How wind fits in a Gas Natural-EDP tie-up

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Ilaria Valtimora
July 10, 2017
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How wind fits in a Gas Natural-EDP tie-up

There is nothing quite like the drama of a major merger deal – and, in the last week, we have been treated to rumours of another one.

Spanish power and gas giant Gas Natural Fenosa is reportedly in talks about a merger with Portuguese utility Energias de Portugal. If this is to go anywhere then wind will play a leading role.

Such a transaction would create Europe’s fourth biggest utility by market value and with annual sales of around €35bn. Both sides have denied the reports but we can see why this would be an attractive match. Wind is one of the main reasons.

We are well aware of EDP’s interest in wind. However, Gas Natural’s plans to grow in renewables, with a particular focus on wind, are far less familiar. Let’s look at both.

EDP’s latest annual report showed that the company finished 2016 with 25GW of installed capacity in all energy types, of which 65% came from renewable sources, including wind farms. The utility is one of the largest wind power operators worldwide with a big presence in Portugal, Spain, the US and Brazil.

It is mainly active in wind through subsidiary EDP Renovaveis, in which it owns a 77.5% stake and is currently waiting for approval from European authorities to buy the remaining stake that it does not own. EDPR ended its first quarter this year with a portfolio of global installed capacity of 10.4GW, mainly onshore wind farms.

For EDP, the merger with Gas Natural would make sense as it grows its exposure in key markets where it is not established. Gas Natural has a strong presence in Latin America, in particular in Chile and Mexico, and EDP is established in Brazil and the US. That mix of markets should make the deal mutually advantageous.

That is not the only potential benefit for Gas Natural. The firm has been trying for the last few years to diversify its business, which is mainly focused on gas and electricity distribution, and to increase its presence in renewables, particularly wind. Working with an established player in wind like EDP can support its growth so far.

In 2010, it created a new subsidiary, Gas Natural Fenosa Renovables, to be the hub of its green energy generation business with its major focus in Europe. At the end of 2016, the company had a consolidated total installed capacity of over 1.1GW, of which 979MW came from wind energy, 110MW from hydroelectric plants and 15MW from solar energy. Most of this is in Spain.

The company also owns another arm, completely dedicated to overseas energy projects, called Global Power Generation, which has an installed capacity in wind farms of almost 530MW in Mexico, Chile and Australia.

And Gas Natural was among the winning companies of Spain’s renewable energy auction which was held in May and in which the company won the rights to build around 667MW of new wind farms. This is part of Gas Natural’s strategy to add at least 2.5GW of new wind energy capacity by 2020.

Finally, the Spanish firm has also recently benefitted from a €450m loan from the European Investment Bank to finance it electricity distribution business as well as new wind energy projects in Spain.

Gas Natural is a huge company, but it is still a small player in wind compared to EDP. A merger would therefore enable it to become a more recognised player in wind, while EDP would gain access to even bigger financial resources. With a major presence in Europe, as well as North America and Latin America, it could be huge.

But such deals are rarely quick or easy, and both companies have denied that they are in talks. We will find out soon if this drama has a happy ending.

There is nothing quite like the drama of a major merger deal – and, in the last week, we have been treated to rumours of another one.

Spanish power and gas giant Gas Natural Fenosa is reportedly in talks about a merger with Portuguese utility Energias de Portugal. If this is to go anywhere then wind will play a leading role.

Such a transaction would create Europe’s fourth biggest utility by market value and with annual sales of around €35bn. Both sides have denied the reports but we can see why this would be an attractive match. Wind is one of the main reasons.

We are well aware of EDP’s interest in wind. However, Gas Natural’s plans to grow in renewables, with a particular focus on wind, are far less familiar. Let’s look at both.

EDP’s latest annual report showed that the company finished 2016 with 25GW of installed capacity in all energy types, of which 65% came from renewable sources, including wind farms. The utility is one of the largest wind power operators worldwide with a big presence in Portugal, Spain, the US and Brazil.

It is mainly active in wind through subsidiary EDP Renovaveis, in which it owns a 77.5% stake and is currently waiting for approval from European authorities to buy the remaining stake that it does not own. EDPR ended its first quarter this year with a portfolio of global installed capacity of 10.4GW, mainly onshore wind farms.

For EDP, the merger with Gas Natural would make sense as it grows its exposure in key markets where it is not established. Gas Natural has a strong presence in Latin America, in particular in Chile and Mexico, and EDP is established in Brazil and the US. That mix of markets should make the deal mutually advantageous.

That is not the only potential benefit for Gas Natural. The firm has been trying for the last few years to diversify its business, which is mainly focused on gas and electricity distribution, and to increase its presence in renewables, particularly wind. Working with an established player in wind like EDP can support its growth so far.

In 2010, it created a new subsidiary, Gas Natural Fenosa Renovables, to be the hub of its green energy generation business with its major focus in Europe. At the end of 2016, the company had a consolidated total installed capacity of over 1.1GW, of which 979MW came from wind energy, 110MW from hydroelectric plants and 15MW from solar energy. Most of this is in Spain.

