Difference between revisions of "Iberdrola"

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{{Template:Climate badge}}'''Iberdrola''' is a private multinational Spanish utility company, which owns [[ScottishPower]] in the UK. It is Spain's biggest power company and the world's largest wind generator.
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==Background==
 
==Background==
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Iberdrola's £11.6bn takeover of [[ScottishPower]] was formally approved by shareholders on 30 March 2007, effectively creating Europe's third largest utility company.
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The company has subsidiaries in approximately 40 countries, including Spain, Portugal, the United Kingdom, Germany, France, Italy, Greece, Russia, China, Egypt, Canada, Mexico, Brazil and the United States, among others. <ref> [http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=IBE.MC Reuters website], Iberdrola SA., accessed 29 August 2012</ref>
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In 2011 Iberdrola had an installed capacity across the globe of 46,026MW of which 7.5 per cent was nuclear. It is the largest Spanish power company with an installed capacity in 2011 of 21,989 MW in Spain (excluding renewables), of which 3,373MW was nuclear.
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Iberdrola is probably the world’s largest wind generator with 13,755MW of installed onshore wind capacity in 2012 across 23 countries. It also leads in offshore development with more than 6,300 MW under development in the UK and Germany as well as with licenses recently awarded in France. <ref> [http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBCONLINRENOVABLES&codCache=13462386021815549 Renewable Energy Business], Iberdrola website, accessed 29 August 2012.</ref>
  
In 2011 Iberdrola had an installed capacity across the globe of 46,026MW of which 7.5% was nuclear.It is the largest Spanish power company with an installed in 2011 of 21,989 MW in Spain (ecluding renewables), of which 3,373MW are nuclear.
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==UK lobbying and meetings with Energy minister==
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Between 2010 and 2011, Iberdrola met five times with the UK Parliamentary Under-Secretary of State at the [[Department of Energy and Climate Change]] (DECC) [[Jonathan Marland]] to discuss 'energy issues'.<ref> Who's Lobbying, [http://whoslobbying.com/uk/jonathan_marland Jonathan Marland], undated, acc 21 June 2012 </ref>
  
In 2006 Iberdrola made an £11.6bn takeover bid for [[ScottishPower]]. The offer was formally approved by shareholders at an EGM on 30 March 2007, effectively creating Europe's third largest utility company. Iberdrola’s installed capacity in the United Kingdom in 2011 was 6,036 MW (excluding renewables), none of which is nuclear. However, Iberdrola has a 50% share, along with [[GDF Suez]] in the [[NuGen]] consortium which is planning to build a new nuclear station next to Sellafield in Cumbria. <ref> [http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBCONLINNEG&codCache=13462385707493032 Liberalised Business], Iberdrola website, accessed August 2012. </ref>
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==A nuclear utility==
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{{Template:NuclearSpin}}Iberdrola is a member of the [[World Nuclear Association]],<ref>[http://www.world-nuclear.org/about/members.html World Nuclear Association website]</ref> the [[Spanish Nuclear Industry Forum]], <ref>[http://www.foronuclear.org/es/sobre-nosotros/socios Spanish Nuclear Industry Website]</ref> and the American [[Nuclear Energy Institute]]. <ref>By virtue of its membership of the Spanish Nuclear Industry Forum.[http://www.nei.org/resourcesandstats/documentlibrary/aboutnei/memberinfo/nei-governance-and-membership-roster Nuclear Energy Institute website], accessed 29 August 2012</ref>  
  
Iberdrola is probably the world’s largest wind generator with 13,755MW of installed onshore wind capacity in 2012 across 23 countries including: Spain 5643MW installed; USA 5,366MW; 1,195MW in the U.K. and 1,536MW in the rest of the world. Iberdrola also leads in offshore development with more than 6,300 MW under development in the UK and Germany as well as with licenses recently awarded in France. <ref> [http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBCONLINRENOVABLES&codCache=13462386021815549 Renewable Energy Business], Iberdrola website, accessed August 2012.</ref>
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===UK===
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None of Iberdrola’s 6,036 MW installed capacity in the UK (excluding renewables) in 2011 was nuclear. However, it is a 50 per cent joint owner with [[GDF Suez]] in the [[NuGen]] consortium, which plans to build a new nuclear station next to Sellafield in Cumbria. <ref> [http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBCONLINNEG&codCache=13462385707493032 Liberalised Business], Iberdrola website, accessed 29 August 2012. </ref>
  
The company has subsidiaries in approximately 40 countries, including Spain, Portugal, the United Kingdom, Germany, France, Italy, Greece, Russia, China, Egypt, Canada, Mexico, Brazil and the United States, among others. <ref> [http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=IBE.MC Reuters website], Iberdrola SA. Accessed August 2012.</ref>
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===Spain===
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In theory the previous Spanish government was committed to phasing out nuclear power, but only "if circumstances permit", according to former Prime Minister [[Jose Luis Zapatero]] speaking to the Spanish parliament in May 2006. There was no specific timetable. Industry Minister, [[Jose Montilla]], had even said the government would consider lifetime extensions for existing reactors. The nuclear industry in Spain was campaigning hard for the phase-out policy to be dropped. <ref>[http://www10.antenna.nl/wise/ Nuclear Monitor, 14 July, 2006.]</ref>
  
