Utility Week

UTILITY WEEK | 20TH - 26TH JULY 2018 | 15 This week Hinkley subsidies 'do not breach rules' EU court upholds European Commission decision to approve subsidies to nuclear power station An EU court has upheld the decision by the European Com- mission to approve the subsidies awarded to the Hinkley Point C nuclear power station, saying they do not breach state aid rules. The Austrian government sought to overturn the decision on the basis the promotion of nuclear power does not consti- tute a common interest of member states, and the reactor technology being used at the Somerset plant is not new. However, the court ruling stated support "need not necessarily be an interest of all the member states or of a majority of them" to be permissible. "Consequently, the commission did not err in taking the view that the UK was entitled to define the development of nuclear energy as being a public-interest objective," it added. The court said neither state aid rules nor the Euratom treaty require technological innovation for subsidies to be allowed. It continued: "In any event, it is common ground that the technology to be used in Hinkley Point C is more advanced than that used in the nuclear power stations which it is supposed to replace." In October 2013, the UK government and EDF agreed the terms of the contract for difference for the nuclear plant. The strike price was set at £92.50/MWh (2012 prices), falling to £89.50/MWh if EDF decided to proceed with a sister project at Sizewell C in Suffolk. Following a year-long investigation, the European Commission approved the deal in October 2014. The Austrian government appealed against the deci- sion in July 2015, receiving support from Luxembourg. TG ELECTRICITY Decommissioning could cost £3.64bn The future bill for decommis- sioning the UK's fleet of offshore windfarms has been estimated in a new study at between £1.28 billion and £3.64 billion. Figures exclude the costs of decommissioning associated off- shore transmission assets, which are expected to add £158 million to the total, as well as potential revenues from waste recovery. The report was produced for the Department for Business, Energy and Industrial Strategy (BEIS) by engineering and consultancy firm Arup. Under the Energy Act 2004, BEIS, the Crown Estate and the Scottish government share responsibility for decommission- ing offshore windfarms and may be required to act as "decommis- sioner of last resort" if a devel- oper cannot carry out the work. The study looked at 37 offshore windfarms in the UK that were operating or under construction. Its findings are partly based on developers' own estimates of the cost of decom- missioning 17 of the projects, which totalled £822 million. WATER Yorkshire to start energy centre work Yorkshire Water is set to begin demolition work on a sewage sludge incinerator in Brighouse, West Yorkshire, ahead of the construction of a £40 million energy and recycling centre. The state-of-the-art facility will use anaerobic digestion to convert human waste into elec- tricity. The electricity produced through the "poo power" tech- nology will power Brighouse's sewage treatment plant and feed into the national grid. ENERGY Study suggests aims for Scots public firm Overarching objectives for the Scottish government's bid to create a publicly owned energy company (POEC) have been suggested in a study by the University of Strathclyde. The scoping note, pub- lished by Ragne Low, principal knowledge exchange fellow at the Centre for Energy Policy, part of the university's International Public Policy Institute, made the proposals for the Economy, Jobs and Fair Work Committee. It reviewed the evidence on establishing a public energy company and looked more widely at what the purpose and model of such a body could be. The review suggested: creat- ing new energy infrastructure platforms; accelerating wider energy system information; increasing engagement and par- ticipation in the energy system; and reducing costs to consumers. Hinkley: Austria said its technology was not new Finance & Investment Stock watch 1,000 800 600 400 200 DRAX SHARE PRICE, ONE YEAR 2015 2016 2018 DRAX SHARE PRICE, FIVE YEAR Analysts at Morgan Stanley expect Drax to benefit from increased power prices when it releases its half-year results next week. They said 12-month ahead contracts have risen by a fih over the past year due to higher gas and carbon prices and have raised their earnings projection for the company by a similar amount. Drax's share price is up by around 3 per cent over the past year, at 355p. 400 350 300 250 200 Nov 2017 Mar 2018 Jul 2018 2014 2017

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