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E.ON chief open to nuclear ‘bad bank’ idea

December 8th, 2014

The chief executive of E.ON says the German utility is not opposed to the possibility of a public foundation being formed for the purposes of funding the decommissioning of the country’s nuclear power plants.

"If the government came to this conclusion tomorrow ... we wouldn't refuse to enter such a discussion," E.ON's Johannes Teyssen told Der Spiegel in an interview published on Sunday. "But so far we haven't received an invitation."

Discussions have been taking place on the subject of a ‘bad bank’ for nuclear decommissioning since Q1 of this year.

The German government has set a 2022 deadline for decommissioning of all the country’s nuclear power plants and its four nuclear operators in Germany -- E.ON, RWE, EnBW and Sweden's Vattenfall -- have made provisions of about 36 billion euros ($44bn) for plant decommissioning and disposal of nuclear waste.

Germany reveals energy efficiency action plan

December 5th, 2014

A new National Plan of Action for Energy Efficiency (NAPE) has been unveiled by the German cabinet for the current legislative period. Reaffirming the goal of reducing energy use by 20% by 2020 and by 50% by 2050 - compared with 2008 levels - the plan aims to create energy savings in industry, commerce and private households by focusing on supporting innovative ways of saving energy as well as business models for new products and solutions.

NAPE is based on three pillars: advancing energy efficiency in buildings, establishing energy efficiency as an investment and business model, and increasing self-responsibility for energy efficiency.

Commenting, Henning Ellermann, energy efficiency market expert at Germany Trade & Invest, said the decision is ‘fantastic news for companies in the energy efficiency sector’. Ellermann added: ‘The German government is sending a clear message that energy efficiency is not only central to the country’s ambitious energy transition but also that energy efficiency represents a lucrative and dynamic industry it is keen to see develop.’

Among a number of measures to be pursued in the current legislative period is a new competitive tendering model that aims to support energy efficiency projects that generate the greatest energy savings for the lowest cost. Financial support and tax reductions for energy efficient building refurbishments are also to be pursued pending talks with the federal states, scheduled to conclude in February 2015.

Finnish parliament approves Russian-supplied nuclear plant

December 5th, 2014

The parliament of Finland has backed a plan to allow Russia-state owned Rosatom to build a $7.4bn, 1200 MW nuclear power plant.

The Russian operator is to arrange financing and supply of the Fennovoima nuclear reactor and fuel for the project, which has caused tensions, due to the ongoing rift between Russia and Europe. 115 deputies voted for the plant to go ahead with 74 opposed.
Finnish flag
Referring to the decision to go against Europe’s present position with Russia at the moment, centre-right economy minister Jan Vapaavuori told Reuters, “It is clear that this is not the best time for this decision from the international politics point of view. But we must make decisions when the issues come to our table."

He added the project would not violate EU sanctions against Russia.

The project originally won backing in 2010 but several investors dropped out and changes in the planned reactor's size and supplier prompted the latest approval process.

Finns are hoping the addition of the plant will boost power output and an economy set to contract for a third consecutive year.


Vattenfall chief eager to sell German lignite plants

December 5th, 2014

The chief executive of Swedish utility Vattenfall has reiterated his company’s desire to offload its lignite power plants in the Lusatia region of Germany.

Group CEO Magnus Hall told a press call in Stockholm on Friday that he wants to get rid of its lignite mines and coal-fired power plants in the Lausitz as soon as possible.
Magnus Hall
"We have no exact timetable, but we have said we will try to do it as soon as possible." Hall said. He has held talks with the Prime Minister of Brandenburg and Saxony, Dietmar Woidke (SPD) and Stanislaw Tillich (CDU), on the subject.

Mr Hall did not comment on whether the company had a buyer in mind, but said there would be a responsibility to look for one with a good record towards employees and the environment.

Vattenfall operates the second largest coal mining area of Germany and currently has five mines in Brandenburg and Saxony as well as several power plants. Around 8,000 people are employed in the Lusatian lignite industry.


