- Title: GERMANY: Vattenfall agrees to sell German high-voltage grid
- Date: 13th March 2010
- Summary: PEITZ, GERMANY (ORIGINALLY 4:3) (MARCH 12, 2010) (REUTERS) VARIOUS OF VATTENFALL POWER PLANT WITH HIGH VOLTAGE POWER LINES (GOOD SHOTS OF CHIMNEYS BILLOWING SMOKE) (6 SHOTS)
- Embargoed: 28th March 2010 13:00
- Keywords:
- Location: Germany
- Country: Germany
- Topics: Industry,Energy
- Reuters ID: LVAEZJORCA95CPE7B2KSN8YP0K6O
- Story Text: Vattenfall, operator of Germany's fourth-largest utility, has agreed to sell its German high-voltage grid to Belgian peer Elia and Industry Funds Management (IMF) "because it is strategically right."
The operator of Germany's fourth-largest utility, Vattenfall, has agreed to sell its German high-voltage grid to Belgian peer Elia and Industry Funds Management, Vattenfall said in Berlin on Friday (March 12).
"We are selling because we believe that it is strategically right," the company's Europe boss, Tuomo Hatakka told reporters, adding "part of a good market design is to separate the grids from production."
The sale gives the Swedish state-owned Vattenfall power grid in eastern Germany an enterprise value -- the value of the asset plus its debt -- of around 800 million euros ($1.09 billion), according to sources.
Utilities are shedding profitable but state regulated energy grids in countries throughout Europe, including Italy, Spain and Britain, to cut debt and to focus on more profitable power markets in which they often operate in an oligopoly.
Strict regulation means that grids are often sold for less than what the value of their regulated assets is -- the value is determined as part of the regulatory regime to calculate the allowed returns.
Vattenfall's 9,700 kilometres of high-voltage lines in eastern Germany have a regulatory asset base of 1.2 billion euros, about 50 percent more than what it is sold for.
All German long-distance grids had been operated by the utilities that run the power plants in the respective region -- ensuring German users have fewer blackouts than any other users in Europe -- until E.ON sold its high-voltage grid last year.
With the sale of Vattenfall's grid, the responsibility to keep the power market functioning in half of the country lies in the hands of independent operators. - Copyright Holder: REUTERS
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