UPDATE: E.ON,Abengoa To Build 2 Thermal Solar Plants In Spain
(Adds detail.)
DUESSELDORF -(Dow Jones)- E.ON AG (EOAN.XE) and Abengoa SA (ABG.MC) plan to
jointly invest EUR550 million to build two thermal solar power plants in Spain,
E.ON said Wednesday.
The companies will share the investment and running of the plants equally.
The move marks E.ON's entry into the thermal solar power market. If its
cooperation with Spanish solar company Abengoa proves successful, Germany's
largest utility by market value plans to pursue more projects with Abengoa in
Spain and the U.S., E.ON said.
The Duesseldorf-based power and gas utility said it will join Abengoa in
building two thermal power plants near the Spanish city of Seville. Each of the
power plants will have a power generation capacity of 50 megawatts. They are
expected to be operational in 2011 and 2012, E.ON said.
Once operational, the power plants will produce 190 gigawatt hours of
electricity a year, enough to supply 52,000 households, E.ON said.
Thermal solar power combines renewable energy and conventional electricity
generation technologies. Sunlight is bundled with mirrors to heat a liquid. That
in turn drives a steam power turbine, which is used in conventional power
plants.
Frank Mastiaux, chief executive of E.ON's renewable energy unit E.ON Climate &
Renewables, said that his company isn't acting as just a financial investor in
the project. E.ON is also contributing its expertise in conventional electricity
generation, while Abengoa adds its knowledge about thermal solar power plants,
he said.
"Solar energy will be the next strong pillar in E.ON's renewables portfolio.
Our entry into concentrating solar power complements our recent moves into the
photovoltaic business," Mastiaux said.
E.ON and Abengoa are also among the partners in the Desertec Project, which
evaluates options to build thermal solar power plants in the Sahara desert in
North Africa.
So far, E.ON's renewable energy activities have focused primarily on wind
power. Earlier this year, E.ON opened its first solar power farm in France that
uses photovoltaic technology.
Over the past year, the company had repeatedly stated its interest in thermal
solar power investment and said an announcement was imminent.
Mastiaux Wednesday said that the delay was related to uncertainty over
subsidies for thermal solar power plants in Spain.
The Spanish government recently set feed-in tariffs for the power plants like
those planned by E.ON and Abengoa at EUR0.27 per kilowatt hour over a 25-year
period.
Generation costs of thermal solar power plants range between EUR0.15 and
EUR0.23 per kilowatt hour, Mastiaux said.
E.ON has an installed renewable power generation capacity of around 3
gigawatts and plans to increase this to around 10 gigawatts by 2015. For this,
the company plans to invest around EUR8 billion between 2007 and 2011.
The joint venture with E.ON is Abengoa's first cooperation with another
company on developing solar projects, which are a strategic business for the
Spanish company.
"The cooperation with E.ON will allow us to maintain our pace of growth in
thermosolar energy in coming years," Santiago Seage, Chief Executive of Abengoa
Solar said at a press conference in Madrid Wednesday.
Abengoa is one of the main thermosolar power companies in the world. It
currently has seven plants under construction in Spain with a joint capacity to
generate 350 megawatts in electricity. Abengoa said it will start building the
world's biggest thermosolar plant in the U.S. next year, with a capacity of 280
MW.
Company Web sites: www.eon.com; www.abengoa.com
-By Martin Rapp, Dow Jones Newswires; +49 211 13 87 214; martin.rapp@
dowjones.com
(Juan Montes in Madrid contributed to this article)
(END) Dow Jones Newswires
11-25-091149ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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