France passes electricity liberalization bill

France has passed a bill to liberalize the country’s electricity market, nearly a year after the EU directive on liberalization came into force. The law will be implemented after President Chirac signs the bill, and must also be approved by the European Commission (EC).

The move has been welcomed by France’s European partners. The EC has yet to decide if it will drop legal action against France over failure to implement the directive.

The law allows large industrial users consuming over 40 GWh per year to switch supplier. This will allow some 800 consumers representing around 30 per cent of electricity consumed in France to choose their supplier. A regulator will be created with FFr50m ($7.47m) of funding from the government.

State-owned electricity company Electricité de France will now be subjected to increased competition. Currently, users with demand in excess of 100 GWh per year have been able to switch supplier. Two such users have already done so.

• Electricité de France has formally completed the purchase of a 25.1 per cent stake in German utility EnBW. The $2.4bn deal gives EDF access to Germany’s southwest regional electricity market which EnBW dominates.

Commission will review Veba-Viag deal

The European Commission is to review in detail the proposed merger between German energy companies Veba and Viag, rejecting calls from the German federal cartel office (BKA) to be allowed to vet the deal.

The Commission cited the size and importance of the German electricity market in Europe as the main reason for its decision. It will review the implications of the merger for competition in both Germany and Europe as a whole over a four-month period. The BKA had asked to be able to handle the review, a move which would have allowed it to examine the merger alongside that of RWE and VEW.

The Commission is said to be concerned over the impact of the merger on competition in the generation and distribution sector in Germany. However, it will concentrate the European, rather than domestic, implications, a factor which is more likely to bring a favourable result for the merger.

• The Commission has approved a joint venture between London Electricity and Eastern Electricity to manage their distribution networks.

Enel compensated for loss of monopoly

The Italian government has agreed that the state electricity group, Enel, should be compensated for its loss of monopoly and costs relating to privatization and liberalization of the market. Enel will receive $7.3bn paid over seven years under supervision by the electricity and gas regulator.

The government has also adopted a decree opening the natural gas market to competition, ending the monopoly of oil and gas group Eni. The legislation gives some protection to Eni, and also leaves the way clear for the group to expand into electricity generation.

Enel is to sell 15 000 MW of generation capacity by 2003 under the country’s liberalization plans. Several potential bidders for the capacity have already come forward, according to Enel. These include a consortium led by Italian industrial group Merloni, and Enron.

The new gas decree states that between 2003 and 2010, no single operator can import or produce more than 70 per cent of national gas consumption. This does not apply to Eni’s own internal consumption, however, leaving the group clear to develop 7000 MW of natural gas fired capacity.

Swiss tussle with TPA

The Swiss competition authority, Weko, is dealing with third party access grid issues related to the liberalization of the country’s electricity market.

Watt Suisse and Migros have filed complaints against three utilities: Elektra Baselland (Liestal); Entreprises Electriques Fribourgeoises (Freiburg); and Service Intercommunal de l’Electricite (Renens). Watt has contracts to supply power to six Migros factory sites in the distribution areas of the three utilities. This is the second time that Weko has had to deal with TPA problems.

Transformer inaugurated

Engineering group ABB has inaugurated a dry oil-free cable-wound power transformer at a power plant in Sweden owned by Swedish utility Birka Kraft. The transformer, known as Dryformer, is the first of its kind in the world.

The Dryformer unit, rated at 20 MVA and 140 kV, entered service in the indoor substation at the Lottefors power plant near Arbra. It consists of a cable with polymer (XLPE) insulation as opposed to conventional designs which use copper insulated by oil.

The oil-free design eliminates the risk of oil leakage, and improves safety by reducing the risk of fire and explosions.

News digest

Finland: Swedish-Finnish paper manufacturing group StoraEnso is to sell its electricity sector business unit to Finland

Germany: Greenpeace Energy, a trading unit founded by environmental group Greenpeace, has enlisted over 6500 customers in its first five weeks of business. The company is offering domestic consumers electricity from renewable sources and natural gas fired combined cycle gas turbine units, and charges a 20 per cent premium over other utilities’ tariffs.

Germany: Negotiations have resumed between the government and four electricity groups over the abandonment of nuclear power in Germany. The government is trying to avoid having to pay the large sums likely to be demanded by the utilities as compensation for closing their nuclear plants, but little consensus appears to have been reached between the parties.

Norway: Norwegian grid operator Statnett is planning to finalize a contract for a cable supplier for a planned undersea power cable linking Norway and the Netherlands by May 2000. The NKr4.0bn ($487m) NorNed cable project was held up in 1999 after talks between the developers and cable supplier NKT Holding collapsed. Statnett and its Dutch partner, N.V Sep, have received fresh offers for the 600 MW project, which they hope to complete by 2004.

Sweden: Foster Wheeler Energia Oy has been awarded a contract by Sweden’s Vattenfall to supply a biofuelled circulating fluidized bed (CFB) boiler for a new power plant in Munksund. Foster Wheeler will supply a 98 MWth CFB unit that will be fuelled by bark and paper waste from an SCA Packaging Munksund manufacturing facility. The plant will supply power and heat to the factory.

UK: Electricity generators PowerGen, British Energy and National Power have rejected a “good behaviour” clause in a new license condition proposed by the energy regulator, Ofgem. The clause is designed to prevent manipulative behaviour, or “gaming” in the electricity market, but will, say the generators, stifle competition and market development.

UK: The world’s tallest offshore wind turbines will be erected off the northeast coast of England in the summer 2000. The UK government recently announced that all UK electricity supply companies will have to source ten per cent of their sales from “green” sources by 2010. However, the Non Fossil Fuel Obligation (NFFO) scheme, which subsidises renewable energy development, will be removed.