THE ENERGY INDUSTRY TIMES - JUNE 2017 Companies News 9 PGE acquires EDF assets n EDF approves Edvance JV n Assystem makes Areva NP offer Siân Crampsie EDF has taken further steps forward in its €10 billion disposal plan with an agreement to sell Polish assets to PGE Polska Grupa Energetyczna. Under a €1.4 billion deal, PGE will acquire eight combined heat and power (CHP) plants from EDF as well as a number of heat distribution networks. EDF started negotiations with PGE and a consortium of other Polish energy companies in January 2017 over the sale of the assets after the Polish government blocked the French firm’s wish to sell them to IFM Investors and EPH. The Polish government said that it was concerned about energy security and put the assets – which include CHP plants in Gdynia, Gdansk, Kraków, Wroclaw, Torun, Zielona Góra, Zawidawie and Siechnica – on a list of companies deemed important for national energy security in order to be able to block their potential sale. The sale, which also includes the heat distribution networks of Czechnica, Torun, Zawidawie and Zielona Gora, is a key element of EDF’s plan to dispose of non-core assets to raise capital for its acquisition of French nuclear group Areva NP. That deal also made progress last month when EDF said its board had approved a plan to create a joint venture with Areva NP to house the two firms’ engineering activities. The new joint venture, called Edvance, will be responsible for the basic design and implementation of projects involving nuclear islands and control systems for reactors under construction, both in France and abroad. EDF will own 80 per cent of the new company, while Areva NP will own the remainder. In a statement EDF said that the creation of Edvance is an important step in the reconstruction of the French nuclear industry. It added that the new company is being set up independently from EDF’s deal for a controlling stake in Areva NP, which is expected to close at end of 2017. Last month Assystem S.A., a French engineering consultancy, announced that it had placed an offer to buy a five per cent stake in Areva NP for €125 million. The move would enable the company to strengthen its partnership with EDF as well as play a role in the restructured French nuclear industry, it said in a statement. The valuation is consistent with that in the agreement drawn up between EDF and Areva in 2016. EDF is set to acquire up to 75 per cent of Areva NP as part of a broad plan by the French government to rescue the country’s nuclear sector. Energy firms accelerate blockchain technology n Energy Web Foundation secures funding n TenneT and IBM collaborate on pilot Siân Crampsie The Energy Web Foundation (EWF) says that it has secured first round funding of $2.5 million thanks to support from a consortium of global energy companies. EWF is a non-profit organisation with a mission to accelerate the use of blockchain technology in the energy sector. It has won the support of ten companies – Centrica, Elia, Engie, Sempra, Shell, SP Group, Statoil, Stedin, Tokyo Electric Power, and TWL – a move that will enable it to embark on commercial deployment of blockchain technology in the energy sector. EWF is a partnership between Rocky Mountain Institute and Grid Singularity. It says that blockchain technology could revolutionise the energy sector by reducing transaction costs. “The main challenge of the electricity sector in the 21st Century is to integrate more renewable energy into the grid in a cost-effective fashion in a context of largely flat or diminishing demand. The only way we know how to do this is by automating the demand side – by allowing many more participants in the grid. That means automation at the distribution edge, and integration of this automation with wholesale markets,” Hervé Touati, a managing director at RMI and president of EWF, said. Separately, TenneT announced in May that it had joined forces with sonnen, Vandebron and IBM to develop two pilot projects aimed at developing the first ‘blockchain’ distributed database for managing the electricity grid in the Netherlands and Germany. “These pilot projects are part of TenneT’s broader strategy of preparing the electricity system to accommodate the growing volume of renewable energy,” said TenneT CEO Mel Kroon. Touati added that blockchain technology would be a key building block of the 21st Century grid. “It also provides much higher levels of cyber security essentially for free – which addresses, as a by-product, one of the key concerns of utility executives when it comes to distributed energy resources.” Blockchain technology reduces transaction costs by keeping a single logical copy of transaction records – avoiding the need for reconciliation and settlement. It can be used to reduce the cost of utility bills or the need for working capital in wholesale market gas or electricity transactions. It can also allow energy