Saudi Arabia's main sovereign wealth fund is considering buying a stake in ACWA Power, which operates power and water plants around the world.
Reuters reports that Public Investment Fund (PIF) already owns 13.7 per cent in Riyadh-based ACWA through a subsidiary but is now taking advice on upping that stake.
Talks are still at a preliminary stage, and neither party has appointed an advisor, two unnamed sources told the news agency.
ACWA is an investor, developer, co-owner and operator of a portfolio of plants in Europe, Asia and Africa that generate more than 23 GW of power and produce 2.5 million cubic metres of desalinated water a day.
PIF's investment strategy aims to help the government diversify the Saudi economy away from oil into power and other sectors.
Central to the plan is greater involvement by the private sector in the Saudi economy, including in the power sector: it has called on raising the percentage of power plant electricity generation through strategic partners to 100 per cent from 27 per cent currently.
UK Prime Minister Theresa May faces a test of the government’s attitude to overseas investment in critical infrastructure as Chinese companies are expressing interest in the prospect of ownership of National Grid’s gas network assets.
The company’s owners are aiming to sell it for about Â£11bn, according to the Financial Times.
John Pettigrew, chief executive of the UK power system operator, said that there would be safeguards to ensure security of supply regardless of who owns the business, which serves 11 million homes in regions including London, the West Midlands and north-west England.
“There are a large number of these businesses which are owned by US, European or Asian investors. The key is that whoever is successful will have the same obligations as National Grid for security and safety,” Mr Pettigrew said.
Phil Hewitt, director at energy analysts EnAppSys, told Power Engineering International that concerns about Chinese ownership were misplaced. "I think that there is no imminent threat to national security with Chinese infrastructure funds owning the gas network. There is a danger they may pay too much for it," he said.
Rival consortiums for the majority stake in National Grid include Chinese investors, according to knowledgeable sources who spoke to FT.
In September the government had launched a review of how such vital infrastructural deals are scrutinised.
China Investment Corporation, the country’s sovereign wealth fund, China Resources, a state-owned conglomerate, Fosun and Cheung Kong Infrastructure, are among the interested Chinese parties spread among international consortiums expressing interest.
CKI already holds a part share in some British power plants as it stands.
The UK government announced in September that it was looking at whether ministers needed stronger powers to intervene in the sale of critical infrastructure.
National Grid is selling its gas business because it has a lower growth rate than its core electricity transmission network. However, the assets produce reliable cash flows and generated Â£403m of operating profits in the first six months of this year.
The British CEO of German utility E.ON Climate and Renewables, says the EU and UK should work together to ensure Europe’s COP21 carbon reduction target is achieved, in spite of how the Brexit process unfolds.
Michael Lewis also told an energy conference in Paris that advanced utility-scale storage could become a reality ‘sooner than people think.’
The United Kingdom voted to leave the European Union in June of this year and the ramifications of that decision have caused a lot of confusion on both sides, a particularly unwelcome development to the energy sector, according to Lewis.
“The fundamental problem is the uncertainty it causes and we simply don’t know what the future relationship will be. We don’t know what the respective policies will be in relation to energy between the EU and UK so a cloud of uncertainty has descended and uncertainty in our bad business is a bad thing full stop.”
Mr Lewis said the present scenario obscured the ideal landscape for investment, one where clarity, consistency and long term perspective were in place, in terms of policy. However despite this he feels there will be enough appreciation on both sides of the need to facilitate achievement of Europe’s carbon reduction target.
“I think that it’s critically important when talking about policy frameworks where you have contiguous geographical entities and where there is flow of energy between the two that you have consistent policy. So it’s important that the UK continues to contribute to overall European energy policy.”
“The renewable energy resources there is in the UK that are extensive, are offshore and onshore wind and part of the overall European solution to reaching the COP21 target. It’s critical important that whatever comes out of it that we don’t see any kind of cleavage between UK policy and European policy.”
“The dream of 100 per cent renewables will be achievable at some point. We are not there yet, it’s very clear we can’t run the system on renewables. That’s why when we split E.ON into two companies one dealing with system security, Uniper, within centralised generation, which is very much about tackling that market and keeping the systems stable. Another company then E.ON is dealing with customers, new world and renewables those two will exist together for some time until there is a storage solution which can not only solve short terms frequency response issues, but long term seasonal issues as well.“
It’s coming but it’s a transition. Whether that transition takes 5, 20 or 20 years we don’t know – it depends how quickly storage technology develops but it’s happening very quickly and if the past is anything to go by the speed at which wind and solar adapted and became cheap, if that’s any guide it’ll have happen much quicker than people think.”
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Germany’s top power utility, E.ON, has announced a loss of $10.1bn (€9.3bn) for the first nine months of the year after booking an impairment charge of $6.6bn (€6.1bn) against fossil fuel power and energy trading unit Uniper.
The new company had been separated from its renewables business and floated independently in Germany last month.