Areva CEO Luc Oursel dies

December 4th, 2014

Luc Oursel, CEO of French nuclear firm Areva, has died at age 55. He had been on leave since October due to an unspecified illness.

“We have learned with great sadness of the passing of Luc Oursel, President and CEO of Areva,” the firm said in a statement. "We wish to thank him for his tireless work for the development of Areva's business, in service to his country.”

French Prime Minister Manuel Valls said in a statement that Oursel “was committed to the success of his company and to the success of France”.

Oursel took over the top job at Areva in 2011 with a mandate to fix its mounting debt problems. Since then the firm’s situation has worsened due to nuclear shutdowns in Germany and Japan, Europe’s economic crisis, the US shale gas boom and repeated delays at the Olkiluoto 3 nuclear plant in Finland, which Areva is building in a consortium with Siemens.

Oursel’s efforts included job cuts, reduced investment, asset sales and a writedown of Areva's concentrating solar power (CSP) business, but the firm remains troubled. In November credit ratings agency Standard & Poor’s downgraded its standing to “uninvestable”, and this week COO Philippe Noche, who is acting CEO, announced that “all options” are now on the table, including recapitalization. The firm posted a loss of €494m in 2013.

Oursel had an engineering degree and served in France's industry ministry before entering the private sector in 1993. He joined Areva in 2007.

Fortum expands influence in Russian hydro sector

December 3rd, 2014

Fortum has signed an agreement with Rosatom and Gazprom to take over the two latter company’s hydroelectric power facilities in north western Russia.

The deal will give Fortum ownership over all of TGC-1’s hydropower assets in Murmansk Oblast, the Republic of Karelia and Leningrad Oblast. In addition, the Finnish company will take over a 15 per cent stake in the Fennovoima nuclear power project.
Hydroelectric power
The takeover of the Russian assets will boost Fortum’s hydropower portfolio by 60 per cent, according to a press release by the company.

In return, Gazprom and its subsidiary Gazprom Energy Holding will take over all of TGC-1’s thermal power capacities. The Territorial Generating Company No 1 (TGC-1) is one of the biggest electric power producers in Northwest Russia and has until now been owned by Gazprom (51.8 per cent) and Fortum (29.5 per cent).

The swop also includes the inclusion of Rosatom, Russia’s state nuclear power corporation, with a 25 per cent stake in a new joint venture with Fortum. Fortum takes the remaining 75 per cent of the new company, according to Yle.

The TGC-1 owns and operates a fleet of 40 hydro power plants with a total capacity of about 3000 MW, and hydro power generation accounts for 41 per cent (12-13 TWh) of the company’s total electricity generation. In addition, the company owns 14 thermal plants with a total electricity capacity of 4300 MW and has a total heat capacity of 16500 MW.

Finance secured for $1bn gas-fired plant in Turkey

December 3rd, 2014

A 950 MW combined-cycle gas turbine (CCGT) power plant is to be built in Anatolia, Turkey after a combination of financial institutions formed a syndicate to finance the project.

The $1bn in funding is destined for a gas-fired power plant which will be built by the Turkish subsidiary of Saudi ArabiaTurkish flagn ACWA Powe near the city of Kirikkale in Central Anatolia.

The project is expected to help reduce 1.8 million tonnes of carbon emissions.

Nandita Parshad, Director for Power and Energy at the European Bank for Reconstruction and Development (EBRD), which helped arrange some of the financing said: “This is a landmark transaction for many reasons: it brings together international financial institutions and commercial banks to lend on similar terms; it offers the longest tenor to date – 16 years – for a power project in Turkey;

It is also the first time in Turkey that an independent power producer is financed on a limited-recourse basis.”

UK close to deal on guarantee for Europe’s largest nuclear project

December 3rd, 2014

Britain’s Chancellor of the Exchequer George Osborne has announced that a preliminary deal has been made to provide a financial guarantee to help fund the development of Europe's largest nuclear power project.