==UK lobbying==
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The November 2011 election brought about a change of government, which revisited an earlier decision to close Santa Mazria de Garona, allowing operation to continue until 2019. <ref> [http://www.world-nuclear.org/info/inf85.html Nuclear Power in Spain] World Nuclear Association Briefing July 2012, accessed 29 August 2012. </ref>
Between 2010 and 2011, Iberdrola met five times with the UK Parliamentary Under-Secretary of State at the [[Department of Energy and Climate Change]] (DECC) [[Jonathan Marland]] to discuss 'energy issues'.<ref> Who's Lobbying, [http://whoslobbying.com/uk/jonathan_marland Jonathan Marland], undated, acc 21 June 2012 </ref>
 
  
==A Nuclear Utility==
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Iberdrola owns a share of seven Spanish nuclear reactors:
  
Iberdrola owns a share of 7 nuclear reactors in Spain:
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*Santa Maria de Garona owned by [[Nuclenor]] which is a company jointly owned by Iberdrola and [[Endesa]] (Iberdrola’s share 50% of 446MW);  
*Santa Maria de Garona owned by Nuclenor which is a company jointly owned by Iberdrola and Endesa (Iberdrola’s share 50% of 446MW);  
 
 
*Trillo I (48%- 1003MW);  
 
*Trillo I (48%- 1003MW);  
 
*Asco II (15% - 992MW);  
 
*Asco II (15% - 992MW);  
 
*Vandellos II (22% - 1045MW);  
 
*Vandellos II (22% - 1045MW);  
 
*Cofrentes (100% - 1063MW);  
 
*Cofrentes (100% - 1063MW);  
*Almaraz 1 & 2 (53% of 947MW & 956MW). <ref> [http://www.world-nuclear.org/info/inf85.html Nuclear Power in Spain] World Nuclear Association Briefing July 2012. </ref>
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*Almaraz 1 & 2 (53% of 947MW & 956MW). <ref> [http://www.world-nuclear.org/info/inf85.html Nuclear Power in Spain] World Nuclear Association Briefing July 2012, accessed 29 August 2012. </ref>
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The Spanish nuclear phase-out dates back to 1984. This left three Spanish utilities - Iberdrola, [[Sevillana]] and [[Union Fenosa]] – with a total debt of US$2.6 billion for unfinished nuclear power projects. Five nuclear power stations were in various stages of construction when the moratorium was declared: Lemoniz I and II (Iberdrola) Valdecaballeros I and II (Sevillana) and Trillo II (Union Fenosa). Although this debt was assumed by Spanish banks in 1995, Iberdrola may be wary of investing in further risky nuclear projects. <ref>Spanish banks to assume nuclear debt, [http://www10.antenna.nl/wise/ Wise News Communique], 21 July, 1995.</ref>
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Iberdrola has substantial nuclear links abroad, mainly forged by its engineering division, which works on a range of power projects including nuclear jobs such as steam generator replacement in Mexico and construction in Romania.
  
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===Kalingrad and Russia===
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Iberdrola's engineering division also leads the company's potential involvement with the project for new reactors in the Russian exclave of Kaliningrad, which sits on the Baltic Sea between Poland and Lithuania. <ref>[http://www.world-nuclear-news.org/C_Iberdrola_looks_for_new-build_opportunities_0608091.html Iberdrola looks for new build opportunities], ''World Nuclear News'' 6 August 2009, accessed 29 August 2012. </ref> [[RosEnergoAtom]] will be the majority shareholder in the Kaliningrad plant; 49 per cent will be available to private investors. Iberdrola is one of the utilities in talks with the Russians about taking a stake. <ref> [http://www.world-nuclear-news.org/NN_Imminent_construction_of_Baltic_nuclear_power_plant_0802121.html Imminent construction of Baltic nuclear power plant], World Nuclear News 8 February 2012. Accessed 29 August 2012.</ref> Iberdrola is already working at the Kola, Balakovo and Novovoronezh nuclear power plants in Russia.<ref>[http://www.world-nuclear.org/info/inf45.html Nuclear Power in Russia] World Nuclear Association Country Briefings, 22 August 2012, accessed 29 August 2012.</ref>
  
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===Romania===
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Romania's state-owned [[Nuclearelectrica]] is trying to complete two reactors: Cernavoda units 3 and 4. In November 2008 an investment agreement setting up a new project company, [[EnergoNuclear]] SA, was signed between Nuclearelectrica, with 51 per cent of the project, and [[Enel]], [[CEZ]], [[GDF Suez]], [[RWE Power]] (each 9.15 per cent), Iberdrola (6.2 per cent) and [[ArcelorMittal Galati]] (6.2 per cent).
  
It is a member of the [[World Nuclear Association]].<ref>[http://www.world-nuclear.org/about/members.html World Nuclear Association website]</ref> The Company is also a member of the [[Spanish Nuclear Industry Forum]],<ref>[http://www.foronuclear.org/en/acceso_socios.jsp Foro Nuclear website]</ref> as well as the American [[Nuclear Energy Institute]],<ref>[http://www.nei.org/documents/NEI_Member_Roster.pdf Nuclear Energy Institute website]</ref> by virtue of its membership of the [[Spanish Electricity Industry Association]].<ref>[http://www.unesa.es/ UNESA website]</ref>
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However, in 2011 Iberdrola withdrew from the project for commercial reasons. <ref>[http://www.world-nuclear-news.org/IT-China_may_invest_in_Romanian_reactors-2110116.html China may invest in Romanian reactors] ''World Nuclear News'' 21 October 2011, accessed 29 August 2012.</ref>
  
