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E.ON in Italian hydro asset sale

August 7th, 2015

E.ON is to sell its Italian hydropower complex to renewable energy firm ERG Power Generation for an undisclosed amount, the company has announced.

The 527 MW Terni Hydroelectric Complex, which consists of 16 power plants, seven dams, three reservoirs and a pumping station, extends over four Italian provinces and generates around 1.4 TWh per year.

The transaction is expected to close before the end of the year.

In July E.ON completed the sale of its coal-fired, gas-fired and solar power assets in Italy to Czech utility EPH in order to focus on its power and gas sales business in the country, which supplies around 700,000 customers. The company said in a statement that it also plans to focus on expanding its distributed energy business in Italy going forward.

Enel to invest $5 bn in Latin American renewables projects

August 3rd, 2015

Enel Green Power, through its subsidiary in Latin America, has given details of its strategic growth plan for the next five years.

The company said it is considering investing a total of $5.1 billion in renewable energy projects in Latin America.

This budget is compared with the capex of $9.6 billion that the company has in place for investment in Latin America in conventional energy for the same period, although this figure includes investment in growth and maintenance.

In Chile, Enel Green Power has projects totaling 598 MW, making the country its second largest market after Brazil with 837 MW.

E.ON and FCE to build MW-scale fuel cell CHP plant in Germany

August 3rd, 2015

An agreement has been put in place to build Europe’s first commercial MW-scale fuel cell power plant.

FuelCell Energy Solutions (FCES), the European subsidiary of US-based FuelCell Energy, and Germany’s E.ON Connecting Energies will collaborate on the 1.4 MW plant at non-corroding materials manufacturer Friatec’s headquarters and production facility in Mannheim, Germany (pictured). E.ON will own the plant, and FCES will install, operate and maintain it under a long-term service agreement, the companies said in a statement.

The combined heat and power (CHP) plant is expected to meet around 60 per cent of the power needs for Friatec’s manufacturing operations, while its heat will be supplied to the existing on-site heating grid, to be used at multiple production areas within the facility.

"Our production processes require a large amount of power and heat, so we are very happy to have the opportunity to utilize fuel cells to generate these necessities as efficiently and as cleanly as possible to advance our environmentally-friendly production processes," said Klaus Wolf, Friatec’s CEO.

The project is to be undertaken under a larger project development agreement between E.ON Connecting Energies and FuelCell Energy. The agreement targets CHP applications for large-scale industrial users that require continuous power under a utility ownership model, the companies said.

EDF announces £1.3bn worth of contracts for Hinkley Point C

July 31st, 2015

EDF has announced a number of contracts for the development of the Hinkley Point C nuclear power project in southwest England.

The announcements are indicative of confidence that final negotiations on the plant’s construction have been worked out between the French company and its partners.

The firms named include engineering giants Balfour Beatty, Doosan Babcock, Laing O'Rourke and Weir, as well as Turner & Townsend and Jacobs.

EDF had already announced four main preferred bidders for engineering and construction, including Paris-based Areva, Alstom and BouyguesTP.

It is now estimated that more than 60 per cent of the construction cost will be placed with UK firms, 3 per cent more than an initial estimate.

A final investment decision (FID) is expected in the coming months, after which the contracts will be signed. There is speculation that the Chinese premier’s state visit to the UK in the autumn will seal that milestone.

Hinkley Point C will cost around £14 billion to build at present costs, rising to £24 billion by the time it is finished, and interest payments have been added. The first electricity is expected to be generated in 2023.

EDF chief executive Jean Bernard Levy said good progress is being made in discussion with the British Government and the firm's Chinese partners. Things are moving "very quickly" towards a final investment decision.

EDF Energy chief executive Vincent de Rivaz said: "Hinkley Point C will be at the forefront of the revitalisation of the UK's industrial and skills base, and we have worked hard to build a robust supply chain to support new nuclear in the UK. The project will boost industrial stamina in the UK and kick-start the new nuclear programme. Experience gained at Hinkley Point will help firms be successful in nuclear projects around the world."Hinkley Point C graphic

The Balfour Beatty Bailey (Joint Venture) comprises oBalfour Beatty and NG Bailey, who will provide electrical cabling and equipment installation. Cavendish Boccard Nuclear (Joint Venture) will perform mechanical pipework and equipment installation.

ACTAN (Joint Venture) comprising of Doosan Babcock with Axima Concept and Tunzini Nucleaire, are charged with heating, ventilation and air conditioning works.

Laing O'Rourke will construct workers' campus accommodation while ABB UK will handle power transmission.

Scottish firms, Weir, are to provide large pumps for cooling water while Clyde Union, will provide the main pumps for feedwater and cooling water systems.

KBR and Jacobs Engineering are involved in the facility’s project management of site operations and equipment contract management, and building and civil work respectively.

Turner and Townsend will provide the site’s project controls and project management, plus NEC contract management services and Mace is in charge of contract management services.

