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Report: China State Grid circling AES US wind business

A report suggesting that State Grid Corporation of China has been in talks with AES about acquiring part of its US wind business was not addressed during the US-based global power company's fourth-quarter earnings call Monday.

Reuters, citing three unnamed sources, reports that the companies have "had talks" about state-owned State Grid taking "a roughly 80% stake" in the AES US wind portfolio.

AES is pursuing "large asset sales" and "exiting, over time, those markets where we do not" have a competitive advantage, chief executive Andrés Gluski tells analysts during the company's earnings conference call. These include agreements to sell more than 1.5GWs of combined cycle gas turbine (CCGT) power plants in New Jersey and Pennsylvania, and its 80% stake in a nearly 1.2GW CCGT plant in Spain for aggregate proceeds of $463m.

The company has also divested of a telecommunications business in Brazil, two distribution companies in Argentina and other assets as it narrows its "geographic and line-of-business focus", Gluski says.

AES is targeting up to $2bn in asset-sale proceeds over the next few years, he says. Asked about specific assets that may contribute to that total, Gluski says, "We've been quite careful as to what we announce. Obviously, our primary focus is to sell well and to optimize our operations until the sale."

AES did not return a request for comment on the Reuters report, which notes that State Grid president Liu Zhenya was part of Chinese Vice President Xi Jinping's delegation to the US in mid-February. A State Grid media official declined to comment to Reuters.

While the vast majority of AES' new generation development focuses on coal and natural-gas fired power plants, the company continues to build new wind projects, including the Laurel Mountain wind and energy storage project -- with 98MW of wind generation and a 32MW battery storage system -- completed in West Virginia last autumn.

AES Wind Generation has a 1.9GW global project portfolio with about 1.4GW in the US. The company counted some 155MW of wind under construction and scheduled for completion this year in France, the UK, India and North America.

Chinese energy companies have been investing heavily in power companies overseas as they seek more profitable returns from their large cash hoards.