In theory the Spanish Government is committed to phasing out nuclear power, but only "if circumstances permit," according to Prime Minister Jose Luis Zapatero speaking to the Spanish parliament in May 2006. There is no specific timetable, nor is there likely to be one before the next General Election in March 2008. Industry Minister, Jose Montilla, has even said the government will consider lifetime extensions for existing reactors. The nuclear industry in Spain has been campaigning hard for the phase-out policy to be dropped. <ref>[http://www.greenpeace.org/international/news/spain-adios-nuclear-31-06-06 Spain says “Adios” to Nuclear Power], ''Greenpeace Press Release'', 31 May, 2006. See also, [http://www10.antenna.nl/wise/  Nuclear Monitor, 14 July, 2006.]</ref>
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===Mexico===
  
==Nuclear Mexico==
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In recent years Iberdrola may have been trying to downplay its connections with the nuclear industry, by referring to itself as the largest operator of renewable energy in the world. Yet it is a member of a consortium with France's [[Alstom]], which won a contract to expand and modernise Mexico’s only nuclear plant at Laguna Verde. The upgrade is aimed at increasing Laguna Verde's capacity to 1,634 megawatts from 1,365 MW.<ref>[http://today.reuters.com/news/articleinvesting.aspx?view=CN&WTmodLOC=C3-News-2&symbol=IBE.MC&storyID=2007-01-20T013623Z_01_N19205676_RTRIDST_0_MEXICO-NUCLEAR.XML&type=qcna Mexico has Three Bids to Upgrade Nuclear Plant], ''Reuters'', 19 January, 2007. Also: [http://www.forbes.com/markets/feeds/afx/2007/01/22/afx3347669.html Alsom, Iberdrola poised to win Mexico Nuclear Power Plant Contract] ''Forbes'', 22 January, 2007. Platts Nuclear News Flashes, 2 March, 2007</ref>
  
In recent years Iberdrola may have been trying to downplay its connections with the nuclear industry, by referring to itself as the largest operator of renewable energy in the world, but it has recently been a member of a consortium, which won the contract to expand and modernize Mexico’s only nuclear plant at Laguna Verde. The consortium was made up of Iberdrola and France's Alstom. The upgrade is aimed at increasing Laguna Verde's capacity to 1,634 megawatts from 1,365 MW at present. <ref>[http://today.reuters.com/news/articleinvesting.aspx?view=CN&WTmodLOC=C3-News-2&symbol=IBE.MC&storyID=2007-01-20T013623Z_01_N19205676_RTRIDST_0_MEXICO-NUCLEAR.XML&type=qcna Mexico has Three Bids to Upgrade Nuclear Plant], ''Reuters'', 19 January, 2007. Also: [http://www.forbes.com/markets/feeds/afx/2007/01/22/afx3347669.html Alsom, Iberdrola poised to win Mexico Nuclear Power Plant Contract] ''Forbes'', 22 January, 2007. Platts Nuclear News Flashes, 2 March, 2007.</ref>
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In February 2007 the Federal Electricity Commission signed contracts with '''Iberdrola Engineering''' and Alstom to fit new turbines and generators to the Laguna Verde plant at a cost of US$ 605 million. The two reactors were then uprated progressively by 138 MWe each from 2008 to January 2011. Their operating life was also extended to 40 years. <ref> [http://www.world-nuclear.org/info/inf106.html Nuclear Power in Mexico], World Nuclear Association Briefing, July 2012, accessed 29 August 2012.</ref>
  
==Once Bitten …?==
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==Renewable expansion==
  
On the other hand, the Spanish nuclear phase-out dates back to 1984. This left three Spanish utilities - Iberdrola, Sevillana and Union Fenosa – with a total debt of US$2,6 billion for unfinished nuclear power projects. Five nuclear power stations were in various stages of construction when the moratorium was declared: Lemoniz I and II (Iberdrola) Valdecaballeros I and II (Sevillana) and Trillo II (Union Fenosa). Although this debt was assumed by Spanish banks in 1995, Iberdrola may be wary of investing in further risky nuclear projects. <ref>Spanish Banks to Assume Nuclear Debt, [http://www10.antenna.nl/wise/ Wise News Communique], 21 July, 1995.</ref>
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Iberdrola claims to be the world´s leading wind energy company and one of the largest operators in renewable energies.<ref> [http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBCONEMPGRANEMP Iberdrola website], accessed 29 August 2012.</ref>
  
==Renewable Expansion==
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The company’s renewable capacity exceeded 14,000MW in early 2012. Iberdrola says it is a leader in the wind power sector in Spain and the UK, holds second place in the USA, and has facilities in Brazil, Mexico, Germany, Portugal, Italy, France, and various countries of Eastern Europe.<ref> [https://www.iberdrola.es/webibd/gc/prod/en/doc/IA_InformeAnual2011.pdf Iberdrola Annual Report 2011] accessed 29 August 2012.</ref> According to its statistics, in Spain it has 5643MW installed; USA 5,366MW; 1,195MW in the UK and 1,536MW in the rest of the world. <ref> [http://www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBCONLINRENOVABLES&codCache=13462386021815549 Renewable Energy Business], Iberdrola website, accessed 29 August 2012</ref>
  
Iberdrola claims to be the world´s leading wind energy company and one of its largest operators in renewable energies. <ref>[http://www.iberdrola.es/wcorp/corporativa/iberdrola?IDPAG=ENENRENOVR Iberdrola website] (viewed 22.01.07) See also, [http://altenergyinvestor.advfn.com/iberdrola.html Alt energy Investor Website] (Viewed 23.01.07) </ref> It says it plans to invest 3.25 billion euros in renewable projects between now and 2009. The Company’s aim is to reach 7,000 MW of renewable energy during 2009, of which 1,450 MW will be located outside Spain, and 10,000MW by 2011. The Company is in the process of building its sixth wind farm in France, a wind energy project in Mexico and a solar photovoltaic facility in Spanish Province of Soria.  
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==ScottishPower==
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===Takeover approved===
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In 2006 the Spanish energy giant [[Iberdrola]] made an £11.6bn takeover bid for ScottishPower. The offer was formally approved by shareholders at an EGM on 30 March 2007, effectively creating Europe's third largest utility company.
  