The company also owns another arm, completely dedicated to overseas energy projects, called Global Power Generation, which has an installed capacity in wind farms of almost 530MW in Mexico, Chile and Australia.

And Gas Natural was among the winning companies of Spain’s renewable energy auction which was held in May and in which the company won the rights to build around 667MW of new wind farms. This is part of Gas Natural’s strategy to add at least 2.5GW of new wind energy capacity by 2020.

Finally, the Spanish firm has also recently benefitted from a €450m loan from the European Investment Bank to finance it electricity distribution business as well as new wind energy projects in Spain.

Gas Natural is a huge company, but it is still a small player in wind compared to EDP. A merger would therefore enable it to become a more recognised player in wind, while EDP would gain access to even bigger financial resources. With a major presence in Europe, as well as North America and Latin America, it could be huge.

But such deals are rarely quick or easy, and both companies have denied that they are in talks. We will find out soon if this drama has a happy ending.

There is nothing quite like the drama of a major merger deal – and, in the last week, we have been treated to rumours of another one.

Spanish power and gas giant Gas Natural Fenosa is reportedly in talks about a merger with Portuguese utility Energias de Portugal. If this is to go anywhere then wind will play a leading role.

Such a transaction would create Europe’s fourth biggest utility by market value and with annual sales of around €35bn. Both sides have denied the reports but we can see why this would be an attractive match. Wind is one of the main reasons.

We are well aware of EDP’s interest in wind. However, Gas Natural’s plans to grow in renewables, with a particular focus on wind, are far less familiar. Let’s look at both.

EDP’s latest annual report showed that the company finished 2016 with 25GW of installed capacity in all energy types, of which 65% came from renewable sources, including wind farms. The utility is one of the largest wind power operators worldwide with a big presence in Portugal, Spain, the US and Brazil.

It is mainly active in wind through subsidiary EDP Renovaveis, in which it owns a 77.5% stake and is currently waiting for approval from European authorities to buy the remaining stake that it does not own. EDPR ended its first quarter this year with a portfolio of global installed capacity of 10.4GW, mainly onshore wind farms.

For EDP, the merger with Gas Natural would make sense as it grows its exposure in key markets where it is not established. Gas Natural has a strong presence in Latin America, in particular in Chile and Mexico, and EDP is established in Brazil and the US. That mix of markets should make the deal mutually advantageous.

That is not the only potential benefit for Gas Natural. The firm has been trying for the last few years to diversify its business, which is mainly focused on gas and electricity distribution, and to increase its presence in renewables, particularly wind. Working with an established player in wind like EDP can support its growth so far.

In 2010, it created a new subsidiary, Gas Natural Fenosa Renovables, to be the hub of its green energy generation business with its major focus in Europe. At the end of 2016, the company had a consolidated total installed capacity of over 1.1GW, of which 979MW came from wind energy, 110MW from hydroelectric plants and 15MW from solar energy. Most of this is in Spain.

The company also owns another arm, completely dedicated to overseas energy projects, called Global Power Generation, which has an installed capacity in wind farms of almost 530MW in Mexico, Chile and Australia.

And Gas Natural was among the winning companies of Spain’s renewable energy auction which was held in May and in which the company won the rights to build around 667MW of new wind farms. This is part of Gas Natural’s strategy to add at least 2.5GW of new wind energy capacity by 2020.

Finally, the Spanish firm has also recently benefitted from a €450m loan from the European Investment Bank to finance it electricity distribution business as well as new wind energy projects in Spain.

Gas Natural is a huge company, but it is still a small player in wind compared to EDP. A merger would therefore enable it to become a more recognised player in wind, while EDP would gain access to even bigger financial resources. With a major presence in Europe, as well as North America and Latin America, it could be huge.

But such deals are rarely quick or easy, and both companies have denied that they are in talks. We will find out soon if this drama has a happy ending.

There is nothing quite like the drama of a major merger deal – and, in the last week, we have been treated to rumours of another one.

Spanish power and gas giant Gas Natural Fenosa is reportedly in talks about a merger with Portuguese utility Energias de Portugal. If this is to go anywhere then wind will play a leading role.

Such a transaction would create Europe’s fourth biggest utility by market value and with annual sales of around €35bn. Both sides have denied the reports but we can see why this would be an attractive match. Wind is one of the main reasons.

We are well aware of EDP’s interest in wind. However, Gas Natural’s plans to grow in renewables, with a particular focus on wind, are far less familiar. Let’s look at both.

EDP’s latest annual report showed that the company finished 2016 with 25GW of installed capacity in all energy types, of which 65% came from renewable sources, including wind farms. The utility is one of the largest wind power operators worldwide with a big presence in Portugal, Spain, the US and Brazil.

