Europe's Five Largest Utility Companies & Changes To Their Generation Capacity by fuel, Revenue, Profit (2009-2011) (EDF, EON, RWE, GDF Suez, Iberdrola), Profits Down Due to Low Electricity Prices

For the largest utility company in Europe (2nd largest in the world) (CNBC) Électricité de France (EDF), 55.5% of 2010 sales came from France compared to 57.7% the year before. EDF leads the electricity market in both France and the UK (33.2 million customers between them). Though large EDF's generating capacity relies more heavily on one fuel type (nuclear) than any of its competitors; It gets 75% of its generating capacity from nuclear energy (90% of its nuclear capacity is in France (France is the world's largest net exporter of electricity). Also of note, EDF is the world's leading operator of nuclear power and Europe's leading hydro electricity producer.

European utility stocks have been hammered lately, a direct result of earnings losses (hindering profits in Europe are low electricity prices which are expected to decrease even further in the near future (down to as low as €50 by 2015); Europe has contemplated electricity price fixing, in terms of industrial demand European countries already keep prices low so as to help their companies stay competitive, for households though it's a relatively new thing (Europe could be concerned that households can't afford further increases). Also affecting results: a warmer winter in France (GDF Suez said in its 2011 2Q report that the winter was 30.5% warmer than it was in 2010 and that was the main reason sales there dropped 8.5%/demand for gas 24% lower to 131 TWh, electricity 3% lower to 18.3 TWh). EON's stock fell 35% between January 1 and September 1, 2011 while the stock price of RWE AG (second largest German utility) fell 49%. However, revenue stream continues to be strong for most utilities but that's mostly because a number of them including GDF Suez (International Power) and Iberdrola (Elektro in Brazil (distributor) for $2.4 billion) have made significant acquisitions (also, a greater focus on renewables will benefit the companies in the long run as it makes them less dependent on natural gas imports while also removing them from carbon penalties). GDF Suez's organic ebitda growth in the first half of 2011 was -1.1% but new addition International Power was up 27% (business in America) and that boosted GDF's overall ebitda by over 8% (671m euro). According to broker data, in Germany baseload power for 2012 is at €58.95 ($84.16) per megawatt-hour. (RWE, EON May Be Long-Term Underperformers, Barclays Says)

EDF and GDF Suez also differ in terms of their international business. Most of EDF's generation capacity comes from domestic operations within France while GDF Suez receives less than 10% from France (the rest comes from places abroad like Africa/Asia and America (Canada is a significant source of wind power; about 182 MW worth in the first half of 2011). On August 9, 2011 it was announced that China Investment Corp paid €2.3 billion for a 30% interest in GDF Suez's exploration and production business. GDF Suez also produces oil, over 50M barrels in 2010. GDF Suez recently acquired 70% of International Power giving French companies a lot of control over power production in Great Britain (the other French company EDF has close to 8 million customers in the UK).

A CANDU reason to buy SNC-Lavalin

In mid 2011 the government of Canada auctioned off Atomic Energy of Canada Limited commercial reactor unit to SNC-Lavalin for $15 million, including future royalties over 15 years, the government's return could be as high as $285 million (AECL makes and refurbishes the popular CANadian Deuterium Uranium reactor brand) (CBC:Candu purchase gives SNC Lavalin 'free call option'). The acquisition doubles the workforce of SNC Lavalin's International Power division and increases those employed by the nuclear energy unit by a factor of six (400 to over 2,400, doesn't include about 2,500 jobs which are in the laboratory division not affected by the deal). Nuclear energy meets a lot of the world's energy needs (it is a key source both domestically and internationally; 55% of Ontario's 2010 electrical capacity and roughly 15% globally). (World Nuclear Association) It is one of the top 3 alternatives to coal for utility plants (about a third as popular a fuel as leading coal) and with coal fired plants facing tougher restrictions (sulphur content must be brought down to zero, renewables being promoted by the American government & EPA), volatile dry bulk shipping rates and Australian exports (major source of coal) reduced by floods in Queensland, nuclear is one of only a handful of sustainable alternatives. As well, nuclear energy use can only go up with 86.8% of coal in the United States already going to electricity generation (down from 88.5% in 2009 meaning coal has become less popular). (Alpha Natural Resources 2010 Report) Coal has also become comparatively more expensive relative to its alternatives (tripled in price between 2004 and 2010 while natural gas is unchanged). (Gas Rally Boosts Coal's Allure for Power Plants)

