By Mathew Carr
Dec. 5 (Bloomberg) -- Power utilities may bid for renewable- energy companies, which will be strapped for cash because of the credit crisis, according to a specialist in mergers and acquisitions at advisory firm KPMG.
Developers of wind farms and other non-fossil-fuel power projects “are likely to find access to capital more and more difficult,” Andy Cox, global head of energy and utilities for KMPG’s transaction services unit, said in an interview. “This may create excellent buying opportunities for utilities with cash that do not already have a long renewable pipeline,” London- based Cox said.
Carbon dioxide allowance prices in the European Union have fallen by more than half in the past five months, following a decline in energy prices, making traditional fossil-fuel-based plants more competitive. Deutsche Bank AG yesterday slashed a forecast for EU emissions saved from renewable energy in the five years through 2012 by 18 percent to 167 million tons of carbon dioxide, according to Paris-based analyst Mark Lewis.
“People are going to be able to run their coal stations for longer,” Lewis said today by telephone. He said he may further cut his estimates for savings from alternative energy through 2020, depending on how the economic recession bites.
Renewable-energy developers “will need to be realistic on pricing for deals to be consummated,” Cox said. “Projects may inevitably become delayed in the absence of financing.”
Enel SpA, Italy’s biggest utility with more than 51.4 billion euros ($65.2 billion) of debt as of Sept. 30, confirmed today it plans to sell a minority stake in its renewables unit to raise cash. The sale will be completed by the end of next year, according to an Enel official, who declined to be identified in line with company policy.
To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net
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