Gemany’s RWE AG is selling its subsidiary RWE Gas Storage CZ sro to the state-owned Czech Transmission System Operator (CEPS) for an equity value of $389.1 million (€360 million).
The purchase of the company, which includes a workforce of 250 employees, has been approved by the Czech government. The transaction is subject to regulatory approval and is expected to close within the year.
RWE has decided to divest its Czech business as “gas storage activities are not part of RWE’s core business,” the company said in a press release on Thursday. RWE maintains its gas storage in Germany, noting that its German storage facilities are salt caverns that are ready to be used to store hydrogen.
RWE Gas Storage CZ is the largest operator of gas storage facilities in the Czech Republic, with six underground gas storage facilities with a total operating volume of more than 95.35 billion cubic feet ( 2.7 billion cubic meters), according to the statement.
“We are delighted to have found in CEPS a competent and experienced buyer, for whom our gas storage business in the Czech Republic is of key strategic importance,” said RWE CEO Markus Krebber. “This provides certainty to the workforce and the opportunity to continue to evolve both the company and its business. RWE Gas Storage CZ is a profitable and well-established company that plays an important role in the security of supply in the Czech Republic.
“CEPS, how will it finance the purchase in the short term with the resulting surplus of own resources [sic] a significant drop in the costs of auxiliary services and a drop in the prices of electricity purchased to cover losses in the transmission system. The company will also use the proceeds from cross-border capacity auctions,” said CEPS President Martin Durcak.
“CEPS is the only national transmission system operator, responsible for the transmission of electricity and the proper functioning of the electricity system, and therefore also for the safety and reliability of electricity supply in the Czech Republic. The company is owned by total of the State, with 100 percent of the ownership rights exercised through the Ministry of Industry and Commerce. Therefore, the purchase of the gas storage facilities by CEPS is a logical step in the government’s activities to further strengthen the security of supply of the Czech Republic,” said Czech Minister of Industry and Trade Josef Sikela.
RWE USA contract
Meanwhile, the US Department of Energy has selected RWE as one of 20 energy services companies to offer energy savings performance contracts (ESPCs) for federal agencies, according to a previous press release.
The ESPC program, now in its 25th year, is a way for the government to leverage private capital to improve the efficiency and sustainability of federal facilities. According to the release, ESPCs allow federal agencies to carry out energy conservation projects without special appropriations from Congress.
RWE said it will conduct a comprehensive energy audit and identify improvements to save energy, generating enough cost savings to pay for the project over the life of the contract.
“As we continue to expand our portfolio of renewable energy projects in the US, we are excited to accompany our customers on our path to a sustainable future,” said Mark Noyes, CEO of RWE Clean Energy.
In March, RWE acquired Con Edison Clean Energy Businesses and combined it with its subsidiary RWE Renewables Americas, resulting in a renewable energy portfolio of about eight gigawatts of installed capacity, according to the statement.
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