In a trading statement issued on Wednesday, E.ON spelled out that Uniper’s share price has risen by more than 20 per cent since the spin-off as investors “see signs of recovery in the conventional energy world”. But, the German utility said, it has had to adjust the book value of Uniper to reflect its market capitalisation.
The company has preferred to highlight its adjusted figures to explain the $10.1bn loss, saying the net loss is “entirely attributable to Eon’s discontinued operations and is not cash-effective”.
Adjusting earnings before interest and taxes (Ebit) at E.ON’s “core” business is up 13 per cent year on year to €1.9bn, the company said. The core business refers to its energy networks, renewables business and customer solutions division.
Eon chose to spin off its conventional power assets in response to Germany’s Energiewende, a government policy shift towards renewable energy generation.
Despite the hefty net loss, E.ON has reaffirmed its full year forecast. It expects full year adjusted net income to be between $0.6bn and $1.1bn.
Johannes Teyssen, Eon’s chief executive, said: “To be successful, we need to be closer to our customers. We’re going to become leaner and more agile, which will enable us to successfully position ourselves, even in the face of keener competition. We’re going to give more decision-making authority to those employees who work closely with our customers.
The company’s cost-cutting strategy, project "Phoenix", intends to reduce costs by $437m, but there has been no recent statement on potential job losses. "Our goal is to secure the company's future in the long term, despite further fundamental changes," explained Teyssen.
The company also halved its renewable energy investment pipeline to 5 GW from 10 GW last year as changing regulation makes the outlook for large projects less certain, the head of E.ON's renewables unit said.
In summer of last year E.ON had a pipeline of 10 GW of projects, of which 60 per cent was in North America and 40 per cent in Europe, but the utility has scaled that back to 5 GW, of which 80 per cent is in the United States and 20 percent in Europe.
Michael Lewis, chief executive of E.ON Climate & Renewables (ECR), the renewables unit of the new E.ON after it split off fossil fuels into Uniper, told Reuters the pipeline numbers have come down since the firm is trying to focus on those projects which it believes have a good chance of coming to fruition.
"With the move towards a competitive tendering system across most countries, now only the best projects are going to win," Lewis said on the sidelines of the New York Times Energy for Tomorrow conference in Paris.
“If we perceive a need to move into new markets because growth opportunities are not there in our traditional markets then we will do that, but for the time being we do not see that," Lewis said.
If you are to take him at his word, instead of writing it down to bombast and political expediency aimed at winning votes, the election of Donald Trump as 45th President of the United States is not good news for renewable energy or the battle against climate change.
In a bid to make it harder for Trump to unravel the Global Climate Change Agreement signed up to by the world’s nations in Paris last year, ratification of the deal was accelerated into law before the identity of the new president emerged.
This pre-emptive measure might prove crucial in keeping the US commitment to tackling the problem. The alternative would represent a real blow and the fear for many is that he may feel he has a mandate to dismantle legislation that lent towards developing the renewables sector.
Mr Trump’s public utterances and written policy statements make for grim reading for green groups, but will be relished by the coal-fired power sector, if he remains true to his pronouncements and is not prevented from seeing the word become the action.
At Pittsburgh in September he vowed to ‘eliminate’ the Obama-Clinton climate action plan and clean power plan.
In his ‘America First’ Energy Plan document he states, “President Obama has done everything he can to kill the coal industry. Draconian climate rules that if not stopped, would effectively bypass congress to impose job killing cap and trade.”
Again all this is contingent on what Trump says he will deliver in public but he may be more open to compromise in private. His bottom line across the board is to restore jobs at whatever cost.
It’s good news for those who want clean coal-fired power to be promoted. At a recent rally he said, “I want clean coal and we’re going to have clean coal and plenty of it.
“As a result of Obama EPA actions coal-fired power plants across Michigan have either shut down entirely or undergone expensive conversions. The Obama-Clinton war on coal has cost 50,000 jobs.”
“We’re going to save the coal industry from Hillary Clinton’s extremist agenda.”
The focus on jobs, it’s fair to say, does not take into account a holistic view of what’s important for the planet in general. The scientific community is pretty much united in the need to address climate change and the world appeared to be responding, with more and more attention being paid to renewable energies and the grand project of storage development.
When Trump states in his energy plan in May, “We’re going to stop all payments of US tax dollars to UN global warming programmes,” at least you know, with his uncompromising language, where he stands.
He doesn’t go along with the scientific consensus and while he has every right to question it, it would be interesting to know who his advisers are on these grave matters. If they are credible scientific authorities we should hear from them too. What’s sometimes forgotten is that the president is to some degree the figurehead of an entire governmental apparatus and administration – it wouldn’t surely rest on the whims and biases of Trump in the face of expert proof.
An interview on the Hugh Hewitt talk show last year gives an insight into how he thinks about the climate change agenda and what would happen if he is left unchallenged.
“I’m not a believer in global warming,” he said. “And I’m not a believer in man-made global warming. It could be warming, and it’s going to start to cool at some point. In the early 1920s people talked about global cooling. I don’t know if you knew that or not. They thought the Earth was cooling. Now its global warming.”
