Green Utilities Renewable energy utilities forge global strategies While AEP, EON, RWE, EDF, Enel and other super-utilities battle for global market share - acquiring and divesting electricity and gas assets along the way to maintain balance in precarious capital markets - a new breed of global competitor is emerging, predominantly from the ranks of Europe's smaller utilities. Unable to compete on the basis of scale, these emerging players are building competitive advantage with their growing experience in renewable energies. William W. Ambrose, President, emerging Energy Research, ile reports. With some notable exceptions,such as FPL Energy and MidAmerican Energy of the U.S., these emerging renewable energy (RE) players are based predominantly in Europe, where renewables are strongly supported by government regulation. Having moved out on the experience curve with wind projects, mini-hydro, biomass and cogeneration, these small - to mediumsized utilities, including lberdrola of Spain, Nuon of the Netherlands, and Energi E2 of Denmark are looking to leverage RE competencies to expand market share outside their home markets. Scottish Power of the UK is one of the few to leverage renewables on two continents with its U.S. subsidiaries Pacificorp and PPM Energy. (Figure 1) Setting the stage on the global market: U.S. utilities are in rapid retreat globally, while European consolidation continues. The collapse of Enron, and depressed capital markets, have forced highly leveraged U.S. utilities to divest international assets, even at fire-sale prices, to cover debt. European mega-utilities, on slightly more stable fınancial footing, are also divesting selected assets, mostly overseas, while looking for bargains at home left by the fleeing Americans. Meanwhile, global economic recession has depressed electricity demand and has put increasing price pressure on generators, resulting in trouble for those with vulnerable cost structures. Amidst this retrenchment larger utilities are seeking to build RE assets to diversify their generation portfolio, but Europe's smaller utilities are seizing on renewables as a differentiation strategy to compete under the fray. This strategy can leverage regulated prices, experience-driven cost advantages in renewables, and the marketing high ground by extolling the social virtues of 100% Renewables Generation* 10% 0% Home Iberdrola FcottishPower1 Reglonal Internatfonal Globallzatlon
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