Andover, Massachusetts, is building a balanced RE portfolio in the U.S., Canada and Latin America. CHI owns 66 MW of wind capacity in the U.S., is building a 23 MW biomass plant in Quebec, and owns and operates a 1.6 MW landfill gas facilitiy, alsa in Quebec. With only 24 MW of wind capacity in operation at the acquisition, EGI has a total of 240 MW of wind under construction or in development in Costra Rica, El Salvador, Guatermala and Chile. Varying Strategies Acquiring wind developers gives utilities instant RE market share, taps operational experience, and provides Access to Project pipelines that can extend to 1,000 MW or more. Far example, when Electricite de France (EDF) belatedly decided to invest in wind it took a 35% stake in wind and minihydro developer SIIF Energies, which is slated to develop 760 MW of renewable energy over the next three years, including 490 MW of wind. in June 2002, SIIF Energies acquired the wind energy activities of the enXco Group, one of the world's leading wind farm developers. With the acquisition, SIIF Energies, and EDF in turn, added 191 MW of wind capacity ownership, primarily in the U.S., operating management of another 550 MW, and a Project pipeline of over 1,600 MW in the U.S., Europe and Australia. in a similar strategy, Tokyo Electric Power Co (TEPCO), Japan's largest utility and one of the largest in the world, took a 50% stake in Tomen Holdings, Tomens's wind development company. The resulting joint venture was named Eurus energy ("eurus" is Greek for "wind from the east"). Tomen Holdings had a 534 MW wind base at YE 2001, and has development MAKALE / ARTICLE rights far another 2,400 MW in Europe, USA, and Japan. in July 2002, mega-utility RWE, through its Dortmund-based subsidiary Harpen AG, acquired AERSA S.A. of Barcelona, a wind developer with about 340 MW to be in service at YE 2002, including some small hydro, and another 130 MW of wind in the pipeline. Outlook for RE Utilities The battle to capture the renewables high ground is expected to intensify as Europe's mega-utilities take steps to defend their flanks, and as the rapid growth of wind, biomass, and solar Technologies puts increasing financial burdens on developers. Consolidation will continue, with mergers and acquisitions designed to establish market position, to capture RE Project pipelines, and to forge broader alliances capable of competing on a global basis. Some of the European giants, with increasing awareness of RE growth prospects outside their home markets, have started down the acquisition trail - EDF with SIIF and enXco, RWE with Harpen and AERSA. Others like Enet and Endesa have been restructuring renewables activities in cohesive business units to manage growth strategies; both have announced their intentions to seli stakes in their RE subsidiaries to strategic partners. Emerging RE Generators The battle to build portfolios, between these giants and a growing number of small to mid-sized RE utilities, is certain to spill into RE growth markets (Table 1 ): t As wind markets saturate in Germany and Spain the scramble for global market share will unfold in ltaly, France, the UK and the U.S. t Offshore wind markets, requiring major capital investments and sophisticated technology, are set to explode in Europe over the next five years. t While slower to develop, the U.S. market will continue to draw interest from European players t Markets for wind, biomass, mini-hydro, cogen and solar are rapidly developing in emerging markets Meanwhile U.S. companies are expected to move slowly to globalize their renewables strategy. in the first place, they face significant competition within their home market on a state-tostate basis. U.S. IPPs moreover are in retreat from international markets in general, and investors may not tolerate significant new international risks at this time. Eventually more and more U.S. players will team up with European and other international players, but most likely motivated by their partners' strategies to enter the U.S. Wind energy is the tool of choice for erecting a global RE strategy. The fast growth of wind markets worldwide has contributed to a number of wind developers scaling to utility size, essentially establishing themselves as wind IPPs. As these developers scale up their wind assets, some are building a broader portfolio of renewable energy assets to position themselves as RE-based IPPs. At the same time, wind developers and operators have proven to be attactive acquisition targets for utilities and IPPs, large and small, wanting to add some green energy quickly to their portfolio. ENERJi & KOJENERASYON DÜNYASI 67
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