E.ON to bid for Spain wind power, mulls new CCGT

ESCATRON, Spain, June 10 (Reuters) - The Spanish unit of German utility group E.ON (EONGn.DE) plans to participate in a tender to build up to 1,400 megawatts of new onshore wind power capacity in the Aragon region in the country's north.

"We will be participate in the upcoming tender, we will bid for a serious portion of that," Miguel Antonanzas, the chief executive of E.ON Espana told reporters on Monday during a visit to the company's gas-to-power plant at Escatron, near the region's capital of Zaragoza.

The move will be part of E.ON's overall strategy to build up thousands of MW of renewable energy capacity in addition to its thermal power generation portfolio in a bid to treble its renewable share by 2030.

It has recently started solar capacity in southern France and is also targeting Italy for more solar power in the future.

In Spain, it currently operates 250 MW of wind power.

Antonanzas said Spanish transmission grid firm REE (REE.MC), which rules on the optimal size of new wind projects for easy absorption of the volatile power by the grid, as well as Aragon's government have approved the tender plan, which envisages the new wind power capacity to be built by 2012.

While there was likely to be considerable competition, he believed E.ON stood a good chance as it was already active in local electricity provision.

The bidding process would likely be decided upon later this year so that construction may start next spring, according to Antonanzas.

He said that the Escatron power plant, a state-of-the-art gas plant commissioned last year at a cost of 400 million euros, during Jan through May ran at 55 percent of capacity on average compared with a load factor average of 35 percent in Spain.

The unit is a combined cycle gas turbine (CCGT), which captures and reuses steam and thus has an energy utilisation rate of 57 percent.

He said that the company has put down deposits related to the current approval process for an option to build another 800 MW CCGT power plant next to the existing one, but going through with it would hinge on the development of power demand.

The Escatron site has access to LNG tanker routes into Bilbao or Barcelona and the nearby river Ebro provides cooling water.

(Reporting by Vera Eckert)