While the EDP board is considering the bid for the business from China Three Gorges, the sand is shifting under the electricity supplier’s feet with domestic market eroding.
The largest electricity trader in Portugal closed May with a 77.5% share in the residential market. This represented the sixth month in a row in which EDP lost out to competitors with Iberdrola and Endesa gaining at EDP’s expense.
The decline in percentage share may not look much, 77.8% in April to 77.5% in May, but the trend will not have escaped the notice of the Chinese who are being urged by EDP’s board to up their bid.
From April to May, Iberdrola's share in the domestic market rose from 4.6% to 4.9% and Endesa's share rose from 4.6% to 4.8%.
Galp's position remained unchanged at 5.8%. Gas Natural Fenosa, which also supplies electricity in the deregulated market, slid from 1.9% to 1.8%, while PH Energia (which operates under the Energia Simples brand) fell from 1.4% to 1.3%.
In terms of total domestic electricity market, i.e. including business customers, EDP maintained its market leadership, but also with a slight decline in its share, from 42.2% in April to 42.1% in May.
At the end of May, the liberalised electricity market in Portugal closed 5.02 million customers with slightly over 1 million contracts remaining in the regulated market.
China Three Gorges, owned by The People’s Republic of China, has put in a bid for EDP and the company’s renewable energy company, EDP Renováveis.
The latter company now is being studied by the French group, Engie, whose board is considering a counter offer of €7.3 billion even though it denies this publicly.
The French group is especially interested in the assets that the company has in the United States and that will be compromised if China Three Gorges gets control of EDP.
Engie also is considering making an offer for the entire company and has had talks with EDP’s management.
EDP owns 83% of EDP Renováveis and if the takeover bid from its Chinese shareholder is successful, then China Three Gorges will have control of EDP Renováveis.
