BUSINESS

China slowly building Med power network

The European Commission has long wanted the continent’s power grids to work in unison for reasons of efficiency and supply security, so far to little avail, but a regional power network could soon be a reality, courtesy of State Grid Corporation of China.

While Europe’s utilities have met hostility to cross-border forays and been outbid by infrastructure funds, State Grid, the world’s largest utility by revenues, with its deep pockets and reputation for hands-off management, has had an easier ride, buying minority stakes in Portuguese and Italian grid operators and pursuing designs on Greece and Spain, too.

For wholly state-owned State Grid, which distributes electricity to 1.1 billion people across 90 percent of China, the appeal of the consistent, regulated income from European power assets is obvious.

“When we make overseas investment, we are not doing charity,” he said.

In 2012, State Grid bought 25 percent of Portuguese grid operator REN, then last month it entered Italy with a deal to buy 35 percent of CDP Reti for at least 2.1 billion euros.

CDP Reti owns 30 percent of gas transport group Snam and is set to receive a similar stake in Greek power grid Terna.

State Grid, with Terna and Belgium’s Elia, is also bidding for 66 percent of Greek grid operator ADMIE, sources told Reuters in May, and is interested in bidding for German utility E.ON’s northern Spanish grid.

“After the recent investments of SGCC in South Europe, there is indeed a strategic positioning within the region,” ADMIE CEO Yiannis Yiarentis told Reuters.

[Reuters]

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