Monday, March 24, 2008

EdF and Iberdrola, a Renewable Energy Powerhouse? by Denis Du Bois

The French utility Electricite de France SA has had exploratory talks with a construction company in Spain, with its eye on the Spanish energy market, according to an AP wire story.

The Wall Street Journal reported that EdF and Actividades de Construccion y Servicios SA (ACS) are in advanced talks about teaming up to buy Iberdrola DS and Union Fenosa SA -- two major Spanish utilities -- for US$134 billion.

The combination of these two giants of renewable energy would create a global powerhouse with considerable clout in the supply chain and in politics.

EdF is the world's largest utility. Its subsidiary Energies Nouvelles is a major player in the renewable energy sector. One of the company's larger endeavors in 2007 was to start construction of a 300 MW wind farm off the coast of Belgium.

Energies Nouvelles operates four U.S. wind farms with 508.5 MW of total capacity owned by MidAmerican Energy Company. Energies Nouvelles Reparties (ENR) is a new EdF venture in equipment manufacturing, such as solar water heaters, photovoltaic modules, heat pumps and wood-fired heating equipment.

Iberdrola Renewables is a major operator of utility-class wind and solar installations, claiming 7,704 MW in clean energy production capacity worldwide.

Within the last few weeks it completed commissioning of the 223 MW Klondike III wind farm in Oregon.
The utility group last month acquired rights to a portfolio of 50 wind projects, with a total of 1,600 MW, in Romania. In 2007 New Energy Finance ranked Iberdrola Renewables as the world's leader in installed wind power capacity.

The acquisition deal has been only partly confirmed by EdF, and could face insurmountable resistance from regulators or the acquisition targets.

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