Vattenfall Pursues Renewable Strategies and Cleans Up Nuclear Communications

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Researched by Industrial Info Resources (Sugar Land, Texas)--Vattenfall AB (Stockholm, Sweden) is making strategic moves in the European power scene that mirrors the desire by a number of the regional power utility majors to be in a position to use critical market mass in an effective way in which inter-grid synergies and the development of renewable energy are common denominators. The company is also reinforcing the ability to monitor security concerns as it expands further into the nuclear power sector.

In order to drive a strategy aimed at clean electricity and the management of heavy investment programs, Vattenfall is forming a third pan-European business group covering wind, nuclear and engineering in all the countries in which it operates. This group will complement the current geographically based groups that cover the Nordic countries and Central Europe. The new group's brief will include European business development with the focus on efficient use of energy and biomass. Trading, with an eye on the development of cross-border opportunities, will be given greater emphasis, and new units will be formed for business development, technical development and asset management.

Following an announcement in 2008 that Vattenfall's vision involved climate neutrality by 2050, the company pursued an interest in carbon capture and storage (CCS) by joining the Oxycoal UK collaboration, which is dedicated to developing a clean technology suitable for full-scale plant application. The technology burns coal in a mixture of very pure oxygen and recycled gas to produce a gas rich in carbon dioxide that can be purified and compressed for transportation and storage. The Oxycoal UK project is led by Doosan Babcock Energy Limited (Renfrew, U.K.) and operated by a group of industrial sponsors and university partners. Vattenfall inaugurated an Oxyfuel plant at the Schwarze Pumpe power station (Spremberg, Germany) in 2008 and proposed plants in Denmark and Germany. The target is for the CCS technology to be commercially viable by 2020.

Identifying ocean energy is a large potential contributor to Vattenfall's "2050 climate vision." Vattenfall has acquired 51% of the Irish company Pandion with the ocean energy developer Wavebob (Maynoth, Ireland) holding the balance. Pandion has applied for sites on the west coast of Ireland that could lead to the commercial generation of 250 megawatts of power. As the company is technologically neutral, it will observe the development and optimization of the sector and the integration of power concepts. Ireland and the U.K. are seen as the likely choices for wave-energy development.

By taking advantage of opportunities opened up by current turbulence in the freight market, Vattenfall Trading Services (VTS) has launched VT Shipping (Copenhagen). At the end of 2008, the company acquired three barges and three tugs. The 15,000-ton-capacity barges will deliver hard-coal feeds to company plants and will be chartered to third parties. The vessels can also be used for shipping biomass and pellets. Routes will run in the Baltic Sea between Russia, Poland, Germany and Denmark.

VTS is the central trading platform for the group and a leading player in European wholesale energy trading. Located in Hamburg, Stockholm, Warsaw and Copenhagen, it trades in physical and financial electricity, carbon dioxide, renewable energy, gas oil, physical and financial coal and freight, currencies and aluminum. The company also handles portfolio and risk management across the group.

In mid-January the company presented Hans Blix as a new member of its Independent Nuclear Safety Council (INSC). Blix previously had been Sweden's foreign affairs minister and head of the International Atomic Energy Agency and United Nations inspector in Iraq. Vattenfall says that it will invest $2.1 billion to modernize and make power upgrades in nuclear plants.

Lars G. Joseffson, President and CEO of Vattenfall AB, stressed that trust is a requirement for the operation of nuclear power plants and that greater openness toward society was necessary to maintain that trust. Two incidents at the company's Brunsbuttel and Krummel nuclear power stations in Germany in 2007 have dogged Vattenfall and caused both plants to remain out of operation. At Brunsbuttel the shutdown was caused by a short-circuit in a switchgear leading to failures in the emergency cooling system. At the Krummel plant, a fire in a transformer outside the reactor building caused the shutdown. The incidents caused resignations. After struggling to find spares, the company has now developed a repair procedure and has a team of specialist welders to work on the power stations, which should both be back in operation this year. The Blix appointment to the INSC and the capacity to fix the problems should go a long way to clearing Vattenfall's nuclear communications with the German authorities.

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