Western Europe has less than 4GW of natural gas powered plant under development, reports Platts, a global information provider for industry and markets.

According to Platts’ Power in Europe Project Tracker, the level of development is the lowest in over a decade.

The project tracker by Platts’ long running publication Power in Europe studies electric power generation capacity and construction of power facilities in the continent.

Power in Europe associate editorial director Henry Edwardes-Evans said: “Since 2008, Europe has experienced strong subsidised growth in renewable energy, sustained periods of weak demand and low wholesale power prices, all of which have deterred thermal plant investment, particularly gas plant construction.

“There are only pockets of opportunity for thermal plant development in West Europe.

“Upcoming capacity auctions in the UK and Belgium are expected to be hotly contested, but in Germany, sector analysts see no need for thermal plant additions for several years. In fact, there is a trend of closures and mothballing of plants across Germany, the Netherlands, France and Austria.”

In September 2006 and early 2012, the tracker had recorded 23GW and 15GW of combined-cycle gas turbine (CCGT) plants under construction, respectively.

Reasons behind the lack of growth can be shelving of several approved CCGT facilities, and a few operational plants are up for sale such as those owned by Verbund in France and three UK plants owned by Centrica.”

Around 35GW of CCGT plants are shelved while many others are being broken up with equipment being sold overseas.

The tracker indicates that 6.8GW of coal power plants in construction are all in Germany and the Netherlands, and only 3GW are in the “approved” category, with no immediate prospect of further progress.

The facilities were planned when demand was surging and prices were higher.

With regard to pumped-storage hydropower, the report says that this segment is going through a development surge. Around 4.6GW of hydropower plants are in construction, mainly in Switzerland and Portugal.

Under the nuclear category, approximately 3.2GW plants are in construction in West Europe. Two European Pressurized water Reactor (EPR) projects are, however, progressing at slow pace.

Around 15 offshore wind farms, of a total 4.3GW, are under construction and majority of them are in Germany (2.36 GW), followed by the UK (1.4 GW).

Compared to last year, capacity additions in renewable segment are down 25% and the sector representatives think this contraction will continue till 2016.

Investment firm Kohlberg Kravis Roberts and its affiliates (KKR) have acquired a one third stake in ACCIONA Energía Internacional (AEI), the international renewable energy division of Spain-based ACCIONA, for €397m.

ACCIONA chairman and CEO José Manuel Entrecanales Domecq said: “The alliance between KKR and ACCIONA marks a new milestone for the renewable energy industry.

“With KKR as a long-term financial partner, ACCIONA is in a strong position to take advantage of the huge opportunities that lie in the global market for renewable energy.”

The energy division of the firm, ACCIONA Energia, will retain the remaining two-third stake in AEI.

AEI’s portfolio includes wind farms and a limited number of solar PV and thermal installations.

Following the completion of the reorganisation, AEI will hold a diversified portfolio of ACCIONA Energía’s operating renewable assets outside of Spain.

The portfolio of renewable assets include 2.3GW in 14 countries – US, Mexico, Australia, Italy, Portugal and South Africa, all of which generate steady cash flows of €120m a year.

This investment takes AEI’s enterprise value to €2.6bn, including €1.3bn in equity and €1.3bn in net debt.

The partnership between KKR and ACCIONA also comprises a management agreement.

As per this agreement, ACCIONA Energía will operate AEI’s assets for 20 years for an annual fee.

In addition to this, ACCIONA Energía will give AEI a Right of First Offer on future renewable energy projects it develops within AEI’s operational territory.

ACCIONA Energía claims that it has a pipeline of around 3GW, which can be accelerated with a partnership with KKR.

Both the firms have plans to promote international IPO through a YieldCo vehicle, which will have several assets of AEI.

KKR co-chairman and co-CEO Henry Kravis said: “This investment adds to our track record of building successful partnerships with corporates and families. I am really optimistic about the opportunity to partner with such a prominent renewable energy company and to help further develop what is already one of the largest operating renewable portfolios in the world.”

EFG Hermes, an investment bank in the Middle East, has acquired a 49% equity stake in French wind energy company EDPR France through a $208m deal.

As per the terms of the deal, EFG Hermes’s private equity arm will manage the investment vehicle, while EDPR France will retain operational control over the acquired assets.

EDPR France, a subsidiary of global renewable energy firm EDP Renewables, has a portfolio of 33 operational wind farms with a combined gross capacity of 334MW.

EFG Hermes co-chief executive officer Karim Awad said: “Our first investment beyond the borders of the Middle East and Africa is a natural outgrowth of our emphasis on infrastructure private equity and, moreover, marks the launch of our direct investment strategy.”

EFG Hermes head of equity Karim Moussa said: “We’ve recently seen a strong surge in investor appetite for cash-yielding renewable assets, mainly driven by the prevailing low interest rate environment.

“EDPR France’s asset portfolio offers a strong dividend stream and healthy risk-adjusted returns for the investors.”

