Investment Disconnect

Topics
No items found.
Adam Barber
August 17, 2012
This content is from our archive. Some formatting or links may be broken.
This content is from our archive. Some formatting or links may be broken.
Investment Disconnect

It’s been a week in which Dutch-owned grid operator TenneT became the popular whipping boy as the challenge of German offshore wind connections rose again to the fore.

As German grid regulator BnetzA bought a case against TenneT following a complaint by German wind developer, Windreich, over a connection issue, it brought into focus the complexity of having a myriad of actors attempting to deliver a common goal.

It also warrants a look at some broader themes including the privatisation of the energy infrastructure and the ability of private firms, with shareholders to answer to, to provide the best service.

Most commentators will suggest that privatisation frees the state from the burden of providing hideously expensive services. French state railway business, SNCF, for example, runs consistently at a loss and has to be heavily subsidised.

Conversely, though, one has to ask the question as to how enthusiastic the Chinese investors in Thames Water are in having to spend a huge amount in upgrading the UK’s ancient water infrastructure and stopping leaks that see roughly 500million litres of water lost per year.

It’s an argument that returned to plain view in the UK this week following the failure of Richard Branson’s Virgin Trains business to secure operating rights for the West Coast Mainline.

The tender was handed to First Great Western, following the firm’s rumoured ability to put in a bid of an extra £1.5billion and £200million in guarantees over and above the Virgin proposal.

In the long-privatised railway business, and with a Government looking for the biggest return, the First Great Western bid was always going to be a winner.

But it raises questions as to whether the highest bidder is always the most suitable candidate for the job. Something we will undoubtedly see played out in the renewable energy industry.

Returning to the issue at hand, TenneT - a Dutch firm that bought the German grid from E.ON in 2009 - might not have the drive to stretch itself to raise the 15 billion Euros it is estimated to cost to connect German offshore wind farms to the national grid.

There are reports that the German Government would be keen to see TenneT sell its German grid business to some German insurance firms, such as Munich Re, which this week bought three UK onshore wind farms.

This would in theory free up the funds that the industry needs, whilst passing control to a domestic business.

Whatever happens in the coming months it’s not a situation that the developers, TenneT or the German offshore wind market can tolerate indefinitely.

It’s been a week in which Dutch-owned grid operator TenneT became the popular whipping boy as the challenge of German offshore wind connections rose again to the fore.

As German grid regulator BnetzA bought a case against TenneT following a complaint by German wind developer, Windreich, over a connection issue, it brought into focus the complexity of having a myriad of actors attempting to deliver a common goal.

It also warrants a look at some broader themes including the privatisation of the energy infrastructure and the ability of private firms, with shareholders to answer to, to provide the best service.

Most commentators will suggest that privatisation frees the state from the burden of providing hideously expensive services. French state railway business, SNCF, for example, runs consistently at a loss and has to be heavily subsidised.

Conversely, though, one has to ask the question as to how enthusiastic the Chinese investors in Thames Water are in having to spend a huge amount in upgrading the UK’s ancient water infrastructure and stopping leaks that see roughly 500million litres of water lost per year.

It’s an argument that returned to plain view in the UK this week following the failure of Richard Branson’s Virgin Trains business to secure operating rights for the West Coast Mainline.

The tender was handed to First Great Western, following the firm’s rumoured ability to put in a bid of an extra £1.5billion and £200million in guarantees over and above the Virgin proposal.

In the long-privatised railway business, and with a Government looking for the biggest return, the First Great Western bid was always going to be a winner.

But it raises questions as to whether the highest bidder is always the most suitable candidate for the job. Something we will undoubtedly see played out in the renewable energy industry.

Returning to the issue at hand, TenneT - a Dutch firm that bought the German grid from E.ON in 2009 - might not have the drive to stretch itself to raise the 15 billion Euros it is estimated to cost to connect German offshore wind farms to the national grid.

There are reports that the German Government would be keen to see TenneT sell its German grid business to some German insurance firms, such as Munich Re, which this week bought three UK onshore wind farms.

This would in theory free up the funds that the industry needs, whilst passing control to a domestic business.

Whatever happens in the coming months it’s not a situation that the developers, TenneT or the German offshore wind market can tolerate indefinitely.

It’s been a week in which Dutch-owned grid operator TenneT became the popular whipping boy as the challenge of German offshore wind connections rose again to the fore.

As German grid regulator BnetzA bought a case against TenneT following a complaint by German wind developer, Windreich, over a connection issue, it brought into focus the complexity of having a myriad of actors attempting to deliver a common goal.

It also warrants a look at some broader themes including the privatisation of the energy infrastructure and the ability of private firms, with shareholders to answer to, to provide the best service.

Most commentators will suggest that privatisation frees the state from the burden of providing hideously expensive services. French state railway business, SNCF, for example, runs consistently at a loss and has to be heavily subsidised.

Conversely, though, one has to ask the question as to how enthusiastic the Chinese investors in Thames Water are in having to spend a huge amount in upgrading the UK’s ancient water infrastructure and stopping leaks that see roughly 500million litres of water lost per year.

