From the top of Arthur’s Seat, the extinct volcano in Edinburgh that rises more than 250 metres above sea level, the view out east towards the North Sea will forever be altered. For nearly five decades, the two 149m-tall chimney stacks of the coal-fired Cockenzie power station dominated the skyline until 2015, when they were blown up by the site’s former owner, ScottishPower, the UK arm of Spanish utility giant Iberdrola. Last year, ScottishPower dispensed of its remaining fossil fuel plants in less dramatic fashion through a £700m sale to UK power company Drax. The deal was just one of many transactions by the traditional European utility companies in recent years. More deals and strategy overhauls are to come, according to company executives and analysts, as the traditional power companies find themselves in a battle for survival. The threats to their traditional business models are multiple and will test almost every part of the chain in which utilities traditionally operated, from electricity generation, to networks and supply to customers. Power generation is also becoming more “decentralised” or local. No longer are energy systems reliant alone on a series of large, central power stations, whose output flows via the transmission and distribution networks to households and businesses. More generation, such as wind turbines or solar farms, bypass the transmission system and are connected to the distribution networks – in other words closer to where it will be used. More homeowners, businesses and communities are also choosing to generate their own electricity. Companies that own networks are increasingly dealing with two-way flows of electricity. This is because electricity flows back into the grid from local projects as well as down from central power plants, rendering their job of managing the system more complex. This problem is only expected to grow as more drivers buy electric vehicles and will be able to use their car batteries as a way of storing electricity and then discharging it when demand is high. Trials are also running in the UK this year of “peer to peer” trading – where homeowners could trade electricity directly with their neighbours or local businesses with solar panels, cutting out the traditional utility altogether.
FT 28th Feb 2019 read more »
French energy group Engie is to pull out of 20 countries to further streamline operations and simplify the group in an effort to win over investors. Isabelle Kocher, chief executive, said the policy meant continuing its specialisation in renewables, services and infrastructure. “We have repositioned our company along these three segments that are growing, but the question now is can we sleep on that? Of course not,” Ms Kocher, who took over the group in 2016, told the Financial Times. Engie will exit 20 countries, where it has a marginal presence, and aim to build up its position in 20 more, including in some of the largest cities in the developing world. Ms Kocher announced the new plan as Engie reported mixed full-year results, due in part to outages at its Belgian nuclear plants.
FT 28th Feb 2019 read more »