Energy Business

Alternative Energy Watch: Swiss Nix Nuclear Energy; Chinese Renewables Firm Withdraws IPO Again; Northeast Utility Sells Last Wind Farm (CHG, DUK, DATE, RENN)

Today’s alt energy news begins with a decision in Switzerland to phase out nuclear power generation. A Chinese renewables firm has withdrawn its IPO for a second time and CH Energy Group, Inc. (NYSE: CHG) has sold a wind farm in Wisconsin to Duke Energy Corp. (NYSE: DUK).

Following the disaster at Japan’s Fukushimi Daiichi nuclear plant, many countries reviewed their plans for continued development of nuclear power generation. Germany concluded that it would halt new development, while the US is gingerly considering going ahead with both relicensing of existing plants for an additional 20 years and with new nuclear plant development.

Switzerland has decided to follow Germany’s lead and to phase out its nuclear generation fleet. The Swiss produce about 40% of the country’s electricity from nuclear power, so this is a big deal. Many of Switzerland’s utilities were surprised by the government’s decision, which must still be finalized by the Swiss parliament. One company, with plans to build two new nukes, has warned that energy costs will increase as a result of the decision.

The government plans to invest in new hydropower plants and to increase investment in solar and wind energy. No specific figures were presented, and a government spokesperson admitted that fossil fuels could be used to replace some of the nuclear supply.

Nothing will happen immediately as Switzerland’s five reactors have operating licenses running through 2020 and 2040. But if the government’s decision is upheld, the next argument is likely to be over renewables vs. fossil fuels and hydropower.

China’s Nobao Renewable Energy Holdings Ltd. has cited “general market conditions” as its reason for indefinitely postponing its planned IPO. The company had planned to price the IPO yesterday and had hoped to raise $300 million. The company planned to list its ADSes on the NYSE under the ticker symbol “NRE.”

The company had withdrawn an IPO in April 2010, after it had trimmed its offering size back to $180 million during the height of the European debt crisis. This latest withdrawal could be the result of recent reports of accounting shenanigans among Chinese firms. China’s International Ltd. (NASDAQ: DATE), a web-based matchmaking service, and Renren Inc. (NYSE: RENN), a social networking site, both suffered virtually immediate reversals to euphoric IPOs.

Finally, an upstate New York utility, CH Energy has sold its last renewable energy unit, a wind farm in Wisconsin, to a unit of Duke Energy Corp. Terms of the sale were not disclosed. The wind project began operation in December 2010, and includes eight 2.5-megawatt turbines. CH had a 20-year power purchase agreement with Wisconsin Public Service Corp.

CH invested about $50 billion in the wind farm beginning in 2009. It’s a fair bet that Duke didn’t pay that much to acquire it, both because CH has altered its strategic thinking to eliminate its renewables portfolio and because the state of Wisconsin could make it more difficult to expand wind farm capacity. This acquisition was likely just a relatively cheap way for Duke to beef up its renewables portfolio.

Paul Ausick