Cogen industry laments European proposals

A proposed European Commission directive for combined heat and power (CHP) is in need of a thorough revision, according to industry organizations. Euroheat & Power and Cogen Europe issued a joint statement expressing their disappointment at the proposals’ lack of ambition.

EC Commissioner for Energy and Transport Loyola de Palacio said the directive was part of the drive to improve energy efficiency and combat climate change. But although welcoming the directive, the industry groups criticized the 50 MW threshold and lack of targets for growing cogeneration.

The EU’s indicative CHP target is an 18 per cent share of electricity production by 2010 and while a recent study reported growth between 1984 and 1998 of up to 11 per cent, it said there were indications of a decline since then.

The UK government wants the regulatory regime relaxed to encourage CHP production but is being blocked by the regulator, which is reluctant to change procedures that have helped reduce power prices in the UK by up to 40 per cent.

UK launches green power certificates

Trading in UK Renewable Obligation Certificates (ROCs) became possible in July with the launch of an online register. The register tracks the production of “green” electricity which the government says must amount to at least three per cent of all sales.

The ROCs are issued by regulator Ofgem and the register shows how these are trading, so enabling generating and trading companies and the general public to monitor trades.

Ofgem has named the 15 environmental experts that will make up an independent panel to help guide the regulator’s green agenda. The Environmental Advisory Group is chaired by Ofgem’s head, Callum McCarthy, and is formed by representatives from industry, lobby groups and government agencies.

French energy privatization to feed advisors

Financial advisors are certain winners from the forthcoming asset sales within the French energy sector. Investment bankers fees from EDF, of which the government is expected to sell up to 30 per cent, and GDF alone have been estimated at $152.6bn.

French trade unions remain hostile to any plans to partially privatize the industry, fearing job losses. Recent talks with ministers failed to reach any agreement and all five main trade unions are calling on electricity and gas workers to strike and demonstrate their opposition on October 3.

Enel agrees price for Milan grid

A joint statement from Enel and Milan’s gas and power company Aem Milano finally set out the terms of the long, drawn-out sale of the city’s electricity network by the Italian multi-utility. The price of €423.5m ($413m) was based on the figure set by an arbitration panel in March 2001.

The terms of the deal may yet change if state-controlled Enel is successful in fighting the ruling. Enel is claiming that the price does not reflect the true value of the asset, which it is being forced to divest under the country’s market liberalization laws.

Enel has named Giorgio de Panno as chief executive following the resignation of Luigi Giuffrida. De Panno comes from SNIA, where he has headed up the Chemicals and Energy sector of Caffaro SpA since 1998.

Boost for UK offshore wind

A proposal by National Wind Power for a 90 MW offshore wind farm in North Wales has been given the go-ahead by the government. The 30-turbine project will be the largest of its type in the UK and a consortium made up of Vestas, Celtic Wind Technology and Mayflower Energy have been awarded the $85m contract.

The foundations will be built by construction company Seacore using a jack-up platform in 12 m of water.

Plans for an 80 turbine onshore wind farm near Kielder Forest in Northumberland have been blocked by the Ministry of Defence.

British Energy shares suffer

Shares in nuclear power producer British Energy plunged 30 per cent after the company, which generates 20 per cent of Britain’s electricity, was forced to shut the second of two units at its Torness power plant due to vibration in the gas cooling system. Analysts estimated that the company loses £250 000 ($381 450) for each day that a 500 MW reactor is halted.

Rates of return have been under pressure from falling power prices and financial matters would be worse were it not for British Energy’s US business, which is expected to contribute over £200m of profits for 2003/04.

News digest

France: Duke Energy international has made its first entry into the French market by acquiring power generator Compagnie Thermique du Rouvray from Sechilienne-Sidec, which owns a 103 MW gas fired power plant near Rouen.

Germany: RWE has reported six-month net profits up 11 per cent to €818m ($800m) helped by a recovery in German electricity prices and cost cutting.

Germany: Siemens Power Transmission and Distribution and utility Stadtwerke Leipzig have set up a 50/50 joint venture to offer outsourcing of management of energy systems and services to the energy industry across Germany.

Germany: TXU has asked the European Commission to revisit its decision not to intervene in the merger between German power companies E.ON and Ruhrgas. The Commission says that the merger is a matter for the German competition authorities.

Greece: The Transmission and Distribution division of Austria’s VA Tech has been awarded a €7m contract by Public Power Corporation, the leading Greek energy supplier, to supply a 170 kV gas insulated switchgear substation for Athens as part of the infrastructure being put in place in preparation for the 2004 Olympic Games.

Norway: Statkraft SF has awarded the largest turbine upgrade contract in the company’s history to GE Hydro, a unit of GE Power Systems, for the refurbishment of five of its hydropower plants. The contract is worth $11.9m and covers 770 MW of capacity.

Spain: Iberdrola is increasing its stake to 50 per cent in the €600m Bahia de Bizkaia CCGT and regasification plant project by buying the 25 per cent owned by Repsol YPF. The plant is expected to be operational next year.

UK: US utility, Entergy Corporation is reported to want to sell its remaining UK power station, the 800 MW gas-fired Damhead Creek merchant plant in Kent. Sources pointed to the slump in UK wholesale power prices for the company’s decision.

UK: UK energy regulator Ofgem has published its first full review of the operation of the New Electricity Trading Arrangements, which have been operating for over a year. It concludes that it has met its objectives, lowered prices and been flexible enough to adapt and improve the position of smaller generators.

UK: Five former Enron directors have formed px Limited to operate and manage the £100m ($97.8m) Teeside gas processing plant and power station. A six-year contract was secured following talks with the assets owners and administrators PriceWaterhouseCoopers.