At least part of Iberdrola’s expansion into renewables has been done by buying other companies. Iberdrola bought Community Energy Inc, in the US during 2006, to give it a platform to enter the US wind market quickly. Iberdrola were said to be: “uniquely poised to accelerate CEI’s delivery of wind energy generation to its utility partners and customers.<ref>[http://www.communityenergy.biz/pr/cei_pr_iberdrola.html IBERDROLA, World Leader in Renewable Energy, Enters the U.S. Market with the Forthcoming Acquisition of Community Energy, Inc], ''Community Energy Inc.'' Press Release, 2 May, 2006.</ref>
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The European Commission had cleared Iberdrola's proposed ScottishPower deal in mid-February 2007. <ref>Nick Bevens, [http://business.scotsman.com/index.cfm?id=252332007 EU gives ScottishPower takeover the green light] ''Scotsman'' 16 February, 2007.</ref> After a meeting between the Iberdrola management and Scotland’s First Minister, it became clear that the Spanish company was committed to the existing investment programme of ScottishPower at Longannet coal-fired station (to meet the requirements of the Large Combustion Plant Directive which imposes strict limits on sulphur dioxide and nitrogen oxide emissions) and in renewables. The First Minister said: “… most importantly for the longer term they have opened up the opportunity for us in Scotland to bid for and to secure further investment in Scotland in the energy industry”. <ref>[http://www.scotland.gov.uk/News/Releases/2006/12/05125052 Executive Meets with Iberdrola], ''Scottish Executive Press Release'', 5 December, 2006</ref>
  
==Scottish Power==
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===World leader in renewables===
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Iberdrola's claim to be the largest owner and operator of renewable energy facilities in the world, and its clear interest in wind energy may be the reason it bought [[ScottishPower]]. ScottishPower's vision was also to be a world leader in renewables. In 2011, [[ScottishPower Renewables]] became the first UK developer to reach an installed generating capacity of 1,000 MW. With a pipeline including 10,000 MW of offshore wind, and the 10 MW world-first tidal energy array in the Sound of Islay, ScottishPower Renewables is among the UK’s leading renewable energy developers.<ref> [http://www.scottishpowerrenewables.com/pages/about_us.asp Scottish Power Renewables website], accessed 29 August 2012. </ref>
  
The Company’s claim to be the largest owner and operator of renewable energy facilities in the world, and its clear interest in wind energy could be the reason it has been trying to buy the Scottish Utility, [[Scottish Power]]. Scottish Power, too, says its vision is to be a world leader in renewables. It is the biggest generator of onshore wind energy in the UK and is developing biomass and wave generation. <ref>[http://www.scottishpower.com/ Scottish Power Website], (viewed 23.01.07)</ref>
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===Caution over new nuclear build===
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ScottishPower had not demonstrated any great enthusiasm for new nuclear reactors in Scotland. In its response to the [[Department of Trade and Industry]]'s 2006 Energy Review consultation, the company cautioned against the government becoming too pro-nuclear because of the concern about being too dependent on imported gas for electricity generation. ScottishPower said it did not believe a major programme of nuclear construction was needed yet. It added that:
  
Scottish Power has not demonstrated any great enthusiasm for new nuclear reactors in Scotland. It has been reported to have no interest in nuclear generation. <ref>Ian McConnell, [http://pqasb.pqarchiver.com/smgpubs/1020956111.html?did=1020956111&FMT=ABS&FMTS=FT&date=Apr+14%2C+2006&author=IAN+McCONNELL&pub=The+Herald&desc=ScottishPower+warns+on+nuclear+Government+should+not+commit+to+major+build ''Scottish Power warns on nuclear Government should not commit to major build''], ''The Herald'', 14 April, 2007.</ref> In its response to the Department of Trade and Industry's energy review consultation, the Company cautioned against the government becoming too pro- nuclear just because it might be wary of being too dependent on imported gas for electricity generation. It said it did not believe there needs to be any major programme of nuclear construction announced as a result of the Energy Review. The Company goes on to say that in 2015, if the economics are right and progress on other low carbon technologies demand it, then new reactors could be considered. <ref>[http://www.scottishpower.com/uploads/SPEnergyReviewResponce130406.pdf Our Energy Challenge – Scottish Power Response] Scottish Power, April, 2006.</ref>
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:By 2020 there should be clearer evidence of the economics of new nuclear and of clean coal. There is no need to take premature action at this time that means the UK follows an irrevocable path that potentially abandons embryonic technologies that could emerge with some support as the solution of the future - clean coal being one of those technologies.<ref>[http://www.scottishpower.com/uploads/SPEnergyReviewResponce130406.pdf Our Energy Challenge – ScottishPower Response] ScottishPower, April, 2006</ref><ref>Ian McConnell, [http://pqasb.pqarchiver.com/smgpubs/1020956111.html?did=1020956111&FMT=ABS&FMTS=FT&date=Apr+14%2C+2006&author=IAN+McCONNELL&pub=The+Herald&desc=ScottishPower+warns+on+nuclear+Government+should+not+commit+to+major+build ''Scottish Power warns on nuclear government should not commit to major build''], ''The Herald'', 14 April, 2007.</ref>
  