devices such as batteries and water heaters to transact with each other at the distribution edge to provide support to utilities and grid operators. Toshiba reshuffles Toshiba has announced plans to restructure its business in a bid to maintain its operational integrity in the face of financial uncertainties. The beleaguered Japanese conglomerate has been rocked by the financial woes of its USA-based nuclear power plant business, Westinghouse, and says that it will split its four in- house companies into wholly-owned subsidiaries. The move is necessary for the company to retain the special construction business licenses required to do business in Japan, it said. The split would clarify the new companies’ responsibilities to market and customers, it added. Last month Toshiba published unaudited results in which it forecast a return to profit in the year ending March 2018, after booking a net loss of ¥950 billion for the 2016-2017 fiscal year. Toshiba is attempting to sell its chip business, worth around ¥2 trillion ($17.9 billion), a move that would boost its financial position but leave it with few growth drivers, according to analysts. In March Westinghouse filed for bankruptcy protection in the USA. The firm’s finances have been hurt by a slowdown in the new nuclear build sector and cost overruns at two US nuclear power plant projects. Toshiba will merge its Infrastructure System & Solutions company into Toshiba Electric Service Corporation. Its Storage & Electronic Devices Solutions will be split off, while its Industrial ICT Solutions Company will be merged into Toshiba Solutions Corporation. In October, it will split off its in-house company, Energy Systems & Solutions Company, and the Nuclear Energy Systems & Solutions Division, and transfer them to a newly established company. Wärtsilä aims for storage success Wärtsilä is positioning itself to become a key player in the global energy storage market. The Finland-based firm has signed an agreement to acquire Greensmith Energy Management Systems Inc., a USA-based energy storage technology firm. It has also announced plans to offer hybrid engine-storage plants worldwide. According to Wärtsilä, the acquisition of Greensmith will enable Wärtsilä to expand its footprint in the energy storage market and position itself as a leading global energy systems integrator. Greensmith has developed an energy management software system called GEMS, and also offers a Commercial and Industrial (C&I) and micro-grid solution called OMNI4. It was responsible for deploying around one-third of total US energy storage capacity in 2016, Wärtsilä said. In a statement, Wärtsilä said that it expects the energy storage market to grow “exponentially”. The company is aiming to become a global systems integrator with full in-house capabilities specialising in solutions that offer the combination and optimisation of different forms of power generation, energy storage and demand side management. In May, Wärtsilä announced that it would add energy storage solutions to its existing solar-engine hybrid power plant offering. It believes that hybrid solutions “are increasingly becoming financially attractive”, particularly in areas where fuel prices are high and the penetration of renewable power sources is significant. The acquisition of Greensmith will provide Wärtsilä with energy management system software that can optimise the use of hybrid power plants. “Together with Greensmith we will become a global energy systems integrator. Greensmith provides unparalleled software and energy storage knowledge and we provide our global footprint, EPC expertise and large sales network. A perfect match,” said Javier Cavada, President at Wärtsilä Energy Solutions. Combining its engine-based generation with storage and solar will increase Wärtsilä’s opportunities in markets where flexible generation is required. Earlier this year it booked an order to supply two gas fired 50 MW Smart Power Generation plants to energy services company Centrica in the UK. The plants will generate balancing power into the national grid with the ability to provide electricity in less than two minutes from start to full load. Speaking alongside Centrica and Baringa Partners at a recent press gathering in London, UK, Melle Kruisdijk, Vice President Europe, Wärtsilä, said that with the increasing amount of renewables, “the flexibility challenge is becoming more and more important”. Mark Futyan, Merchant Power Director at Centrica said that several things were happening that was driving the value of flexibility. He noted: “We see much less value and longevity in centralised power plants and much more value and need for flexibility.” This, he said, will see the company investing more in peaking, and flexible power plants, as well as storage as battery costs continue to fall.
Energy Industry Times June 2017
To see the actual publication please follow the link above