Europe World News

Dutch delay deregulation

The Dutch government has said that it will delay full opening of the country’s gas and electricity markets by six months in order to give companies more time to prepare for full competition. The market will now be fully opened in July 2004.

The move came after the government commissioned a study which concluded that not all energy companies were likely to be prepared for full market liberalization, which was due to happen in January 2004. This is the second time that the country has put back the liberalization deadline.

The Netherlands’ electricity and gas markets have already been partially opened, with commercial and industrial consumers able to choose their supplier. Customers have benefited from this through lower bills, but have also experienced errors such as billing mistakes.

Although the electricity market in the Netherlands is only 63 per cent open, switching rates have been high, according to Datamonitor. Healthy switching rates are expected for the first full year of competition, with Datamonitor predicting that nine per cent of residential customers will change supplier.

Residential customers switching to a ‘green’ tariff are already allowed to change supplier in the Netherlands.

News digest

Austria: Alstom has recently been awarded a contract by Voestalpine Stahl, Austria, for a total g18m. The contract covers the rehabilitation of an existing 135 t/h boiler and the design and supply of a new 135 t/h boiler with a peak load of 157 t/h. The boilers are for a steel mill located in Linz.

Denmark: The controlling interest in Denmark’s largest electricity company NESA, which has 520 000 clients in the Copenhagen area, is for sale. The price of the company is around g1.4bn. The municipality of Gentofte and the county of Copenhagen are the main shareholders with a 78.75 per cent stake.

Germany: The agreement merging the regional utilities Elektrizitatswerk Wesertal, Pesag and Elektrizitats-werk Minden-Ravensburg was signed in Paderborn, Germany. The enterprise will be called E.ON Westfalen-Weser and will be located in Paderborn.

Spain: Endesa said it made a g40m capital gain from the sale of its stake in national grid operator Red Electrica. Rival Spanish power firms Iberdrola, Union Fenosa and Hidroelectrica del Cantabrico placed a combined 28 per cent stake in REE among institutional investors.

Spain: Spain’s Gas Natural said it had presented a non-binding offer for a 35 per cent strategic stake in Greece’s national gas corporation, DEPA. It is rumoured that the Greek government will not sell below its of g300m ($353m) target.

Spain: Consulting engineers PB Power has been appointed owner’s engineer for three seperate 400 MW CCGT power plants in Spain. The contract was awarded by Spanish power company HidroCantabrico. PB Power has already provided engineering support services to the existing 800 MW Besos and San Roque CCGT plants and a number of new combined cycle plants in the country.

UK: Finnish outfit Fortum has sold its retail gas and electricity sales business in the UK to Quantum Energy Group. The business provides gas to 18 000 industrial and commercial sites and electricity to around 3000 sites. The company’s revenues in 2002 stood at à‚£103m ($167m).

UK: Creditors of Britain’s largest power station, Drax, plan to take a full ownership of the financially distressed business in a restructuring agreed with its US owner, AES. The power station owes over à‚£1.3bn ($2.1bn).

UK: European energy traders called on industry regulators to boost the region’s flagging power markets by forcing big utilities to disclose more price sensitive data on supply, demand and transmission.

APX heads for Belgium

Dutch energy bourse Amsterdam Power Exchange (APX) and the Belgian network operator Elia are aiming to launch an electricity exchange in Belgium. The proposed Brussels Power Exchange would run a spot auction and could be up and running before the end of the year.

The ownership structure of the exchange has not yet been finalized, and it still requires the backing of regulators in Belgium. Several energy traders have expressed their support for the project, according to APX.

The Brussels exchange would run a 24-hour spot auction that would be linked to APX’s existing spot exchange in a design called coupling. Prices on the two exchanges would be the same provided that there was no congestion on the transmission wires linking the two countries.

The move reflects APX’s ambitions in the European energy markets. It recently acquired two exchanges in the UK: EnMo, the natural gas commodity market, and the UK Power Exchange.

UK-Norway link clears hurdle

A proposed subsea cable running from Norway to the UK has received a planning permit from the UK government, bringing the project one step closer to reality. The 750 km link, which has been proposed by Norway’s Statnett and National Grid Transco of the UK, would be the world’s longest subsea cable.

The $1bn cable would run from Suldal in Rogaland county on Norway’s west coast to Easington in northeast England. It would enable Norway to import power during years of low rainfall and export power in wet periods.

Statnett has made an application to Norway’s Petroleum and Energy Ministry for a license to build the cable.

  • Russia and the UK have signed an agreement on the North-European gas pipeline which would bring Russian gas to the UK. The announcement came as the UK’s Institution of Civil Engineers issued a warning that by 2020, imported natural gas would meet 80 per cent of the UK’s energy needs.

Europe’s markets feel the heat

A heatwave in July placed a strain on electricity resources across Europe, causing electricity prices to rise and sparking fears of blackouts. Worst affected was Italy, parts of which were left without electricity.

Record temperatures and electricity demand in France forced state company EDF to restrict supplies through the Italian interconnector. Italian grid operator GRTN was forced to cut supplies in a number of areas, leaving 6 million people without power. The heat also affected reservoir levels in Italy and cooling capacity at nuclear power plants in Germany.

The blackouts have highlighted Italy’s low reserve margin. Edison said it will invest g1.5bn by 2007 to increase capacity by 4000 MW.

Europe adopts carbon emissions trading plan

The European Parliament and the Council of Ministers have reached agreement on the directive for greenhouse gas emissions trading, paving the way for the implementation of a Europe-wide carbon dioxide trading scheme.

The European Parliament adopted a compromise agreement on the emissions trading plans after negotiations with the Council of Ministers. The trading system will be the centrepiece of the European Union’s climate policy and will be key to helping it achieve its Kyoto targets.

The agreement was welcomed by organizations such as the World Wildlife Fund and Eurelectric. Adoption of the directive will help create certainty for companies involved in trading emissions, and will enable trading to start in 2005. However, Eurelectric noted that a number of issues must be resolved in order to ensure a truly effective market.

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