It would be unfortunate if Iberdrola’s purchase of Scottish Power meant the utility joined other UK utilities in lobbying for a nuclear renaissance.
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===Cockenzie plans===
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In October 2011, Scottish Power received planning consent for a new 1000MW Combined Cycle Gas Turbine power station on the site of the existing Cockenzie coal power plant, in East Lothian. <ref> [http://www.scottishpower.com/PressReleases_2225.htm Scottish Power Press Release] 5 October 2011, accessed August 2012. </ref> The current coal power station is nearing the end of its operational life and will close in March 2013. <ref> [http://www.scottishpower.com/PressReleases_2311.htm Scottish Power Press Release] 15 March 2012, accessed 29 August 2012 </ref>
  
==Takeover Approved ==
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===Longannet===
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Scottish Power also owns and runs Longannet in Fife, Longannet, which is the UK's second largest coal-fired power station and Europe's third largest, and among the biggest polluters in the country. It has a capacity of 2,400MW and emits between seven million and eight million tonnes of carbon dioxide (CO2) a year. Plans for the UK's first carbon capture and storage facility at Longannet were dropped in October 2011. According to the Energy Secretary at the time, [[Chris Huhne]], the length of pipeline needed to take the CO2 to the undersea reservoirs made the Longannet scheme "unviable".<ref> [http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-15371258 Longannet carbon capture scheme scrapped], BBC 19 October 2011, accessed 29 August 2012. </ref>
  
The European Commission cleared the proposed acquisition of ScottishPower by Iberdrola in the middle of February 2007. <ref>Nick Bevens, [http://business.scotsman.com/index.cfm?id=252332007 EU gives Scottish Power takeover the green light] ''Scotsman'' 16 February, 2007.</ref> Investors are due to receive some Iberdrola shares plus 400p cash for each SP share. Scottish Power chairman, Charles Miller Smith, is expected to give his views on the future of the combined operation soon, now that the EC has given its verdict, in time for a meeting of shareholders to approve the takeover in early March. <ref>John Phelps, [http://www.sundayherald.com/business/businessnews/display.var.1136961.0.scottish_power_investors_hope_for_more_than_romance_this_valentines_day.php Scottish Power investors hope for more than romance this Valentine’s Day], ''Sunday Herald'', 21 January, 2007. </ref>
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==A merger made on the wind?==
  
After a meeting between the Iberdrola management and Scotland’s First Minister, it became clear that the Spanish Company is committed to the existing investment programme of Scottish Power at Longannet coal-fired station (to meet the requirements of the Large Combustion Plant Directive which imposes strict limits on sulphur dioxide and nitrogen oxide emissions) and in renewables. The First Minister said: “…most importantly for the longer term they have opened up the opportunity for us in Scotland to bid for and to secure further investment in Scotland in the energy industry”. <ref>[http://www.scotland.gov.uk/News/Releases/2006/12/05125052 Executive Meets with Iberdrola], ''Scottish Executive Press Release'', 5 December, 2006.</ref> There has even been some discussion of Iberdrola cleaning up emissions from the Cockenzie coal-fired power station, which Scottish Power has slated for closure in 2015, rather than attempting to meet the Large Combustion Plant Directive. <ref>Douglas Friedli [http://business.scotsman.com/topics.cfm?tid=1371&id=1871552006 Iberdrola to Spend £1.5bn on Greener Scottish Power], ''Scotland on Sunday'', 17 December, 2006.</ref>
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''Forbes Magazine'' said Scottish Power would fit well with Iberdrola. Scottish Power already had 14 wind farms throughout Britain and Ireland. Its US business, [[PPM Energy]], operated cogeneration power plants and wind farms. Iberdrola had already acquired two wind farms in Britain in 2006, and signed a tentative agreement to build a 1,000 megawatt wind farm in northern China. <ref>[http://www.forbes.com/markets/2006/11/09/iberdrola-scottish-power-markets-equity-cx_po_1109markets04.html Spanish Scottish Match in Thin Air] ''Forbes'', 8 November, 2006.</ref> It has also agreed to invest over $1 billion on wind farms in Turkey. <ref>[http://www.turkishweekly.net/news.php?id=40739 Spanish Iberdrola plans to build Wind Farms in Turkey], ''Turkish Weekly'', 6 November, 2006.</ref>  
  
==A Merger Made on the Wind?==
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At the time of the merger it was reported that [[ACS]], one of the world's largest building and services groups, was trying to increase its stake in Iberdrola from 10 per cent to 25 per cent to gain a decisive stake in the combined business, which would be the world's biggest renewable energy company. <ref>Douglas Friedli [http://scotlandonsunday.scotsman.com/business.cfm?id=1790512006 ACS targets 25% of Iberdrola] ''Scotland on Sunday'', 3 December, 2006.</ref> ACS had increased its share to over 14 per cent by January 2007. <ref>[http://www.forbes.com/business/feeds/afx/2007/01/23/afx3352260.html ACS takes Additional 2.3 pct of Iberdrola via Equity Swap Contract] ''Forbes'', 23 January, 2007.</ref>
  
