Nuclear power sees a shift in the wind. Areva to take over REpower

The morning of 15th January 2007 on the Leipzig Energy Exchange EEA saw an extraordinary event. The price for a megawatt-hour of electricity fell to Eur 0. Zero.

The fierce storms of the previous few days had produced a surplus of wind-generated electricity - almost as much power was produced as all of the nuclear power plants in Germany combined.

Electricity cannot be stored and so , by law, wind-generated electricity has to be supplied to the mains grid at a fixed price. The price on the Energy Exchange forms the baseline for German national wholesale prices and as a reference for mains and distribution costs, taxes and duties, and forms 20% of the final consumer price in Germany.

The morning of 22nd January 2007 on the Hamburg Stock Exchange saw Areva S.A. the French Nuclear power manufacturing company a 30% share holder in REpower Systems AG (since 2005) make a friendly take over offer of Euro 144 per share (Total Euro600 - US$777Mn) a premium of 44% on the 3 month average Stock Exchange price and 17% up on FRiday's close. The shares ended the day 24% up.

The 2nd largest shareholder is the Portuguese industrial group Martifer Construcoes Metalomecanicas, which has 25.4%.- which in turn is 25% owned by Mota-Engil SGPS SA, Portugal's biggest construction company.

Repower, Germany's third-largest maker of wind-power equipment behind Vestas Wind Systems A/S and Enercon, made a loss last year of Euros 8.3 Mn but a 1Euro 1 million profit in 9 months on sales 50% higher at Euros 292.6 million.

Areva see the business complementing their sales (they have a very full order book for nuclear power) to their clutch of Utility customers in Europe and are eyeing the US market where the Global Wind Energy Council says a record 2,431 megawatts of wind-energy generating capacity was added in 2005, the most of any country worldwide.