EON grows in the Spanish wind market by purchasing Energi E2
After being outmanouvered in their €43bn ($59bn) bid battle for Endesa, the country’s biggest electricity group, it is buying Energi E2 Renovables Ibericas, which operates wind farms in Spain and Portugal, from Denmark’s DONG Energy in a deal worth €722 million, or $996.7 million. The purchase price includes $353.4 million in assumed debt.
The company led by Wulf Bernotat outbid the also German utility RWE, a consortium formed by Unión Fenosa and Enel and the largest Portuguese utility, EDP (owners of Horizon Wind Energy).
The operation comes hard on the heels of its winning EU approval to buy Spanish power utility Viesgo from Enel SpA and to acquire additional generation capacity from Endesa SA, making it the fourth-largest player on the Spanish power market. All in all, things have not turned bad for E.ON in its Spanish saga. The company expects to have a generating capacity of 7 Gigawatts in Spain for 2010.
Energi E2 has wind, hydro and biomass generation facilities in operation in Spain and Portugal with net installed capacity of approximately 260 MW. It has further wind farms with an extra capacity of 560 megawatts planned for completion in the next four years.
“Energi E2 Renovables Ibericas ideally supplements our future activities in Spain” Chief Executive Wulf Bernotat said. “Wind power will play an important role in our future energy mix.”
This operation moves E.ON closer to its goal of 2,600 megawatts of total wind power. With yesterday’s deal, E.ON now has more than 700 MW of wind in operation and another 1,500 MW under development.
For E.ON, the purchase is strategically important: Spain and renewable energy are its two biggest growth areas as regulation gets tougher in its core German market.
E.ON‘s big renewable strategy, announced in May, is part of a major reorganization of the company that includes a new renewables unit, likely to be named E.ON Renewables. The new unit will oversee all of E.ON‘s green energy operations, with the exception of hydroelectricity.