E.ON and Hydrocop to jointly bid for French hydropower

Reuters News
Posted: Feb 06, 2012 10:58 AM
E.ON and Hydrocop to jointly bid for French hydropower

PARIS/FRANKFURT (Reuters) - German utility E.ON and Hydrocop Concessions, a group of eight energy distributors in France, announced a partnership on Monday to bid for lucrative hydropower contracts if the French government opens the business up to competition.

E.ON has taken several steps to expand its business in the area of renewable energy after Germany's decision to exit nuclear power hurt the country's utilities.

The company aims to spend 7 billion euros ($9.2 billion) on expanding its renewable business over the next five years.

France is in the late stages of preparing to launch tenders to renew concessions for 10 hydropower stations, opening up a sector so far dominated by former state monopoly EDF.

The bidding rounds were initially supposed to be made on a case by case basis between 2010 and 2013, with new operatorships expected to be awarded between 2013 and 2015.

But none of the tenders has yet been launched.

A spokeswoman at the French Ecology ministry said she could not say when the first round of bidding would take place. She said the ministry was in the process of hiring advisers to ensure tender specifications were flawless.

"We are late," the spokeswoman said. "We are finalizing the tender process to recruit advisers," she added.

The European Union has asked France to open up 20 percent of its hydropower plants to competition.

France's concessions due for renewal are located in the Alps, the Pyrenees and in the centre of France.

France's 23,500-MW hydropower capacity is currently run by EDF and, to a much smaller extent, by GDF Suez, which has said it wants to increase its market share in the sector.

Hydropower accounted for 12 percent of France's power output in 2009 with 518.8 terawatt hours, power grid operator RTE said.

When EDF became a corporation in 2004, the European Union requested the opening up of some capacity to competition and the end of preferential treatment for EDF, which runs 85 percent of the country's hydropower plants. ($1 = 0.7621 euros)

(Reporting by Muriel Boselli and Christoph Steitz, Editing by Mark Potter)