Forbes Magazine says Scottish Power will fit well with Iberdrola. Scottish Power has 14 wind farms throughout Britain and Ireland. Its U.S. business, PPM Energy, operates cogeneration power plants and wind farms. Iberdrola already acquired two wind farms in Britain in 2006, and it has signed a tentative agreement to build a 1,000 megawatt wind farm in northern China. <ref>[http://www.forbes.com/markets/2006/11/09/iberdrola-scottish-power-markets-equity-cx_po_1109markets04.html Spanish Scottish Match in Thin Air] ''Forbes'', 8 November, 2006.</ref> It has also agreed to invest over $1 billion on wind farms in Turkey. <ref>[http://www.turkishweekly.net/news.php?id=40739 Spanish Iberdrola plans to build Wind Farms in Turkey], ''Turkish Weekly'', 6 November, 2006.</ref> Wind farm builder ACS is reported to be trying to increase its stake in Iberdrola from 10% to 25% in order to gain a decisive stake in the combined business, which would be the world's biggest renewable energy company. <ref>Douglas Friedli [http://scotlandonsunday.scotsman.com/business.cfm?id=1790512006 ACS targets 25% of Iberdrola] ''Scotland on Sunday'', 3 December, 2006.</ref> ACS had increased its share to over 14% by 23rd January 2007. <ref>[http://www.forbes.com/business/feeds/afx/2007/01/23/afx3352260.html ACS takes Additional 2.3 pct of Iberdrola via Equity Swap Contract] ''Forbes'', 23 January, 2007.</ref>
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However in April 2012 ACS sold a 3.7 percent stake in Iberdrola triggering speculation that the builder was reversing its initial strategy to gain control of the utility. Then in July ACS signed a three-year deal with [[Societe Generale]] to refinance a loan it used to buy part of a 14.85 percent stake in Iberdrola. ACS, headed by self-made billionaire Florentino Perez who also runs soccer club [[Real Madrid]], said it will take a decision on the future of its investment in Iberdrola in three years' time. <ref> [http://www.reuters.com/article/2012/07/13/us-acs-debt-idUSBRE86C0YH20120713 ACS refinancing deal provides some Iberdrola relief], Reuters 13 July 2012, accessed 29th August 2012. </ref>
  
In 2004, WWF ranked global power companies according to the amount of renewable energy and gas-fired CHP installed and planned. In Europe Iberdrola and Scottish Power came out top. <ref>[http://assets.panda.org/downloads/rankingpowerreportbranded.pdf Ranking Power: Scorecards for Electricity Companies] ''WWF Powerswitch Campaign'', November, 2004.</ref>
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In 2004, WWF ranked global power companies according to the amount of renewable energy and gas-fired CHP installed and planned. In Europe Iberdrola and ScottishPower came out top. <ref>[http://assets.panda.org/downloads/rankingpowerreportbranded.pdf Ranking Power: Scorecards for Electricity Companies] ''WWF Powerswitch Campaign'', November 2004.</ref>
  
 
==Notes==
 
==Notes==

Latest revision as of 01:29, 23 November 2012

Global warming.jpg This article is part of the Climate project of Spinwatch.

Iberdrola is a private multinational Spanish utility company, which owns ScottishPower in the UK. It is Spain's biggest power company and the world's largest wind generator.

Background

Iberdrola's £11.6bn takeover of ScottishPower was formally approved by shareholders on 30 March 2007, effectively creating Europe's third largest utility company.

The company has subsidiaries in approximately 40 countries, including Spain, Portugal, the United Kingdom, Germany, France, Italy, Greece, Russia, China, Egypt, Canada, Mexico, Brazil and the United States, among others. [1]

In 2011 Iberdrola had an installed capacity across the globe of 46,026MW of which 7.5 per cent was nuclear. It is the largest Spanish power company with an installed capacity in 2011 of 21,989 MW in Spain (excluding renewables), of which 3,373MW was nuclear.

Iberdrola is probably the world’s largest wind generator with 13,755MW of installed onshore wind capacity in 2012 across 23 countries. It also leads in offshore development with more than 6,300 MW under development in the UK and Germany as well as with licenses recently awarded in France. [2]

UK lobbying and meetings with Energy minister

Between 2010 and 2011, Iberdrola met five times with the UK Parliamentary Under-Secretary of State at the Department of Energy and Climate Change (DECC) Jonathan Marland to discuss 'energy issues'.[3]

A nuclear utility

Nuclear spin.png This article is part of the Nuclear Spin project of Spinwatch.

Iberdrola is a member of the World Nuclear Association,[4] the Spanish Nuclear Industry Forum, [5] and the American Nuclear Energy Institute. [6]

UK

None of Iberdrola’s 6,036 MW installed capacity in the UK (excluding renewables) in 2011 was nuclear. However, it is a 50 per cent joint owner with GDF Suez in the NuGen consortium, which plans to build a new nuclear station next to Sellafield in Cumbria. [7]

Spain

In theory the previous Spanish government was committed to phasing out nuclear power, but only "if circumstances permit", according to former Prime Minister Jose Luis Zapatero speaking to the Spanish parliament in May 2006. There was no specific timetable. Industry Minister, Jose Montilla, had even said the government would consider lifetime extensions for existing reactors. The nuclear industry in Spain was campaigning hard for the phase-out policy to be dropped. [8]

The November 2011 election brought about a change of government, which revisited an earlier decision to close Santa Mazria de Garona, allowing operation to continue until 2019. [9]

Iberdrola owns a share of seven Spanish nuclear reactors:

