A strategic alliance

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Belgian utility Electrabel is aiming to take a major stake in the French wind power market through its strategic alliance with Compagnie Nationale du Rhône (CNR), France's second largest electricity producer. The two companies established a wind development partnership in October and are now working on a series proposals for wind farms, mostly along the southern Rhône valley in eastern France.

Initial plans are for up to 40 MW on CNR's own land. The first proposal, a 10 MW project, is likely to be submitted to public enquiry in the autumn. If approved, it should be operational by early 2005. Electrabel and CNR are also hoping to develop an additional 60 MW of wind over the next four years on private and municipal land, also along the Rhône.

Given that France's total wind power capacity is still below 200 MW, with perhaps another 300 MW in the pipeline, 100 MW would give CNR and Electrabel a sizeable market share. This is particularly important to Electrabel. The company is emerging as a major European utility and is keen to establish a foothold on the French electricity market dominated by national nuclear utility Electricité de France (EDF). It has already acquired 26% of CNR and was expected to buy a further 16% last month, followed by another 7% to take it to the legal limit of 49%.

CNR produces a mere 3% of France's electricity, 2800 MW against EDF's 100,000 MW. By teaming up with Electrabel the company hopes to increase its stake to 10-15%. Furthermore, all CNR's production comes from renewable sources which, up to now, meant hydro-electric power from the Rhône. As a result, in June 2002 it was the first French electricity producer to have its power certified as green.

CNR's diversification into wind power seems a natural step. Whether Belgian Electrabel is serious about becoming a major wind developer in France, or whether it is simply using wind power as a pawn to get into the enormous market, remains to be seen.

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