Utility Week

UTILITY WEEK | 13TH - 19TH JULY 2018 | 19 This week London gets £500m energy efficiency fund London Mayor lends his name to fund seeking to make public buildings more energy efficient A £500 million energy fund has been launched in London to help hospitals, universi- ties and small businesses cut carbon emissions by 60 per cent by 2025. Following the success of the London energy efficiency fund (LEEF), the mayor's energy efficiency fund (MEEF) will provide finance to fund new low-carbon technology or upgrade existing infrastructure, with an investment period of up to 20 years. The MEEF is the UK's largest-ever dedicated invest- ment fund for urban energy efficiency measures, accord- ing to London mayor Sadiq Khan. The announcement last week follows a study by the Green Finance Taskforce revealing that many public sector organisations are unable to install energy-efficient measures because of a lack of finance. Measures eligible for funding under the scheme include battery storage, electric vehicle charging infra- structure, decentralised energy, small-scale renewables, energy efficiency, and low-carbon data centres. The money is provided through the European regional development fund and Amber Infrastructure Group. Santander and other commercial funders will provide equity, subordinated and senior debt. Joanne Patrick, MEEF director at Amber Infrastruc- ture Group, said: "MEEF seeks to address market failure in London's low-carbon sector by providing flexible and competitive finance to enable, accelerate or enhance viable green infrastructure across London's boroughs. AJ WATER Three water holding firms downgraded Fitch Ratings has downgraded three UK water holding compa- nies, raising concerns over busi- ness risk in the water industry. Osprey Acquisitions (Anglian Water), Kelda Finance (York- shire Water) and Greensands UK (Southern Water) have been downgraded from stable to negative. A sustained drop in dividend cover during AMP6 and AMP7 price controls could lead to further negative rating action for the companies. Fitch said the move reflected its reassessment of the indus- try business risk ahead of the upcoming price control (PR19) and its revision of negative rat- ing sensitivities for companies. "We believe the business risk in the UK water industry is increasing due to a tougher proposed regulatory package for the next price control, offering lower cashflow visibility as more revenue will be at risk with a higher proportion of the allowed return linked to performance," the credit rating agency said. ENERGY EDF Energy to raise prices again EDF Energy has announced a 6 per cent increase in the average energy bill for dual fuel custom- ers on its standard variable tariff – a rise of more than £70 to £1,228 per year. The typical bill for single fuel customers on its standard vari- able tariff will increase by 6.1 per cent for electricity and 6 per cent for gas. The changes will take effect on 31 August. EDF Energy blamed the hike on ballooning wholesale power prices, which have risen by 18 per cent so far this year and 13 per cent since April. GAS Centrica buys into Barrow Green Gas Centrica is buying a 50 per cent stake in the biomethane gas shipper Barrow Green Gas (BGG). Founded in 2012, the company acts as a middleman between producers and suppli- ers. It is the only gas shipper in the UK to focus solely on the green gas market. As such, BGG claims the title of the country's largest shipper of biomethane, providing almost half of the green gas used by British homes and businesses. Cassim Mangerah, co-manag- ing director of Centrica's energy marketing and trading business, said: "We expect the biometh- ane market to continue to grow across the UK and Europe, underpinned by supportive regu- lation and growing customer demand for renewable energy." Khan: UK's largest dedicated fund Stock watch 2,400 2,200 2,000 1,800 1,600 SEVERN TRENT SHARE PRICE, FIVE DAY Jul 2017 Nov 2017 Mar 2018 Jul 2018 SEVERN TRENT SHARE PRICE, FULL YEAR Political uncertainty following the fallout from two high-profile cabinet resignations over Brexit – Brexit secretary David Davies on Sunday and foreign secretary Boris Johnson on Monday – affected some domestic sector stocks, with analysts reporting utilities as the worst-performing. The water company's stock stood at 2,080p at 11.30am on Monday but had fallen by about 6 per cent to 1,961p by the same time the following day. 2,100 2,050 2,000 1,950 1,900 4 Jul 5 Jul 6 Jul 9 Jul 10 Jul Finance & Investment

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