EU chiefs Donald Tusk and Jean-Claude Juncker mentioned the need to work with the US on climate change twice in their letter of congratulations to the new president earlier today.
Just as well as Trump has already explicitly stated, “We’re going to cancel the Paris Climate Agreement.”
Instinct suggests that while Trump might have more difficulty in withdrawing from that international agreement, reversals on home soil of any legislation he deems to be contrary to his job creation agenda appear more likely.
The clean energy law, which should perhaps be looked upon as a vehicle of job creation, might not survive.
Again a recent speech is instructive.
“Any regulation that is outdated, unnecessary, bad for workers or contrary to the national interest will be scrapped. We will also eliminate duplication, provide regulatory uncertainty and trust local officials and residents,” he says.
It would be a huge rolling back of Obama’s clean energy legacy, but for many, particularly on the Republican side, it would be viewed as a pragmatic solution.
On renewables Trump characteristically pulls no punches.
“Now look I’m a great believer in all forms of energy but we’re putting a lot of people out of work. Our energy policies are a disaster. Our country is losing so much in terms of energy, in terms of paying off our debt. You can’t do what you’re looking to do with $20trn in debt.”
Only time will tell what impact the Trump presidency will mean for the US and beyond, but it looks odds on to be a different landscape than what might have been envisaged had Clinton succeeded.
Dong Energy plans to sharpen its focus on wind energy and plans to offload the rest of its oil and gas business. It has hired JP Morgan to help with the business of selling this arm of its business.
Similar moves have already been made by RWE and E.ON.
"We want to get to the right transaction, that obviously provides value to shareholders and provides the oil and gas business with the right long term opportunities," Chief Executive Henrik Poulsen told Reuters.
"We are still in a very early stage of exploring market interest, but it is our impression that there is interest in an asset of this kind," he said, adding the company had not set a deadline for selling the business.
Dong Energy, the world's biggest operator of offshore wind power, listed in Copenhagen in June, marketing itself as a renewable energy play rather than an oil and gas company.
Analysts at Sydbank said Dong's oil and gas assets could be worth up to Â£2bn.
APR Energy has won a project for a fast-track dual-fuel power plant in Benin.
The deal is a 12-month contract with Benin’s Ministry of Energy, Water and Mines for a 50 MW plant running on APR’s fuel-flexible aeroderivative turbines. The turbines will be fuelled by natural gas with the ability to switch to diesel if needed.
The project is expected to come online in December and APR chairman John Campion said it would help Benin “in its effort to become self-reliant when it comes to power generation”.
Campion explained: “Benin currently imports a significant portion of its electricity from neighboring Ghana, Ivory Coast and Nigeria, and this project will allow Benin to grow its economy using domestically-produced power.”
He said another economic benefit would “come from the fact that most of the employees who will install, operate and maintain our power plant will be hired and trained from the local workforce”.
Once the Benin project is complete, APR Energy will have installed more than 1000 MW of generating capacity in 11 African countries since 2008.
“As a partner in the US government’s Power Africa initiative, we are proud to be playing a significant role in bringing electricity to the people and businesses of Sub-Saharan Africa,” said Campion.
GE Power Services is to overhaul the steam turbines and generators at four thermal power plants in Chile.
The first of the nine turbine-generator projects is already underway at the 264 MW Nueva Tocopilla gas-fired plant in the Antofagasta region.
GE’s multi-year contract is with power company AES Gener, which operates a total of 4 GW of installed capacity in Chile, comprising thermal, hydroelectric and solar plants.
AES Gener chief executive Javier Giorgio said it was vital to “keep reliable maintenance procedures for our thermal power plants to help address the country’s energy demands”. Chile’s electricity demand is increasing at about 3.5 per cent annually.
Ramon Paramio, general manager of GE’s Power Services in Latin America, said: “While part of Chile’s additional generation capacity will come from increased renewable energy production, the nation’s utilities also are making significant investments to increase the output and efficiency of their existing thermal power stations to help meet the country’s growing demands for cleaner, more affordable electricity.”
Of the nine steam turbines involved in the contract, only one is from GE – the remainder are from other manufacturers.
Solar energy developer Phanes Group has acquired and will co-develop three 100 MW grid-connected solar PV plants in Nigeria.
The ground-mounted projects will significantly increase Nigeria’s current solar capacity and are intended to help the Nigerian government meet its target of generating 2000 MW of power from renewables by 2020.
The projects are in three different locations – Kaduna, Kebbi and Sokoto. The first 50 MW of the Sokoto project is intended to be grid-connected as early as the first quarter of 2018, with the project due for completion by the end of that year.
The Kebbi and Kaduna projects are due for completion before the end of 2019.
Martin Haupts, chief executive of Dubai-headquartered Phanes Group, said: “Nigeria’s policymakers have worked proactively to address the nation’s immediate and long term electrification challenges through the introduction of attractive clean energy policies, and we are beginning to see the fruits of those policies.”
He added that “despite its challenges, Nigeria’s potential for solar development is unquestionable and from a standing start it may soon emerge as solar leader among its sub-Saharan African peers”.