberdrola, E.ON and RAO UES have been tipped as potential investors in the 2000 MW unit, due in operation in 2014.

Bulgaria: Italian power giant Enel has announced plans to expand its Bulgarian power station Maritsa East 3. The company will build a 750 MW lignite fired station on the site, which is next to the Maritsa East mine, at a cost of $1.3bn.

Bulgaria: The sale of Bobov Dol, a 630 MW coal fired power plant, has been halted. Greece’s Public Power Corporation (PPC), which was to buy the plant at a cost of $142.7m, announced the cancellation. PPC and the Bulgarian authorities were said to have clashed over coal purchasing and environmental issues.

Denmark: Energy consumption in 2006 increased by 6 per cent, the Danish Energy Authority has announced. Carbon dioxide emissions were up by 16 per cent, due to a higher level of coal burning in generating electricity. Denmark imported power in 2005, but exported it in 2006.

Finland: E.ON has failed in an attempt to buy land to build a new nuclear power station in Loviisa, where one station is already sited. The local town council rejected the $8.8m offer by 16 votes to 11.

Finland: Fortum has cancelled plans to build a power plant in Inkoo. Planned co-operation over the plant had not developed as expected and expected construction costs had increased.

Germany: VA Tech Escher Wyss has won a €20m ($27m) contract to supply mechanical equipment for a refurbished hydropower station in Albbruck-Dogern, Switzerland. The refurbished plant, owned by a subsidiary of RWE, will supply 100 MW.

Ireland: State-owned power company ESB is to dispose of generation assets, allowing the regulator to allow competition to take the place of the current system of virtual auctions and revenue regulation. Ireland and Northern Ireland are expected to create a single electricity market next year.

Italy: Vestas Italia is to deliver, install and commission 34 Cestas V52-850 kW wind turbines for the Monte della Difesa project near Salerno, and provide maintenance for five years. The order was placed by AceaElectrabel Produzione.

Italy: Wood Group Light Industrial Turbines has won two long-term maintenance contracts for Siemens gas turbines, the first time Cefla has used a non-OEM provider for maintenance.

Netherlands: Evelop and Ballast Nedam have won permission to develop a 300 MW wind farm around 30 km offshore of Scheveningen. The wind farm is due for commissioning in 2011.

Russia: In his State of the Nation address President Putin said: Russia needs to increase its power generation capacity by two-thirds by 2020. State and private power companies must invest up to $500bn to reach that target, and he called for a focus on non-gas generation.

Russia: Russian utility RAO UES has announced plans to build a 420 MW combined-cycle plant at its Moscow station. The plant will be built by Alstom, which marks the first time that an EPC contract has been awarded by tender in Russia. The plant, which will also provide heat, will be commissioned in early 2009.

Russia: RWE and Russia’s Energy Carbon Fund are to co-operate to raise efficiency of power plants at an RAO UES subsidiary, Territorial Generation Company 4. The upgrade will be funded by carbon credits, which RWE will purchase.

Spain: An 11 MW innovative solar power generator has been inaugurated in Spain, using a specially designed steam turbine from GE Oil and Gas. Mirrors reflect the sun’s rays to the top of a tower where it produces steam to run the turbine.

Sweden:Regional utility Soderenergi has begun placing contracts for Sweden’s largest bio-powered combined heat and power plant. Earthworks for the Igelsta plant will be carried out by project developer JM AB.

Turkey: A 300 MW hydropower plant at Borcka has been inaugurated by the president. The plant on the Coruh River was built by the state’s DSI Hydraulic Works and has two Voith Siemens hdro turbines.

UK: British Energy has been granted 10-year safety approval for operation at its Hinkley Point B and Hunterston B nuclear stations. The twin-unit stations are operating at low power, while cracking in heat exchangers is assessed. The company will decide whether to extend their economic lifetime, current to 2011, by March 2008.

UK: EDF Energy is to provide funding for two air source heat pumps in Kent, UK. The utility’s à‚£30 000 ($59 000) grant will trial the microgeneration technology at two community sites, where it will replace oil and electric heating systems.

UK: Subocean is to install undersea power cables for two offshore wind farms in a à‚£5m ($9.9m) contract with utility Centrica. The 5km cables will connect the Lynn and Inner Dowsing wind farms to the onshore grid and should go into operation in 2008.

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