European Energy Projects Hit $54.4 Billion in a Week – and Counting

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Researched by Industrial Info Resources (Sugar land, Texas). Europe is holding its own in the global spate of energy sector investments that are being announced as 2006 draws to a close. A sample of announcements made in the second week of December shows three companies planning projects worth $54.5 billion through 2011. These projects cover power generation and transmission, renewable energy and the gas sector.

The major German power utility E.ON (NYSE:EON) (Dusseldorf, Germany) is planning to invest $33.5 billion to build and expand power plants and electricity and gas networks through 2009. Close to $15.1 billion of the total invested will be used to modernize existing power plants and construct greenfield power projects. The modernization and expansion of power networks, with the emphasis on Germany, will receive $7.6 billion and $5.3 billion will be invested in the maintenance and expansion of gas pipelines and other infrastructure.

Currently, construction of a 800-megawatt (MW) combined cycle gas turbine plant is underway in Italy and on a 1,100 MW coal-fired plant in the Netherlands. Several coal and gas-fired plants are being built in Eastern Europe. The United Kingdom will see a 1,200 MW gas-fired plant and a 1,600 MW ‘clean’ coal-fired plant. Other power plant expansions and new gas-fired combined heat-and – power plants are planned. Offshore wind power projects are being undertaken in Germany, United Kingdom and Northern Europe plus a biomass project in Scotland and the Trimble County 2 coal-fired power plant project in the U.S. For related news item see E.ON $1.96 Billion Super Critical Clean Coal Project in United Kingdom.

In the corporate expansion area E.ON has repeated that it will ‘systematically’ pursue the acquisition of Spain’s largest electrical power utility Endesa (NYSE:ELE) (Madrid, Spain). The company is currently pressing a $49.2 billion bid against resistance to the takeover from the Spanish government. Approximately $3.8 billion has been budgeted for the acquisition of shareholdings in other companies led by plan to take a minority stake in the Russian Yuzhno Russkoye gas field.

Italy’s Eni SpA (NYSE:E ) (Rome, Italy) has a $13 billion investment plan through 2011 to expand it gas sector activity. The total includes $1.3 billion for an LNG regasification terminal somewhere on the Adriatic Sea coastline. According to documents filed with the government, the terminal will have a capacity of 8 billion cubic meters per annum and will be sited 15 to 30 kilometers offshore. Eni is currently engaged in the La Spezia terminal project. Terminal construction activity will increase as Italy seeks to cut its gas supply reliance on pipeline imports. See related news item Wednesday, December 13 - Edison Investing $5.2 Billion to Make Italy Gas Hub by 2012

The Italian power company Enel (NYSE:EN) (Rome, Italy) is planning Europe’s largest investment plan in renewable energy over the next five years. The $5.3 billion plan targets $4.3 billion in 1,700 megawatts of renewable sourced power generation capacity by 2011 and one billion dollars for innovative projects such as the ‘Archimede’ solar plant, biomass and biofuel projects. Included in the plans are photovoltaic plants at the transformer stations of Enel’s network and a major project to develop and test ‘smart grids’ that can adapt to the needs of distributed generation. Zero emission power systems and hydrogen power are also in the plans. Overall, the plans will avoid the emission of 4 million tons of CO2 per annum, once fully implemented.

In the company’s five-year energy investment plan, which was released last year, a total of $19 billion projects were planned.

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