  • Santa Maria de Garona owned by Nuclenor which is a company jointly owned by Iberdrola and Endesa (Iberdrola’s share 50% of 446MW);
  • Trillo I (48%- 1003MW);
  • Asco II (15% - 992MW);
  • Vandellos II (22% - 1045MW);
  • Cofrentes (100% - 1063MW);
  • Almaraz 1 & 2 (53% of 947MW & 956MW). [10]

The Spanish nuclear phase-out dates back to 1984. This left three Spanish utilities - Iberdrola, Sevillana and Union Fenosa – with a total debt of US$2.6 billion for unfinished nuclear power projects. Five nuclear power stations were in various stages of construction when the moratorium was declared: Lemoniz I and II (Iberdrola) Valdecaballeros I and II (Sevillana) and Trillo II (Union Fenosa). Although this debt was assumed by Spanish banks in 1995, Iberdrola may be wary of investing in further risky nuclear projects. [11]

Iberdrola has substantial nuclear links abroad, mainly forged by its engineering division, which works on a range of power projects including nuclear jobs such as steam generator replacement in Mexico and construction in Romania.

Kalingrad and Russia

Iberdrola's engineering division also leads the company's potential involvement with the project for new reactors in the Russian exclave of Kaliningrad, which sits on the Baltic Sea between Poland and Lithuania. [12] RosEnergoAtom will be the majority shareholder in the Kaliningrad plant; 49 per cent will be available to private investors. Iberdrola is one of the utilities in talks with the Russians about taking a stake. [13] Iberdrola is already working at the Kola, Balakovo and Novovoronezh nuclear power plants in Russia.[14]

Romania

Romania's state-owned Nuclearelectrica is trying to complete two reactors: Cernavoda units 3 and 4. In November 2008 an investment agreement setting up a new project company, EnergoNuclear SA, was signed between Nuclearelectrica, with 51 per cent of the project, and Enel, CEZ, GDF Suez, RWE Power (each 9.15 per cent), Iberdrola (6.2 per cent) and ArcelorMittal Galati (6.2 per cent).

However, in 2011 Iberdrola withdrew from the project for commercial reasons. [15]

Mexico

In recent years Iberdrola may have been trying to downplay its connections with the nuclear industry, by referring to itself as the largest operator of renewable energy in the world. Yet it is a member of a consortium with France's Alstom, which won a contract to expand and modernise Mexico’s only nuclear plant at Laguna Verde. The upgrade is aimed at increasing Laguna Verde's capacity to 1,634 megawatts from 1,365 MW.[16]

In February 2007 the Federal Electricity Commission signed contracts with Iberdrola Engineering and Alstom to fit new turbines and generators to the Laguna Verde plant at a cost of US$ 605 million. The two reactors were then uprated progressively by 138 MWe each from 2008 to January 2011. Their operating life was also extended to 40 years. [17]

Renewable expansion

Iberdrola claims to be the world´s leading wind energy company and one of the largest operators in renewable energies.[18]

The company’s renewable capacity exceeded 14,000MW in early 2012. Iberdrola says it is a leader in the wind power sector in Spain and the UK, holds second place in the USA, and has facilities in Brazil, Mexico, Germany, Portugal, Italy, France, and various countries of Eastern Europe.[19] According to its statistics, in Spain it has 5643MW installed; USA 5,366MW; 1,195MW in the UK and 1,536MW in the rest of the world. [20]

ScottishPower

Takeover approved

In 2006 the Spanish energy giant Iberdrola made an £11.6bn takeover bid for ScottishPower. The offer was formally approved by shareholders at an EGM on 30 March 2007, effectively creating Europe's third largest utility company.

The European Commission had cleared Iberdrola's proposed ScottishPower deal in mid-February 2007. [21] After a meeting between the Iberdrola management and Scotland’s First Minister, it became clear that the Spanish company was committed to the existing investment programme of ScottishPower at Longannet coal-fired station (to meet the requirements of the Large Combustion Plant Directive which imposes strict limits on sulphur dioxide and nitrogen oxide emissions) and in renewables. The First Minister said: “… most importantly for the longer term they have opened up the opportunity for us in Scotland to bid for and to secure further investment in Scotland in the energy industry”. [22]

World leader in renewables

Iberdrola's claim to be the largest owner and operator of renewable energy facilities in the world, and its clear interest in wind energy may be the reason it bought ScottishPower. ScottishPower's vision was also to be a world leader in renewables. In 2011, ScottishPower Renewables became the first UK developer to reach an installed generating capacity of 1,000 MW. With a pipeline including 10,000 MW of offshore wind, and the 10 MW world-first tidal energy array in the Sound of Islay, ScottishPower Renewables is among the UK’s leading renewable energy developers.[23]

Caution over new nuclear build

ScottishPower had not demonstrated any great enthusiasm for new nuclear reactors in Scotland. In its response to the Department of Trade and Industry's 2006 Energy Review consultation, the company cautioned against the government becoming too pro-nuclear because of the concern about being too dependent on imported gas for electricity generation. ScottishPower said it did not believe a major programme of nuclear construction was needed yet. It added that:

By 2020 there should be clearer evidence of the economics of new nuclear and of clean coal. There is no need to take premature action at this time that means the UK follows an irrevocable path that potentially abandons embryonic technologies that could emerge with some support as the solution of the future - clean coal being one of those technologies.[24][25]

Cockenzie plans

In October 2011, Scottish Power received planning consent for a new 1000MW Combined Cycle Gas Turbine power station on the site of the existing Cockenzie coal power plant, in East Lothian. [26] The current coal power station is nearing the end of its operational life and will close in March 2013. [27]

Longannet

Scottish Power also owns and runs Longannet in Fife, Longannet, which is the UK's second largest coal-fired power station and Europe's third largest, and among the biggest polluters in the country. It has a capacity of 2,400MW and emits between seven million and eight million tonnes of carbon dioxide (CO2) a year. Plans for the UK's first carbon capture and storage facility at Longannet were dropped in October 2011. According to the Energy Secretary at the time, Chris Huhne, the length of pipeline needed to take the CO2 to the undersea reservoirs made the Longannet scheme "unviable".[28]

A merger made on the wind?