It is mainly active in wind through subsidiary EDP Renovaveis, in which it owns a 77.5% stake and is currently waiting for approval from European authorities to buy the remaining stake that it does not own. EDPR ended its first quarter this year with a portfolio of global installed capacity of 10.4GW, mainly onshore wind farms.

For EDP, the merger with Gas Natural would make sense as it grows its exposure in key markets where it is not established. Gas Natural has a strong presence in Latin America, in particular in Chile and Mexico, and EDP is established in Brazil and the US. That mix of markets should make the deal mutually advantageous.

That is not the only potential benefit for Gas Natural. The firm has been trying for the last few years to diversify its business, which is mainly focused on gas and electricity distribution, and to increase its presence in renewables, particularly wind. Working with an established player in wind like EDP can support its growth so far.

In 2010, it created a new subsidiary, Gas Natural Fenosa Renovables, to be the hub of its green energy generation business with its major focus in Europe. At the end of 2016, the company had a consolidated total installed capacity of over 1.1GW, of which 979MW came from wind energy, 110MW from hydroelectric plants and 15MW from solar energy. Most of this is in Spain.

The company also owns another arm, completely dedicated to overseas energy projects, called Global Power Generation, which has an installed capacity in wind farms of almost 530MW in Mexico, Chile and Australia.

And Gas Natural was among the winning companies of Spain’s renewable energy auction which was held in May and in which the company won the rights to build around 667MW of new wind farms. This is part of Gas Natural’s strategy to add at least 2.5GW of new wind energy capacity by 2020.

Finally, the Spanish firm has also recently benefitted from a €450m loan from the European Investment Bank to finance it electricity distribution business as well as new wind energy projects in Spain.

Gas Natural is a huge company, but it is still a small player in wind compared to EDP. A merger would therefore enable it to become a more recognised player in wind, while EDP would gain access to even bigger financial resources. With a major presence in Europe, as well as North America and Latin America, it could be huge.

But such deals are rarely quick or easy, and both companies have denied that they are in talks. We will find out soon if this drama has a happy ending.

There is nothing quite like the drama of a major merger deal – and, in the last week, we have been treated to rumours of another one.

Spanish power and gas giant Gas Natural Fenosa is reportedly in talks about a merger with Portuguese utility Energias de Portugal. If this is to go anywhere then wind will play a leading role.

Such a transaction would create Europe’s fourth biggest utility by market value and with annual sales of around €35bn. Both sides have denied the reports but we can see why this would be an attractive match. Wind is one of the main reasons.

We are well aware of EDP’s interest in wind. However, Gas Natural’s plans to grow in renewables, with a particular focus on wind, are far less familiar. Let’s look at both.

EDP’s latest annual report showed that the company finished 2016 with 25GW of installed capacity in all energy types, of which 65% came from renewable sources, including wind farms. The utility is one of the largest wind power operators worldwide with a big presence in Portugal, Spain, the US and Brazil.

It is mainly active in wind through subsidiary EDP Renovaveis, in which it owns a 77.5% stake and is currently waiting for approval from European authorities to buy the remaining stake that it does not own. EDPR ended its first quarter this year with a portfolio of global installed capacity of 10.4GW, mainly onshore wind farms.

For EDP, the merger with Gas Natural would make sense as it grows its exposure in key markets where it is not established. Gas Natural has a strong presence in Latin America, in particular in Chile and Mexico, and EDP is established in Brazil and the US. That mix of markets should make the deal mutually advantageous.

That is not the only potential benefit for Gas Natural. The firm has been trying for the last few years to diversify its business, which is mainly focused on gas and electricity distribution, and to increase its presence in renewables, particularly wind. Working with an established player in wind like EDP can support its growth so far.

In 2010, it created a new subsidiary, Gas Natural Fenosa Renovables, to be the hub of its green energy generation business with its major focus in Europe. At the end of 2016, the company had a consolidated total installed capacity of over 1.1GW, of which 979MW came from wind energy, 110MW from hydroelectric plants and 15MW from solar energy. Most of this is in Spain.

The company also owns another arm, completely dedicated to overseas energy projects, called Global Power Generation, which has an installed capacity in wind farms of almost 530MW in Mexico, Chile and Australia.

And Gas Natural was among the winning companies of Spain’s renewable energy auction which was held in May and in which the company won the rights to build around 667MW of new wind farms. This is part of Gas Natural’s strategy to add at least 2.5GW of new wind energy capacity by 2020.

Finally, the Spanish firm has also recently benefitted from a €450m loan from the European Investment Bank to finance it electricity distribution business as well as new wind energy projects in Spain.

Gas Natural is a huge company, but it is still a small player in wind compared to EDP. A merger would therefore enable it to become a more recognised player in wind, while EDP would gain access to even bigger financial resources. With a major presence in Europe, as well as North America and Latin America, it could be huge.

But such deals are rarely quick or easy, and both companies have denied that they are in talks. We will find out soon if this drama has a happy ending.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.