New wind farms coming on line in Italy helped compensate for a series of negative factors, including lower Italian electricity prices and a 20.3% drop in production at the company's French wind installations.
The stronger EBITDA performance was not sufficient to prevent Erg Renew’s bottom-line losses from widening in the same period to €10.3 million from €4.5 million--this is largely the result of increasing project financing costs for two plants which recently became operational, the 37.5 MW Vicari wind farm in Sicily and the 24 MW Faeto wind farm in the region of Apulia.
Erg notes that Italian electricity prices averaged €69.3/MWh for the first nine months of the year, down 18.7% on the same period in 2008. Italian green certificate prices were also marginally lower, averaging €88.2/MWh, or 3.1% down on the previous year.
Since total revenues for electricity produced from Italian wind farms is the sum of electricity and green certificate prices, Erg Renew received an average of €157.5/MWh for its Italian wind production in the first nine months of 2009 compared with about €176/MWh in the first nine months of 2008.
Despite the lower prices, overall revenues at Erg’s Italian wind farms increased 30% in the nine-month period to €22.7 million as Vicari and Faeto wind parks became fully operational.
These two new wind farms more than offset a decline in production seen at Erg Renew’s 42 MW and 30 MW San Vincenzo and San Cireo wind farms, due to extraordinary works being carried out on Apulia’s electricity transmission line by the transmission system operator Terna.
Revenues from its French wind operations fell 16.7% to €6 million, as production declined 20.3% in the same period as a result of bad wind conditions and some extraordinary maintenance. The company says it received €86.0/MWh for electricity from its French wind operations.
Erg Renew currently owns six Italian wind farms totaling 144 MW and five French wind installations with a combined capacity of 55.2 MW.
The company has signed civil and electrical works contracts for both a planned 40 MW wind farm in Ginestra, in the southern Italian region of Campania, and its 100 MW Fossa del Lupo project in Calabria. Meantime, a 9.2 MW wind farm in Plogastel, France, will be completed by October 2010 while the company expects to receive final authorisation for a 20 MW wind project in Greneville shortly.
Revenue rises at Erg Renew as finance costs hit
ITALY: Erg Renew, the renewable energy division of Italian refining group Erg, saw its earnings before interest, taxes, depreciation and amortization (EBITDA) jump 33.5% to €14.2 million in the first nine months of 2009.