Forbes Magazine said Scottish Power would fit well with Iberdrola. Scottish Power already had 14 wind farms throughout Britain and Ireland. Its US business, PPM Energy, operated cogeneration power plants and wind farms. Iberdrola had already acquired two wind farms in Britain in 2006, and signed a tentative agreement to build a 1,000 megawatt wind farm in northern China. [29] It has also agreed to invest over $1 billion on wind farms in Turkey. [30]

At the time of the merger it was reported that ACS, one of the world's largest building and services groups, was trying to increase its stake in Iberdrola from 10 per cent to 25 per cent to gain a decisive stake in the combined business, which would be the world's biggest renewable energy company. [31] ACS had increased its share to over 14 per cent by January 2007. [32]

However in April 2012 ACS sold a 3.7 percent stake in Iberdrola triggering speculation that the builder was reversing its initial strategy to gain control of the utility. Then in July ACS signed a three-year deal with Societe Generale to refinance a loan it used to buy part of a 14.85 percent stake in Iberdrola. ACS, headed by self-made billionaire Florentino Perez who also runs soccer club Real Madrid, said it will take a decision on the future of its investment in Iberdrola in three years' time. [33]

In 2004, WWF ranked global power companies according to the amount of renewable energy and gas-fired CHP installed and planned. In Europe Iberdrola and ScottishPower came out top. [34]

Notes

  1. Reuters website, Iberdrola SA., accessed 29 August 2012
  2. Renewable Energy Business, Iberdrola website, accessed 29 August 2012.
  3. Who's Lobbying, Jonathan Marland, undated, acc 21 June 2012
  4. World Nuclear Association website
  5. Spanish Nuclear Industry Website
  6. By virtue of its membership of the Spanish Nuclear Industry Forum.Nuclear Energy Institute website, accessed 29 August 2012
  7. Liberalised Business, Iberdrola website, accessed 29 August 2012.
  8. Nuclear Monitor, 14 July, 2006.
  9. Nuclear Power in Spain World Nuclear Association Briefing July 2012, accessed 29 August 2012.
  10. Nuclear Power in Spain World Nuclear Association Briefing July 2012, accessed 29 August 2012.
  11. Spanish banks to assume nuclear debt, Wise News Communique, 21 July, 1995.
  12. Iberdrola looks for new build opportunities, World Nuclear News 6 August 2009, accessed 29 August 2012.
  13. Imminent construction of Baltic nuclear power plant, World Nuclear News 8 February 2012. Accessed 29 August 2012.
  14. Nuclear Power in Russia World Nuclear Association Country Briefings, 22 August 2012, accessed 29 August 2012.
  15. China may invest in Romanian reactors World Nuclear News 21 October 2011, accessed 29 August 2012.
  16. Mexico has Three Bids to Upgrade Nuclear Plant, Reuters, 19 January, 2007. Also: Alsom, Iberdrola poised to win Mexico Nuclear Power Plant Contract Forbes, 22 January, 2007. Platts Nuclear News Flashes, 2 March, 2007
  17. Nuclear Power in Mexico, World Nuclear Association Briefing, July 2012, accessed 29 August 2012.
  18. Iberdrola website, accessed 29 August 2012.
  19. Iberdrola Annual Report 2011 accessed 29 August 2012.
  20. Renewable Energy Business, Iberdrola website, accessed 29 August 2012
  21. Nick Bevens, EU gives ScottishPower takeover the green light Scotsman 16 February, 2007.
  22. Executive Meets with Iberdrola, Scottish Executive Press Release, 5 December, 2006
  23. Scottish Power Renewables website, accessed 29 August 2012.
  24. Our Energy Challenge – ScottishPower Response ScottishPower, April, 2006
  25. Ian McConnell, Scottish Power warns on nuclear government should not commit to major build, The Herald, 14 April, 2007.
  26. Scottish Power Press Release 5 October 2011, accessed August 2012.
  27. Scottish Power Press Release 15 March 2012, accessed 29 August 2012
  28. Longannet carbon capture scheme scrapped, BBC 19 October 2011, accessed 29 August 2012.
  29. Spanish Scottish Match in Thin Air Forbes, 8 November, 2006.
  30. Spanish Iberdrola plans to build Wind Farms in Turkey, Turkish Weekly, 6 November, 2006.
  31. Douglas Friedli ACS targets 25% of Iberdrola Scotland on Sunday, 3 December, 2006.
  32. ACS takes Additional 2.3 pct of Iberdrola via Equity Swap Contract Forbes, 23 January, 2007.
  33. ACS refinancing deal provides some Iberdrola relief, Reuters 13 July 2012, accessed 29th August 2012.
  34. Ranking Power: Scorecards for Electricity Companies WWF Powerswitch Campaign, November 2004.