Tue, May 02, 2017 - Page 11 News List

Vattenfall enters British energy market

BREXIT NOT AN ISSUE:The firm is the latest foreign publicly owned entity to join the lucrative UK market with a plan to sell energy from wind farms to big business

The Guardian

A state-owned Swedish company has become the latest European firm to enter Britain’s lucrative energy market, as the kingdom’s appeal to continental power suppliers shows no sign of abating after the Brexit vote.

Vattenfall AB, which is 100 percent controlled by the Swedish government, is launching its first foray into British energy supply as it joins a competitive field of European players including Electricite de France SA (EDF), German-owned E.ON SE, Npower Ltd and Spanish-backed ScottishPower Ltd.

Vattenfall has already made inroads in Britain by building several wind farms, including a North Sea project near Aberdeen and Wales’ largest offshore wind farm which is due to complete next year.

Now, in what Vattenfall has described as a vote of confidence in post-referendum Britain, the firm is to sell its renewable power from the wind farms direct to business customers.

“Long term we don’t see that this [Brexit] as changing the basic prerequisite for doing business together. We find the UK to be an attractive market for us now and going forward, and we will continue to invest in the market,” Vattenfall executive Anna Borg said.

Vattenfall follows established European players such as EDF and E.ON, but also Danish state-owned Dong Energy A/S, which sells its wind power to corporate clients, and Dutch firm Eneco Holding NV, which supplies business customers such as Heineken NV and Unilever PLC.

France’s Engie Group is also attempting to muscle in on the consumer market and trying to woo households with a tariff that tracks wholesale power prices.

Borg said European power companies are attracted to the British market because of two fundamentals — tight margins between energy — and demand which means a constant appetite for new entrants and Britain’s legally enshrined climate targets, which are to remain when the kingdom leaves the EU and ensure demand for energy generated by renewables or nuclear.

The combination, she said, means the government is supporting investment in new plants and requires energy from low-carbon entrants. Vattenfall believes its portfolio of renewable power and the confidence instilled by dealing with an established player would help it win over corporate customers wanting to burnish their green credentials.

Borg said Vattenfall is a state-owned company which has been around for 100 years and is here to stay.

Vattenfall’s decision to sell its German coal business last year to focus on green energy also showed it was capable of transforming, Borg added.

While Vattenfall is not yet naming its first customers, it said it is in talks with British retailers, manufacturing industries and data center operators.

Borg would not be drawn on whether the Swedish firm was considering making a play for the consumer market, which is dominated by six big energy suppliers, four of which are owned by European energy companies.

“It’s too early to say. We will see what opportunities arise,” she said.

However, the prospect of price caps being imposed on household energy bills, as promised by Theresa May’s Conservative Party, would not deter Vattenfall.

“In general of course, price regulation is complicated and difficult in a market that is supposed to be deregulated, but we are used to managing a lot of regulatory issues in all the markets we operate in, so it doesn’t change our willingness,” Borg said.

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