State-owned Swedish energy group Vattenfall announced on Friday that it would sell its high-voltage power grid to Belgian firm Elia and Australia's Industry Funds Management. The sale was priced at 810 million euros ($1.1 billion), with 60 percent going to Elia, a power network management company, and the rest going to infrastructure specialist IFM. "The sale reinforces our position in the perspective of participating in the constitution of a true European energy market," Elia chief Daniel Dobbeni said. Vattenfall's head of European activities, Tuomo Hatakka, said at a news conference that the grid was strategic because "it links vast offshore wind farms in the Baltic and North Seas with consumer industries in northern Germany."...Utilities across Europe have sold off lucrative but state-regulated power grids in favor of more profitable energy markets, where limited competition often leads to a market oligopoly. Last month, German's largest power company E.ON sold its grid to Dutch group TenneT for 1.1 billion euros.
State-owned Swedish energy group Vattenfall announced on Friday that it would sell its high-voltage power grid to Belgian firm Elia and Australia's Industry Funds Management.
The sale was priced at 810 million euros ($1.1 billion), with 60 percent going to Elia, a power network management company, and the rest going to infrastructure specialist IFM.
"The sale reinforces our position in the perspective of participating in the constitution of a true European energy market," Elia chief Daniel Dobbeni said.
Vattenfall's head of European activities, Tuomo Hatakka, said at a news conference that the grid was strategic because "it links vast offshore wind farms in the Baltic and North Seas with consumer industries in northern Germany."
...Utilities across Europe have sold off lucrative but state-regulated power grids in favor of more profitable energy markets, where limited competition often leads to a market oligopoly. Last month, German's largest power company E.ON sold its grid to Dutch group TenneT for 1.1 billion euros.
The core argument for unbundling was that networks were used by incumbents to limit access to others, protect their position and restrict competition. The reason why the companies are now selling, after successfully fighting off unbundling, is that networks have been re/de/regulated to a situation where they effectively can no longer be used by networks to restrict competition, and they are not that profitable either. So they no longer have strategic value, and they use up capital at a time when these companies are going to need billions to invest in new generation capacity ,starting ith offshore wind.
So they are selling. Which means that unbundling won in the end. If we end up with one pan-European coordinated grid, it may turn out to be an okay result (because a continent-wide grid is a lot more valuable - to ensure safety of supply, to accomodate renewables, and to bring electricity prices down - than disparate national grids); if not, then we'll have the worst of both worlds - various competition islands (ie not very effective ones) with little ability to plan infrastructure strategically (ie dangerous for the long term). Wind power
