Italy

Italy

Electricity trader signs up for wind -- Power purchase from 96 MW

Making its first investment in the Italian wind sector, the Italian subsidiary of Switzerland's EGL has reached an agreement with two units of construction group Moncada Costruzioni to buy the power and marketing rights for four Sicilian wind farms with a combined capacity of 96 MW.

Electricity trader EGL Italia did not reveal financial details of the eight-year agreement reached with Moncada units Enpower and Windpower Sud. Moncada is investing about EUR 110 million in the projects, which are located at the sites of Monte Petrarsi, Narbone, Malvizzo and Durra, all in Sicily's Agrigento region. A total of 113, 850 kW Gamesa turbines are destined for the four sites. They are expected to begin operations in the first half of 2006.

EGL Italia, which sold over 14 TWh of power in Italy during 2004 and expects to sell about 16 TWh this year, will be able to sell not only the wind energy from the plants but also the green certificates associated with the power. Producers and importers of electricity in Italy are required to acquire a small but growing portion of their electricity -- or 2.7% of the total in 2005 -- from renewable sources of energy. Those who do not satisfy the requirement internally may instead purchase certificates from those who have a surplus.

In future, EGL Italia will also be able to use a small portion of those certificates to satisfy its own Italian renewables requirements, notes the company's Paolo Ghelfi. EGL Italia is also set to become a producer in Italy in 2007 when the first of four planned gas-fired combined-cycle plants is slated to go online.

While EGL is new to the Italian wind business, the agreement is not its first in the wind industry. Last year, the Swiss company acquired a 35% stake in Norwegian wind developer Norsk Miljokraft. EGL has been active on the Italian market since 2000 and last year posted net sales of roughly EUR 1 billion. Sicily's Moncada Costruzioni diversified into the wind plant construction business in 2001.

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