Smart Energy Finances: Italgas growth and smart electric meter market snapshot
On this week’s Smart Energy Finances radar are; Italgas’ Q1 growth of 18.9%; a snapshot of forecast smart meter market growth, a flexibility tender from SP Energy Networks, $240 million sale in transmission assets from Iberdrola’s Neoenergia and ABB’s latest divestment.
Italian gas DSO Italgas has announced positive Q1 results, dated 31 March 2023, stating their recent acquisition of a Greek gas distribution company and a digital push as driving their growth.
The company announced 18.9% growth in their EBITDA, up to €297.2 million ($326.8 million).
The growth is attributed to the company’s investments over the first three months of 2023, including €175.1 million ($192.6 million) for the extension, digital transformation and repurposing of their networks. Specifically, 213km of new pipelines were laid in the first quarter of 2023.
Late last year Italgas completed the acquisition of Greek gas DSO Depa Infrastructure S.A., pushing them further into a leading role in the Greek gas distribution market and signalling their return to the international market.
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The company, during a shareholders meeting last month, acknowledged the acquisition of Depa and their digital transformation as key indicators of their growth strategy.
Benedetta Navarra, Italgas chairwoman, commented in a press release, “Digitisation, technological innovation, circular economy, training, diversity and inclusion continue to be the cornerstones of our actions at the disposal of communities and territories”.
Paolo Gallo, the company’s CEO, added: “Alongside decarbonisation targets it is crucial to ensure security of supply and industry competitiveness. An approach that we are also promoting in Greece, since the last months of last year marked the Group’s return abroad with the acquisition of Depa Infrastructure, the country’s main gas distribution player.”
According to the company’s Q1 financial results, all economic indicators showed double-digit growth, with Group Net Profit exceeding €100 million ($110 million), up 16.5% compared to the first quarter of last year, thanks also to the contribution of their activities in Greece.
Market snapshot: Smart electric meters to reach $6.9 billion by 2028
According to research released by ResearchAndMarkets, the global smart electric meter market is forecast to grow at a rate of 1.6% CAGR between now and 2028 to reach $6.9 billion, up from 2022’s $6.2 billion.
Key drivers, according to the research, include:
- Increasing adoption of energy efficient technologies and rising investments for replacement of traditional systems with IoT-based metering tech
- Increasing subsidies and incentives provided by governments globally to boost the integration of grid infrastructure with smart electric systems
- Increasing advancements in microgrid networks and expansion of distributed generation technology
- Rising consumption of power across residential establishments such as multi-storey buildings and apartments coupled with the expansion of the commercial sector; these accompany rising utilisation of energy efficient services and products
SP Energy Networks launches 11-month 273MW flexibility tender
SP Energy Networks has launched its spring Flexibility Tender in a search for providers to supply flexibility services across 571 locations identified within its distribution network licence areas.
The UK distribution and transmission network operator, is seeking to procure 273MW of flexibility for an 18-month period from November 2023 to October 2025.
Flexibility providers can apply via the Piclo Flex Platform; pre-qualification period is open and will run until Friday 14 July 2023. The bidding competition will then open on Monday 17 July and close on Friday 21 July 2023.
This new tender will allow for additional flexibility across areas where it has been identified that demand for electricity will increase due to low carbon tech adoption, including electric vehicles and heat pumps, which can often lead to network constraints during busy periods.
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Neoenergia sells 50% equity across eight transmission assets
In a deal valuing BRL1.2 billion ($240 million), Iberdrola’s subsidiary has entered an agreement with GIC, a global institutional investor, to sell 50% equity across eight power transmission assets in operation.
These include Jalapão, Santa Luzia, Dourados, Atibaia, Biguaçu, Sobral, Narandiba and Rio Formoso, which consist of 1,865km of transmission lines.
The purchase price is subject to customary price adjustments. A transmission holding company will be formed to hold the operational assets.
GIC will also have a right of first offer in connection with the potential future sale of 50% of equity interest in the power transmission assets under construction by Neoenergia – Itabapoana, Guanabara, Vale do Itajaí, Lagoa dos Patos, Morro do Chapéu, Estreito, Alto do Parnaíba and Paraíso – which cover 6,089km of lines. The same rights shall also apply to Potiguar Sul, totalling 6,279km of lines.
The eight operational assets have Annual Permitted Revenues (RAP) of approximately BRL430 million ($86 million) and an average concession term of 25 years.
Following closing of the transaction, Neoenergia will continue to provide operation and maintenance services, as well as other corporate services to the operational assets.
ABB divests
Tech developer ABB has completed divestment of its UK technical engineering consultancy business, part of its Energy Industries division, to TÜV Rheinland, following a strategic portfolio review.
The financial terms of the transaction have not been disclosed.
According to ABB, the business complements TÜV Rheinland’s existing risk, safety and integrity management services and has been integrated into the Industrial Services and Cybersecurity business of TÜV Rheinland in the UK.
ABB’s UK technical engineering consultancy, including a network of subcontractors and associates, has around 160 people operating from two main sites in northeast and northwest England.
A specialist team of technical experts helps global energy customers improve process safety, equipment and asset integrity as well as technical design for new and existing industrial plants.
The combined business is expected to create a scalable, broad-based technical engineering provider delivering a full-service offer to the high hazard industries, supporting customers in the energy transition and with energy security.
The initial announcement of the acquisition came from TÜV Rheinland earlier this year in January, the same month ABB completed divestment of its power conversion unit to AcBel Polytech.
For the latest in finance and investments announcements coming out of the energy industry, make sure to follow Smart Energy Finances, our weekly column.
Cheers,
Yusuf Latief
Content Producer, Smart Energy International
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