The transaction will be closed post regulatory approvals and customary closing conditions.

Nearly 50% of the $208m will be funded through a finance facility secured from leading European banks.

While EFG Hermes will provide seed capital of approximately $5m for the equity component of the transaction, the remainder will be raised from the GCC.

Global Capital Finance, Shearman & Sterling and Watson, Farley & Williams, Garrad Hassan and SGS, Grant Thornton and Pöyry are the advisors to EFG Hermes for the buyout.

UK venture capital firm Scottish Equity Partners (SEP) has today (2 September) announced it has raised £135m for a new infrastructure fund to invest in a diversified portfolio of UK-based clean energy projects.

The Environmental Capital Fund (ECF) will be used to support small-scale hydro power, energy efficiency, heat pump and district heating projects in a bid to meet an increased demand for capital from the UK’s rapidly growing clean energy market.

“The market opportunity for energy infrastructure finance is very attractive, and the new fund fits well with our existing activities,” explained SEP’s managing partner Calum Paterson.

The EDF has been backed by British electric utility company SSE as well as a syndicate of financial investors led by Lexington Partners, the world’s largest independent manager of secondary private equity and co-investment funds.

SSE’s finance director Gregor Alexander said: “We are delighted to participate in SEP’s new fund targeted at small-scale clean energy projects throughout the UK. The transaction ensures our resources are fully focused on SSE plc’s core purpose of providing the energy people need in a reliable and sustainable way whilst supporting future investment in clean energy.”

ECF marks the first move into the infrastructure market for SEP, but complements the Environmental Energies Fund (EEF) launched in 2011, which acquired a portfolio of venture capital and private equity cleantech investments from SSE.

Marshall Parke a managing partner in Lexington Partners’ London office, added: “This is the second time Lexington has partnered up with SEP and SSE in an innovative secondary transaction, this time for the infrastructure and clean energy sectors. Both sectors are relatively new to the secondary market, and areas in which we expect to see more secondary activity in the future.”

Luke Nicholls

DONG Energy has installed the first offshore wind Suction Bucket Jacket at its Borkum Riffgrund 1 offshore wind farm in Germany.

GeoSea, a subsidiary of the Belgian Deme group, was in charge of the floating load out, transport and installation of this wind turbine jacket foundation.

SPT Offshore was in charge of the suction process.

Carbon Trust Offshore Wind Accelerator (OWA) from the UK also collaborated with Dong Energy to test the new foundation concept.

Situated 37km away from the North West coast of Germany, the Borkum Riffgrund 1 offered an ideal testing ground due to its sandy seabed.

The installation vessel Pacific Orca, which was supplied by DONG Energy, is presently demobilising in Eemshaven.

Tideway, a sister concern of GeoSea, will soon install the armour stones.

DONG Energy vice-president Tove Feld said: “It’s a great day for us. We’ve now installed the very first suction bucket jacket in the offshore wind industry.

“The reduction in cost of electricity and our ability to utilise some of the more challenging sites further from shore and in deeper water show some of the potential that this concept has.

“I’m very excited to see that the cooperation between the partners in this project, not least with Carbon Trust in the UK, is paying off with specific results.”

The Suction Bucket Jacket (SBJ) technology had been previously used for offshore oil and gas foundations and offers economic and environmental benefits.

The design of the 850t suction bucket jacket comprises three legs that are welded together in a jacket structure, standing on top of three huge suction buckets anchoring the foundation to the seabed.

A lightweight structure, it only requires a single operation when the foundation is installed offshore, thereby cutting down the time of the installation and reducing the costs of electricity from offshore wind.

Image: The offshore wind Suction Bucket Jacket being installed on the Borkum Riffgrund 1 offshore wind farm. Photo: © 2014 DEME.

Lithuania is considering closing 900MW of its gas-fired generation capacity by 2016 due to reduced margins.

Producer and wholesaler of electricity Lietuvos Energijos Gamyba (LEG), which is part of the state-controlled energy group Lietuvos Energija, will close two 150MW units at Lithuania’s biggest power plant, Lietuvos Elektrine, by the end of 2014 and two additional units, each producing 300MW, in 2015.

Around 60% of electricity demand for the country is being met through imports as domestic generation of electricity from imported gas is turning out to be expensive, reports Reuters.

High gas prices and low wholesale prices for power have been the primary reasons for problems faced by gas-fired power plants in Europe.

Following the closures, the company will operate one 455MW combined cycle gas turbine (CCGT) and two reserve power units, each carrying a capacity of 300MW.

Lietuvos Energijos is also seeking to invest between $148m to $212m for 225MW unit development at its Kruonis pumped storage hydropower plant and a wind power park with an approximately 40MW to 45MW capacity.

Lithuania, by the end of 2015, plans to construct new power links to Sweden and Poland, which is expected to further push the prices down in the country.

In addition to importing gas from Russia, the country intends to import liquefied natural gas (LNG) from 2015.

