Thursday, April 17, 2008

The Economist and The Times on European Utilities. And: RWE to Spend $8-12 Billion on Carbon Allowances (RWE)

Yesterday we had "European Utilities: The Green Giants".
Today it's "Power plays" and RWE.
From The Economist:

More cross-border energy deals are in the pipeline
THE energy map of Europe seems likely to be redrawn again this summer. At the centre of all the manoeuvres is France's EDF, the biggest European energy group by stockmarket value, and Europe's leading nuclear generator—a great advantage in an industry facing future constraints on carbon-dioxide emissions. EDF's size and financial strength is all the greater because, with 85% of its shares held by the French government, it is immune to takeover. So it is free to flex its muscles all over the continent. Having been frustrated in the recent past in Italy, EDF has turned its attention to Spain and Britain to bolster its already dominant position...MORE

From the Times of London:
RWE joins forces with Vattenfall in battle for British Energy

The German power giant RWE has teamed up with Vattenfall, of Sweden, to bid for British Energy, The Times has learnt.

It is understood that the two companies are working together, although RWE would make any offer for the British group alone and then agree a side deal with Vattenfall to sell on certain sites. The move by RWE to team up with a third party is designed to satisfy the Government’s demands that the buyer of the British nuclear operator must ensure there is competition in the market.

The Government owns a 35 per cent stake in British Energy, whose eight nuclear and one coal-fired plants produce about one sixth of the UK’s electricity. It has made clear that it will oppose the emergence of a monopoly in new nuclear plants.

Vattenfall is Europe’s fifth-largest electricity generator. Revenues last year were 144 billion Swedish krona (£12.4 billion). The company, whose main operations are in Germany, Sweden and Poland, is keen to break into the British market....MORE

From Point Carbon:

RWE facing €5-7.5 billion cost to meet ETS phase two target
German utility RWE will have to spend €5-7.5 billion ($8-12 billion) to cover its expected shortfall in emissions allowances in the 2008-2012 period of the EU emissions trading scheme, according to Chief Executive Juergen Grossman, speaking at RWE’s annual general meeting today.

The estimated cost of buying extra allowances to cover its emissions during the second phase of the carbon trading scheme is additional to the 40 million tonnes of CO2 savings the company believes it can make over the 2008-2012 period.

Despite the emission reductions, RWE expects to face a 60 per cent shortage in emission allowances in the second trading period of the EU ETS, the company said recently.

“In the period from now until 2012 alone we are facing additional costs of €1 –1.5 billion annually. And even harsher measures are predicted for the year 2013 and beyond,” Grossman said.

“RWE supports the climate protection goals of the EU... (but) the repercussions of emissions trading on the European economy must remain manageable. Europe cannot afford an era of de-industrialisation.”>>>MORE