The 3.4 GW Moorside project could provide nearly 7 per cent of the UK's projected electricity needs and create up to 21,000 jobs, when built.
"The Guarantee Scheme is another way in which we can help companies to make the huge investment that building new nuclear power involves," Finance Minister George Osborne said in a statement.

The announcement will be welcomed by Moorside’s NuGen joint venture partners, Toshiba and GDF Suez.

The scheme, which was introduced in 2012, is set to help the developers to gain external project finance to cover the upfront costs of building a nuclear plant.

NuGen said it plans to make a final investment decision for the Moorside project in 2018.

E.ON splits in response to changing energy market conditions

December 2nd, 2014

German utility E.ON has announced that it will split in two in response to a changing energy market.  

In its new corporate strategy announced this week, the firm will spin off its nuclear and fossil fuel power generation, energy trading and exploration and production activities into a new company in order to focus on renewables, distribution networks and energy efficiency services. The split is expected to be completed in 2016.

According to a statement by CEO Johannes Teyssen, the radical move comes because “E.ON’s existing broad business model can no longer properly address” the challenges of “dramatically altered global energy markets, technical innovation, and more diverse customer expectations”.

Germany’s power sector has been hit hard by the country’s decision to boost renewables at the expense of fossil fuel-based generation and to shut down its nuclear plants. Teyssen said other utilities would need to follow suit. “We are the first to resolutely draw the conclusion from the change of the energy world,” he said today. “We’re convinced that energy companies will have to focus on one of the two energy worlds if they want to be successful.”

Indeed, market analysts seemed to approve of the move, and the firm’s shares rose by 5 per cent in today’s trading. German economy minister Sigmar Gabriel also endorsed the strategy, calling E.ON “the first company to confront the consequences of a fully changed world of energy”.

While some commentators have questioned the new company’s potential viability, Teyssen said E.ON is optimistic about its prospects and that it will be financially strong enough to cover the costs involved in shutting down its nuclear plants.

In 2013 E.ON’s renewables business pulled in 54 per cent of its total €9.32bn ($7.4bn) profits, while its power generation, upstream and trading activities netted around 35 per cent. For 2014, E.ON said it expects to post a substantial net loss.

The firm has been selling off its power assets, with its Spanish business the latest to go.

France announces tidal tender winners as Siemens exits sector

December 2nd, 2014

French Prime Minister Manuel Valls has announced the winners of a tender for pilot tidal energy farms in the country’s West Normandy region.

The two winning projects are a 17 MW array featuring OpenHydro tidal turbines, to be built by a consortium including EDF and French naval defence and energy firm DCNS, and an 8.4 MW array using six 1.4 MW turbines from Alstom, to be built in collaboration with GDF Suez. Both projects will be located in the Cotentin region, which boasts a sizeable tidal resource.

Sian George, CEO of trade association Ocean Energy Europe, commented: “Following the Meygen project in Scotland reaching financial close, today’s announcement is further proof that Europe continues to move forward in creating an ocean energy industry. The challenges involved are not insignificant, but France is demonstrating leadership by providing support for the sector to demonstrate pilot arrays. We look forward to seeing other [EU] Member States following France’s lead.”

The announcement comes on the heels of Siemens’ decision to leave the tidal energy sector with the sale of its subsidiary Marine Current Turbines (MCT), which it has owned since 2012. Siemens said the sector’s market and supply chain development have taken longer than expected, and while it believes the industry will develop in future, for now its “limited resources” make it a non-viable niche market.

In August Bloomberg New Energy Finance revised its 2020 capacity forecast for the tidal power sector downward by 11 per cent, to 148 MW. The analysis firm echoed Siemens’ concerns, citing the unexpectedly long development period for tidal technologies and greater-than-anticipated costs.

In other European tidal energy news this week, Spanish firm Magallanes Renovables (MRSL) deployed its $1.2m prototype floating turbine in sea trials at the European Marine Energy Centre (EMEC) in Scotland, while UK energy secretary Ed Davey called tidal energy “a huge opportunity for Britain” and announced plans for a “world first” £850m ($1330m) tidal lagoon energy project.

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