Enel SpA, the biggest utility in Italy and among the biggest in Europe, is buying out the minority shareholders of its renewable energy business, Enel Green Power. The company called the consolidation "beneficial," predicting it will reduce the volatility of producing electricity, smooth out grid connections and take advantage of the "acceleration in the pace of growth in the renewable business."
The firm announced that it had approved the purchase in a statement yesterday as part of its corporate plan for the next four years.
"The utilities sector is facing a very fast pace of change, and the flexibility inherent in Enel’s business model allows us to position ourselves accordingly," Enel Group CEO and General Manager Francesco Starace said in a statement from London. "Enel Green Power is one of the growth engines of the Enel Group."
U.K. Secretary of State for Energy and Climate Change Amber Rudd, speaking yesterday in London, too, shook up the British utility market with an address to the Institution of Civil Engineers.
The U.K. government, Rudd said, will begin the process of phasing out and then shuttering "all unabated coal-fired power stations" by 2025 and "restrict their use by 2023."
Plans to phase out coal from the U.K. power supply are subject to authorities’ approval at a spring consultation.
"But let me be clear, we’ll only proceed if we’re confident that the shift to new gas can be achieved within these timescales," Rudd said, according to a copy of her remarks.
"Energy security has to be the number one priority," she said. "But no responsible government should take a risk on climate change either," Rudd said, adding that the international climate summit in Paris in December must see that heavy-carbon energy is a fuel of the past. "It’s one of the greatest long-term threats to our economic security."
EDF Energy, one of the country’s "Big Six" power companies, said coal is an important part of its business, "but we know that unabated coal generation" is not part of the United Kingdom’s energy future. "Affordability for customers is a key priority and is best achieved with reliable baseload nuclear electricity alongside flexible gas supply available to back up intermittent renewable energy sources like wind or solar," EDF said.
A spokeswoman for British Gas, officially BG Group PLC, which owns a 20 percent stake in the United Kingdom’s nuclear fleet, said by email that the firm doesn’t have any coal plants or investment plans for coal.
Scott Somerville, a spokesman for the U.K. division of E.ON Group, a large European utility, said managers will examine the proposals published in the spring.
"Coal-fired power stations which meet rightly rigorous U.K. and European standards should remain an important part of the U.K.’s energy mix, along with gas, renewables and new nuclear, to help ensure the lights stay on and we all meet the energy challenge head on as we move to a low carbon future," Somerville said in a email.
The other four of the Big Six utilities didn’t respond to requests for comment.
Traders soured on coal energy following Rudd’s announcement, punishing Drax Group PLC, the biggest coal-fired utility in the United Kingdom: The company’s shares closed yesterday down more than 4 percent.
The United Kingdom is the largest oil producer and second-largest natural gas producer in the European Union, according to the latest data from the U.S. Energy Information Administration. Rudd said yesterday that the United Kingdom used a higher percentage of coal-generated electricity in 2014 than in 1999.
"Perversely, even with the huge growth in renewables, our dependence on coal, the dirtiest fossil fuel, hasn’t been reduced," she said.
Obama asks Asian business to go ‘all-in’ on renewables
Renewable-generated electricity jumped about 20 percent between 2013 and 2014, according to government statistics. Twenty-five percent of U.K. power comes from renewables, while 30 percent and 20 percent, respectively, come from natural gas and coal combustion. Nuclear power churns out slightly more than 22 percent of the country’s power.
The U.K. government has set a goal to cut carbon emissions 80 percent by 2050 from 1990 levels.
"This is not a Herculean task; we’ve already gone a long way," Anthony Hobley, CEO of the Carbon Tracker Initiative, a think tank that studies the energy and financial markets, said in a call from London, referencing Rudd’s announcement. As long as costs for offshore wind fall sufficiently, Hobley said, "There is strong support for offshore wind."
For the United Kingdom to be the first industry economy to entirely phase out coal power would be dramatic, he said, noting that the country — "the cradle of the industrial revolution," in his words — was the first to successfully harness coal for electric power centuries ago.
Organisation for Economic Co-operation and Development members agreed Tuesday to rein in public funds for coal-fired power plants — a measure White House officials called a "major step forward" (ClimateWire, Nov. 18).
Speaking in Manila, at his fifth Asia-Pacific Economic Cooperation (APEC) summit, President Obama said a bold accord in Paris could "signal to the private sector to go all-in on renewable energy."
While no nation is insulated from climate impacts, it presents financial and development opportunities, the president said.
"APEC is working to double renewable energy and reduce energy intensity by 45 percent over the next two decades. And through the Green Climate Fund and other avenues, the international community is helping developing nations to adapt to climate change and, as I said, leapfrog over the dirtier phases of development," Obama said, according to text of his speech. "We have to break out of the mindset that says that if we’re doing something about climate change, that slows growth."
The OECD deal would permit public coal power financing in some emerging economies, including India and Indonesia (Greenwire, Nov. 17).
Indian Prime Minister Narendra Modi’s Cabinet yesterday approved the sale of 10 percent of the government’s stake in Coal India Ltd., the country’s state-controlled coal and mining behemoth.