M&A

25 November, 2009

Utilities withdraw from UK offshore tender -sources

* RWE, ESB, Statkraft and StatoilHydro pull out -sources

* Ten bidders now left in the auction-sources

* Move deals blow to UK offshore wind plans

By Greg Roumeliotis, European Infrastructure Correspondent

AMSTERDAM, Nov 25 (Reuters) - RWE (RWEG.DE), ESB International and a consortium of Statkraft and Statoilhydro have withdrawn from a 1.15 billion pounds ($1.92 billion) auction of offshore electricity grids in Britain, sources close to the process said.

Regulator Ofgem has communicated to the remaining bidders that the four companies have pulled out of the tender ahead of Dec. 14, when a shortlist is due for each of the nine Offshore Transmission Owner (OFTO) projects on offer, two sources said.

The development deals a blow to the UK's efforts to attract private investment in connecting offshore wind farms to the mainland power network, an issue that generates major capital commitments for many grid operators across Europe.

Officials at ESB, Statoil and Statkraft confirmed their withdrawal while an RWE Npower spokesperson did not respond to a request for comment.

"Companies withdrawing from tenders is a fact of commercial life. We are pleased with the strong competition we have seen in the process so far," an Ofgem spokesman said.

Ten bidders still remain in the auction, sources said. Its future will determine if more such auctions are held to help raise the 15 billion pounds required to link some 33 gigawatts of planned offshore wind capacity to the UK grid. ($1=.5979 pounds) (Editing by Mike Nesbit) ((greg.roumeliotis@thomsonreuters.com; +31 20 504 5005; Reuters Messaging: greg.roumeliotis.reuters.com@reuters.net))

Source: http://www.reuters.com