Austrian utility Verbund has reinforced its position as a leading producer of hydro power in Europe through a deal to acquire 13 power plants in Germany from E.On.
Verbund was the successful bidder in a competitive tendering process held by E.On, which is selling generating capacity in Germany as part of a deal with the European Commission. The 13 hydropower plants are located along the Bavarian part of the River Inn and have a combined capacity of 312 MW.
The acquisition price consists of cash plus a 20-year electricity purchase and service contract for Verbund’s Zemm-Ziller group of pumped storage power plants in Austria. Verbund will continue to own and operate these plants while E.On will be able to make use of procurement rights for around 318 MW of the plants’ capacity.
Verbund says that it will establish a subsidiary company in Germany to operate the Inn hydropower plants and that it intends to offer a stake of up to 30 per cent in this company to interested Bavarian municipalities. The 13 plants have an annual output of around 1800 GWh.
The acquisition of the Inn hydropower plants will help to support Verbund’s retail and trading activities in Germany, which accounts for 40 per cent of the group’s total sales volume. The company is also implementing an international growth strategy, which involves the acquisition and construction of hydropower assets across Europe.
The deal with Verbund brings E.On’s generating capacity sale agreements to 3200 MW. In December last year it concluded deals with Belgium’s Electrabel and EnBW of Germany to sell a total of 2200 MW of capacity.
E.On reached an agreement with the European Commission last year to sell 5000 MW of generating capacity in Germany as well as its high voltage transmission network in order to improve the competitive landscape in the country’s electricity market.
Verbund owns and operates hydropower plants in Austria with a total capacity of over 6600 MW and also has around 500 MW of new capacity under construction. The company is also looking to acquire hydropower assets in France and is planning the construction of around 1000 MW of hydropower capacity in Turkey.
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