Phil Whitehurst, GMB national officer for construction, added: "We now have a positive piece of the jigsaw concerning the construction of Hinkley Point C in place, which promises 25,000 job opportunities, 1,000 apprenticeships and 60% of the construction cost going to UK companies.

"But sadly there are still pieces of the jigsaw missing. The future of the project still hangs in the balance of an agreement between EDF, its investors, and the Conservative Government to secure the FID."

Balfour Beatty said its joint venture with NG Bailey, the UK's largest independent services and engineering company, was worth £460m and will create 1,000 jobs.

The joint venture will deliver the infrastructure that will power the station and its operations, including the design and installation of about 76,000 cables totalling over 3,000km (1,864 miles) in length; over 180km (112 miles) of cable containment support systems; fire and environmental sealing; design and installation of earthing systems, and specialist packages associated with data acquisition and plant control.

Leo Quinn, Balfour Beatty's group chief executive, said: "The new nuclear programme demands a scale of resources and expertise that only the most capable and trusted partners can deliver.

Prospect, the trade union representing more than 21,000 members working in the energy sector, has welcomed the announcement but with the proviso that the sectors skills challenge needs to be met.

Prospect deputy general secretary Garry Graham said: “Our members have consistently made the case for the need to invest in low-carbon baseload generation in the UK.

“Nuclear generation is a key component in that and today’s (Friday) announcement is good news for consumers, businesses and the UK as a whole. Building Hinkley C will provide 25,000 skilled and quality jobs and provide for 7 per cent of the UK’s low-carbon energy needs for decades to come.
Hinkley Point C nuclear power plant
“These contracts pave the way for the final investment decision for Hinkley C which we hope to see agreed shortly. Tangible progress will also provide the momentum for the development of new nuclear generating capacity by Horizon and NuGen at Wylfa and Moorside, providing major UK employment opportunities.

“But the skills challenge we face cannot be underestimated, especially given the potential convergence of competing major infrastructure projects.

“We need to ensure we have the capacity and capability to prove the UK not only ‘has nuclear, but does nuclear’ and can be a world leader in the development and delivery of safe low-carbon nuclear power.”

Turner & Townsend is one such company looking to build on its nuclear sector expertise, with CEO Vincent Clancy, stating,Having pioneered the use of project controls in collaborative environments on some of the UK’s most prestigious major programmes, including Crossrail and Heathrow, our project controls capability is best in class.  Once the final investment decision is made, our ability to set-up quickly and drive collaboration across the supply chain will be crucial on a programme of the scale, complexity and ambition of Hinkley Point C.”


German onshore wind growth slows

July 30th, 2015

Germany has installed about one-third less onshore wind power capacity so far this year than during the same period in 2014, new analysis shows.

At 1093 MW, Germany’s onshore wind installations over the past six months have failed to beat last year’s record-breaking 1569 MW with a 34 per cent drop, the figures show. However, although it said the sector was “taking a breather”, the German Engineering Association (VDMA) noted that this year’s numbers still represent the country’s second-best period in its wind power history.

The VDMA said it expects a strong second half of the year, estimating that 2015 will end with an annual net increase of 4 GW-4.5 GW, and a total onshore wind capacity of at least 42 GW. If this prediction plays out, the group said, Germany’s climate goals will be “achievable”.

“With its strong domestic market and an export quota of up to 60 per cent, the German wind industry is healthy,” said Matthias Zelinger, VDMA Power Systems managing director, emphasizing that “the world market of 50,000 MW in 2014 is growing at an annual rate of 5 per cent. The wind turbines manufactured in Germany make a fifth of the installed capacity throughout the world in 2015.”

Hermann Albers, president of the German Wind Energy Association, sounded an encouraging note, saying: “The transformation in the electricity market is forging ahead. Cost-efficient wind energy still has great resources. Like the further expansion of bioenergy and solar energy, it is essential if we are to achieve the goals of the shift to renewable energy usage.”

But the VDMA warned that Germany’s wind sector is subject to a “boom-and-bust” market situation and growing investor uncertainty as new regulations are set to come into effect in early 2016. The German Wind Energy Association is particularly nervous about the scheduled degression in subsidies built into the Renewable Energy Sources Act (EEG), and about an expected drop in investor confidence due to new rules for non-remuneration in the event of long-lasting negative electricity prices.

Zelinger warned that a stable policy framework is crucial for future onshore wind power development, saying: “The expansion of land-based wind energy must develop equably in Germany in the future, because the wind turbine manufacturers and their whole supply chain are burdened by the continuous alternation between phases of investment restraint caused by uncertain future framework conditions and phases where there is a clearance sale atmosphere caused by anticipatory effects.”

Details emerge on Areva-EDF deal

July 30th, 2015

Areva has agreed to sell a majority stake of its nuclear reactor business to EDF.

The company also plans a capital increase next year to fund its remaining uranium mining and fuel treatment operations.

