While subsidy schemes for renewables are reported doing little, if anything, to spur innovation, they are having an impact on the finances of traditional generation facilities.
GDF books 15 billion euro charge as price slump sticks - Yahoo Singapore Finance:
PARIS (Reuters) - GDF Suez (PAR:GSZ) took a 15 billion euro (12 billion pounds) write-down in its 2013 results mainly for gas storage and gas power plants whose value was hit by a price slump...The entire Reuters story can be read at Yahoo
"This (write-down) decision reflects the group's conviction that this situation is serious and long-lasting," GDF Chief Executive Gerard Mestrallet said on a conference call...
"The deterioration of the situation in thermal power generation in Europe is durable and profound," Mestrallet said...
European power utilities are suffering a price slump because a boom in subsidised solar and wind energy has led to overcapacity, while power demand has been depressed by the economic crisis and energy efficiency measures.
Wholesale power prices across the continent have more than halved from their 2008 highs.
GDF's German peer RWE (GER:RWE) took a 2013 write-down of 3.3 billion euros, more than twice its 2012 net profit, reflecting losses at coal- and gas-fired power plants.
German power prices for baseload (24 hours) delivery in 2015 dropped as low as 35.20 euros per megawatt-hour (MWh) on Wednesday, their weakest since March 2005 and have fallen more than 60 percent since the financial crisis began in 2008.
Swedish utility Vattenfall's CEO Oystein Loseth said in June he expected the utilities industry to remain in dire straits until at least 2020 because of oversupply, falling demand and a difficult regulatory framework.
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