Candu is in an industry of its own, the nuclear reactor has been credited with promoting nuclear development in China, India and South Korea. Though sales of CANDU reactors have historically been strong in the last decade they have dwindled, the direct result of it being a crown corporation under the direction of an overly protective/selective government (wouldn't allow for any risk, that affected its ability to get contracts signed with eager clients). CTV News: Ottawa to sell Atomic Energy of Canada Ltd. to SNC-Lavalin The nuclear reactor business is also highly political in nature meaning Canadian companies have to work harder than their counterparts to secure foreign contracts; traditionally American companies have had the edge however SNC Lavalin has shown itself to be more than capable of competing in such an environment (has obtained many large concessions in foreign countries, has pushed on in countries like Algeria even after a terrorist bomb killed a dozen of its employees in 2008).

All criticism of nuclear energy stems from safety concerns regarding meltdowns and weapons grade by products however those problems can be avoided simply by converting reactors to thorium fuel based from uranium based. (Cosmos:New age nuclear) Additionally, CANDU reactors (newest of the 34 used globally, was commissioned in 2007 in Romania, Romania has also ordered another one for 2013) use natural uranium and the radioactive water doesn't directly power turbines to create electricity, rather it stays in a secondary closed loop that can readily be made to release excess heat into the atmosphere rather than the water (unlike Fukushima Dai-Ichi). (SFGate:Canada Sells AECL's CANDU Reactor Division to SNC-Lavalin) In Qinshan, China, Candu reactors have been shown to operate on thorium meaning that even before New Generation nuclear reactors are widely accepted, SNC-Lavalin has access to technology that's already ahead of the competition. (World Nuclear Association: Thorium)

Although Generation IV reactors haven't yet been produced by Atomic Energy of Canada, the Canadian government has invested billions of dollars into cutting edge research carried out by the company. (Natural Resources Canada: Priority Area:Next-Generation Nuclear Energy Technologies) AECL's Enhanced CANDU 6 (EC6) has Generation III features and is the only medium sized reactor capable of being implemented on smaller grids. The Enhanced Candu 6 gives customers the option of using either thorium, uranium or other popular fuels. (Atomic Energy of Canada Limited 2010 Financial Report)

Thorium based rectors yield 200 times as much energy as those fueled by uranium. Though safe, other renewable sources are expensive costing as much as five times the price per kWh produced when compared to coal (23 cents versus 4 cents).

Furthermore, energy consumption experienced the biggest yearly increase since 1973 in 2010, in 2010 it was up 5.6% largely due to China (up 11.2% surpassing the USA) and non-OECD nations (63% higher than 2000 levels). (World energy consumption up 5.6% in 2010, biggest rise since 1973: BP) Nuclear energy accounts for about 7.8% of the world's energy needs (24 out of 470 million BTU's (2011 pace as of August).

mining companies to keep watch of

1 Ivanhoe Mines - Due for a breakout year in 2011 could go from minor producer (1 million tonnes of copper annually) to major producer (billion tonne copper, million ounce gold producer) and is a lot less risky than people think (even if all its operations outside of the oyu tolgoi project are a bust rio tinto's interest in that project will keep Ivanhoe's value at or above US $6.5 billion).

2 Osisko Mining - Involved in many underrated projects and its 2 largest ones could make it a 1 million ounce of gold producer quickly.  Its reserves estimate is conservative and as a mid cap exploration company it could be the subject of a lucrative takeover.