It’s an argument that returned to plain view in the UK this week following the failure of Richard Branson’s Virgin Trains business to secure operating rights for the West Coast Mainline.

The tender was handed to First Great Western, following the firm’s rumoured ability to put in a bid of an extra £1.5billion and £200million in guarantees over and above the Virgin proposal.

In the long-privatised railway business, and with a Government looking for the biggest return, the First Great Western bid was always going to be a winner.

But it raises questions as to whether the highest bidder is always the most suitable candidate for the job. Something we will undoubtedly see played out in the renewable energy industry.

Returning to the issue at hand, TenneT - a Dutch firm that bought the German grid from E.ON in 2009 - might not have the drive to stretch itself to raise the 15 billion Euros it is estimated to cost to connect German offshore wind farms to the national grid.

There are reports that the German Government would be keen to see TenneT sell its German grid business to some German insurance firms, such as Munich Re, which this week bought three UK onshore wind farms.

This would in theory free up the funds that the industry needs, whilst passing control to a domestic business.

Whatever happens in the coming months it’s not a situation that the developers, TenneT or the German offshore wind market can tolerate indefinitely.

It’s been a week in which Dutch-owned grid operator TenneT became the popular whipping boy as the challenge of German offshore wind connections rose again to the fore.

As German grid regulator BnetzA bought a case against TenneT following a complaint by German wind developer, Windreich, over a connection issue, it brought into focus the complexity of having a myriad of actors attempting to deliver a common goal.

It also warrants a look at some broader themes including the privatisation of the energy infrastructure and the ability of private firms, with shareholders to answer to, to provide the best service.

Most commentators will suggest that privatisation frees the state from the burden of providing hideously expensive services. French state railway business, SNCF, for example, runs consistently at a loss and has to be heavily subsidised.

Conversely, though, one has to ask the question as to how enthusiastic the Chinese investors in Thames Water are in having to spend a huge amount in upgrading the UK’s ancient water infrastructure and stopping leaks that see roughly 500million litres of water lost per year.

It’s an argument that returned to plain view in the UK this week following the failure of Richard Branson’s Virgin Trains business to secure operating rights for the West Coast Mainline.

The tender was handed to First Great Western, following the firm’s rumoured ability to put in a bid of an extra £1.5billion and £200million in guarantees over and above the Virgin proposal.

In the long-privatised railway business, and with a Government looking for the biggest return, the First Great Western bid was always going to be a winner.

But it raises questions as to whether the highest bidder is always the most suitable candidate for the job. Something we will undoubtedly see played out in the renewable energy industry.

Returning to the issue at hand, TenneT - a Dutch firm that bought the German grid from E.ON in 2009 - might not have the drive to stretch itself to raise the 15 billion Euros it is estimated to cost to connect German offshore wind farms to the national grid.

There are reports that the German Government would be keen to see TenneT sell its German grid business to some German insurance firms, such as Munich Re, which this week bought three UK onshore wind farms.

This would in theory free up the funds that the industry needs, whilst passing control to a domestic business.

Whatever happens in the coming months it’s not a situation that the developers, TenneT or the German offshore wind market can tolerate indefinitely.

It’s been a week in which Dutch-owned grid operator TenneT became the popular whipping boy as the challenge of German offshore wind connections rose again to the fore.

As German grid regulator BnetzA bought a case against TenneT following a complaint by German wind developer, Windreich, over a connection issue, it brought into focus the complexity of having a myriad of actors attempting to deliver a common goal.

It also warrants a look at some broader themes including the privatisation of the energy infrastructure and the ability of private firms, with shareholders to answer to, to provide the best service.

Most commentators will suggest that privatisation frees the state from the burden of providing hideously expensive services. French state railway business, SNCF, for example, runs consistently at a loss and has to be heavily subsidised.

Conversely, though, one has to ask the question as to how enthusiastic the Chinese investors in Thames Water are in having to spend a huge amount in upgrading the UK’s ancient water infrastructure and stopping leaks that see roughly 500million litres of water lost per year.

It’s an argument that returned to plain view in the UK this week following the failure of Richard Branson’s Virgin Trains business to secure operating rights for the West Coast Mainline.

The tender was handed to First Great Western, following the firm’s rumoured ability to put in a bid of an extra £1.5billion and £200million in guarantees over and above the Virgin proposal.

In the long-privatised railway business, and with a Government looking for the biggest return, the First Great Western bid was always going to be a winner.

But it raises questions as to whether the highest bidder is always the most suitable candidate for the job. Something we will undoubtedly see played out in the renewable energy industry.

Returning to the issue at hand, TenneT - a Dutch firm that bought the German grid from E.ON in 2009 - might not have the drive to stretch itself to raise the 15 billion Euros it is estimated to cost to connect German offshore wind farms to the national grid.

There are reports that the German Government would be keen to see TenneT sell its German grid business to some German insurance firms, such as Munich Re, which this week bought three UK onshore wind farms.

This would in theory free up the funds that the industry needs, whilst passing control to a domestic business.

Whatever happens in the coming months it’s not a situation that the developers, TenneT or the German offshore wind market can tolerate indefinitely.

Full archive access is available to members only

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.

Full archive access is available to members only

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.