European Power Utilities look to Private Capital to Increase Renewable Energy generation

European Power Utilities are increasingly looking towards private capital in order to fund their renewable energy projects.The European Union has a target of generating 20% of its energy from renewable energy sources by 2020.With most of the European countries facing budgetary and fiscal problems,Electricity utilities in Europe need to look for other sources of fund in order to meet the EU targets.Renewable Energy Generation based on Solar and Wind Energy typically requires large upfront capital costs with low operations and maintenance costs.This is unlike fossil fuel and hydro based power plants which require less capital upfront but more fuel and operations cost in the latter years.The ambitious offshore wind projects off the United Kingdom and the Desertec project in North Africa will require massive amounts of funding.

Italy utility Enel is proposing to IPO its renewable unit this year in order to lower its massive Euro 51 billion debt burden and raise capital for further renewable energy projects.Note Italy has one of the highest electricity rates in the world due to a lack of oil and mineral resources and imports most of its power.German utility E.ON is looking to partner with Abu Dhabi renewable energy arm Masdar to build more renewable energy projects.Note Masdar already has a solar thin film plant in Germany though it is facing problems.E.ON is going to invest a massive $10 billion in Green Energy projects over the next 5 years.

E.ON Says Utilities Need Financial Partners for Wind, Solar – Bloomberg

E.ON AG, Germany’s largest power company, and European competitors need financial support from investors and partners to reach their renewable energy targets, said Frank Mastiaux, who heads the company’s renewable division.E.ON may expand cooperation with Masdar, the $22 billion clean technology venture set up by Abu Dhabi, Mastiaux said yesterday in an interview in Duesseldorf, Germany. E.ON aims to increase the power it generates from renewable sources to 36 percent in 2030 from 13 percent in 2008.The German utility is investing 8 billion euros ($10 billion) in the five years through 2012 on wind parks and to a lesser degree on solar energy and biogas projects. Expanding at a faster pace is “technically feasible” and E.ON is assessing the price of carbon and other factors to determine how much it spends on renewable energy in the coming years, Mastiaux said.

Enel May Beat 2010 Earnings Target, Picks October for Green IPO – Businessweek

Enel also plans a 4 billion-euro initial public offering of its Green Power division, which manages wind, solar, biomass, hydro and geothermal power producers in 17 countries, to help repay debt.

The Italian government’s plans to cut subsidies for renewable-energy producers won’t affect Enel’s Green Power unit, two-thirds of which operates without state support, and won’t sway the IPO, Conti told reporters in Moscow today. The unit already has “solid cash flows” and can float “successfully even in the turbulent times that we are in now,” he said.