Direct Energie mulls gas power plant acquisitions

France’s third biggest electricity provider is considering the purchase of gas-fired power plants as it seeks to expand its business.

Direct Energie is benefiting from the decision by the French government last year to end regulated tariffs for companies and municipalities. While EDF still has 87 per cent of the market in France, with Engie on 8 per cent, Direct Energie is at 5 per cent and growing.

The new gas power plants would serve to increase capacity as the company looks to improve on its current number of 2.1 million clients.
Direct Energie
It has reached a "tipping point" and aims to have a 10 percent market share by 2020, chief executive Xavier Caitucoli told Reuters.

"The market structure now finally allows us to earn a living," he said, adding that getting to 3 million clients would provide critical mass and greater economies of scale.

In July 2017 it will be a decade since France opened its electricity market to competition, but new entrants have struggled to survive due to low regulated tariffs.

But in a series of lawsuits, Direct Energy has successfully challenged government-decreed caps on retail power prices. It is now looking to move beyond France and Belgium into Spain, Germany and Britain and wants its power generation capacity to grow in line with its customer base.

Late last year it bought a combined cycle gas turbine (CCGT) from Italian utility Enel, and in 2015 another from Swiss utility Alpiq.

Direct Energie is developing a new CCGT plant in Brittany and might own four by 2020, Caitucoli said, adding it would consider buying renewable energy assets and hydro-electric plants, when France opens the latter to competition.



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