75 per cent of the Areva NP unit is to be sold to EDF for EUR2bn ($2.2bn) to help meet EUR7bn in financing needs by 2017, it said in a statement on Thursday.
Philippe Knoche
It will also dispose of another EUR400m of assets, cut spending and improve cash management.

EDF, Areva NP, and their subsidiaries “will be completely immunized against any risks related to the Olkiluoto 3 project,” EDF said in a statement on Thursday.

Areva Chief Executive Officer Philippe Knoche said, “The agreements found with EDF represent very significant progress.”

The way is now clear for a bailout of Areva by the French government which already owns 87 per cent of the company along with 84 per cent of EDF.


RWE acquires Slovakian firm

July 30th, 2015

Germany’s second largest utility, RWE, has been cleared to take over Slovakian firm VSE.RWE

The European Commission said Wednesday it has approved the acquisition of VSE under the EU Merger Regulation.

RWE is active throughout the energy value chain while VSE is active in the retail supply and distribution of electricity in Slovakia.

RTT reports that the Commission concluded that the proposed acquisition would not raise competition concerns because of the limited overlaps and the presence of other strong players on all markets.


China’s power consumption and thermal power investment on the rise

July 29th, 2015

China's power consumption rose 1.3 per cent in the first half of 2015 when compared to the same period for last year while figures also show investment in thermal power infrastructure rose 14.9 per cent.

That’s according to data from China Electricity Council provided to Industrial Info market intelligence, who also provided information on the country’s new installed power capacity for the year to date.
China flag
This growth rate compares with 5.4 per cent in the first half of 2014.

New installed power capacity totalled 43.38 GW including over 5 GW in hydropower and 23.43 GW in thermal (coal and gas-fired) power.

The installed capacity of power equipment in plants with capacity more than 6 MW reached 1,359.51 GW, an increase of 8.7 per cent. Installed hydroelectric power capacity reached 268.13 GW, an increase of 5.7 per cent; thermal power reached 935.01 GW, an increase of 6.4 per cent; nuclear power reached 22.14 GW, an increase of 24.5 per cent; and wind power reached 104.91 GW, an increase of 26.8 per cent.

China's investment in power generation construction totalled $21.3bn in the first half of the year, an increase of 7.6 per cent, with hydropower infrastructure investment of $4.45 billion, a drop of 17.2 per cent; thermal power reaching $6.53bn, an increase of 14.1 per cent; nuclear power totalled $3.27bn, a drop of 14.9 per cent; and wind power reached $6.4 billion, an increase of 43.7 per cent. Spending in hydropower, nuclear power and wind power accounted for 69.4 per cent of the total investment in power generation.

Finally in the first half of 2015, China invested $26.39bn in grid construction, a drop of 0.8 per cent.

Endesa outlines Latin American gas-fired and hydro power plant ambitions

July 29th, 2015

Endesa Chile has unveiled a plan to develop 36 projects, amounting to 6300 MW of power in Brazil, Chile, Peru and Colombia.

The board of directors are looking at gas-fired power and hydroelectric power, in particular, for the bulk of the new capacity.
Endesa sign
The company is planning to build 23 projects, with a total capacity of 3000MW, in Chile; 64 per cent of them hydro-based and 36 per cent natural gas-based.

Meanwhile projects planned to be developed in Peru, Colombia and Brazil will have a generation capacity of 3300 MW; 40 per cent of which will be hydro, 55 per cent gas and 5 per cent coal.

Over the next five years, the company plans to develop 3100 MW of power projects in Peru, Colombia and Brazil and 2,200MW of projects in Chile.

Endesa said in a statement: "Each new project will be approached with a methodology called Strategic Plan of Sustainable Development that includes propositions like early engagement with communities, permanent relationship with them and the implementation of creating shared value (CSV) plans in areas where the company is planning to locate projects.

Ansaldo Energia set to capitalise thanks to GE-Alstom concession

July 28th, 2015

Italian power engineering firm Ansaldo Energia is emerging as a potential beneficiary of EU competition law after GE, according to insiders, offered to sell gas-turbine assets to it in an attempt to win approval for its plan to buy most of Alstom SA’s energy business.

Four people familiar with the situation have told Bloomberg news agency that GE has told the EU it is willing to offload some of Alstom’s sale and servicing activities, as well as some intellectual property to Ansaldo Energia SpA.
Ansaldo Energia
Ansaldo is in line to gain access to Alstom’s installed base of large and very large turbines, client list and its profitable servicing business, according to the unnamed sources As part of GE’s offer to the EU, Ansaldo could also buy Alstom’s Power Systems Manufacturing unit which can service gas turbines of different makes, they said.

GE offered to give Ansaldo access to Alstom’s installed base -- turbines that have already been sold and for which the French manufacturer holds a long-term servicing agreement -- but the concessions don’t include the entire European fleet, one of the people said. Representatives for the commission, GE, Alstom and Ansaldo declined to comment.

Shanghai Electric Group Co. agreed last year to pay 400 million euros for a 40 per cent stake in Ansaldo.

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