Meanwhile, Lietuvos Energijos has announced its 2014-2020 business strategy.

Lietuvos Energijos Gamyba CEO Juozas Bartlingas said: “The seven-year strategy was drafted by taking into consideration a number of various aspects that affect the activity of Lietuvos Energijos Gamyba.”

The company expects its total revenue to drop for the next year due to reduced production volumes at Elektrenai Complex, and intense competition.

Clean Energy Finance Corporation (CEFC) has invested more than $900m in the 2013-14 financial year in projects worth more than $3bn in total value.

The investments cover a diverse range of economic activity such as agribusiness, waste coal mine gas-to-energy, wave energy, bioenergy, energy efficiency projects in local government and the community sector, and efficiency upgrades across the full spectrum of the property sector.

CEFC CEO Oliver Yates said the CEFC is demonstrating the potential that its activities offer to catalyse greater private sector investment into the sector, with its current portfolio achieving matched private sector funds of more than $2.20 for each $1 of CEFC investment.

“The CEFC invests for a positive return, with its investments presently expected to earn an average yield of approximately 7%, which is more than 3.5% above the government’s cost of funds prevailing when the investment were made,”Yates said.

“Through this portfolio of 40 direct investments and a further 25 projects co-financed under aggregation partnerships, the CEFC is delivering abatement estimated at more than 4.2 million tonnes of CO2e p.a., with a benefit to the taxpayer of around $2.40 per tonne of CO2e abated (net of government cost of borrowing).”

The CEFC has partnered with all four major banks and more than ten other domestic and international banks for the investment.

The CEFC will also finance $227m, of which around $133m is for new solar programmes and projects, which will bring its total commitment to solar to more than $200m.

Some of the investments of the CEFC include up to $120m for three new Solar PV financing programmes, up to $70m for a programme by SunEdison, up to $20m for a programme offered by Tindo Solar, up to $30m for a programme by Kudos Energy and $13m under a structured project finance facility.

Siemens has completed installation of a fourth high-voltage direct current (HVDC) offshore platform in the North Sea, marking a step ahead for grid connections of sea-based wind farms.

Prior to the installation of the 864MW SylWin1 alpha converter platform, Siemens has completed the 690MW HelWin2 converter station near the German island of Heligoland, also in the North Sea.

Siemens is currently under a contract to implement a total of five North Sea grid connection projects for European electricity transmission system operator TenneT.

Located approximately 70km to the west of the island of Sylt, the 864MW SylWin1 platform will convert alternating currents coming from the Dan Tysk, Butendiek and Sandbank offshore wind farms into direct current.

The direct current will be transported to land through a 205km-long subsea cable.

The first four grid connections are due to take up commercial operation successively between the second half of 2014 and the first half of 2015 while the fifth grid connection is expected to go on-line in 2019.

Siemens AG Power Transmission and Smart Grid Divisions CEO Jan Mrosik said: “Once they have been commissioned, these grid connections will supply electricity from offshore wind power for around three million households.”

TenneT Germany offshore director Wilfried Breuer said: “In the past few days, we have erected two platforms in quick succession that will provide approximately 1.5GW of additional capacity for feeding offshore wind energy into the onshore transmission grid.

“The German Government has decided to increase the transmission capacity for offshore wind energy by 6.5GW in the period until 2020. In 2015, two-thirds of that target will already have been achieved.”

Deal aims to broaden Yaskawa’s exposure in the renewable energy market and expand the use of its PV inverter technology expertise.

Mitsubishi Hitachi Power Systems Europe (MHPS-EDE), a group company of Mitsubishi Hitachi Power Systems (MHPS), has been awarded a contract to construct a lignite-fired ultra-supercritical-pressure thermal power unit at Turów, Poland

Under the contract JPY110bn ($1.08bn), the consortium of the three companies will develop a 450MW power unit for a power generation company under the corporate umbrella of Polska Grupa Energetyczna (PGE), a state-controlled power provider in Poland.

MHPS’s proprietary technologies in low-grade coal combustion for boilers will be used for the project to enable efficient use of lignite.

The plant is scheduled to commence operations in the middle of 2019 and the new unit, once completed, will respond to robust electric power demand accompanying Poland’s steady economic growth.

MHPS-EDE-led consortium comprises civil engineering company Budimex SA and the engineering firm Técnicas Reunidas.

The newly built unit of Turów power plant will feature a boiler, steam turbine, condenser, power generator, instrumentation and control equipment and desulfurisation equipment.

MHPS and MHPS-EDE will be responsible for all aspects from core equipment manufacture and supply to test operation, whereas Budimex and Técnicas Reunidas will be responsible for civil engineering, construction, installation, electrical machinery and other activities.

MHPS will continue to apply its low-grade coal combustion technologies for high-efficiency ultra-supercritical pressure boilers.

Approximately 90% of the gross power generation of Poland relies on coal firing and the country has one of the world’s largest reserves of coal.