Utility Week

UTILITY WEEK | 27TH MARCH - 2ND APRIL 2020 | 15 Finance & Investment Affinity Water will roll out step testing to find leaks across its network with minimal interrup- tion for customers. The technique is not widely used and relies on underground assets being well-mapped. Engineers turn valves on and off in segments of pipe to isolate a part of the network to find a leak or pressure fluctuation. The "process of elimination" divides WATER Affinity to roll out step testing leak detection across its network stretches of pipe into smaller areas to pinpoint a problem. The company trialled the method and is set to introduce it at specific places across its region that will benefit most. Tom Aspinall, head of leak- age operations at Affinity, said the company's knowledge of its network of pipes and valves had enabled engineering teams to use the method. "Many other water com- panies do not have accurate mapping of their network or the infrastructure to enable them to do so," Aspinall said. The company was tasked by Ofwat as part of its final determination to reduce leakage by 20 per cent by 2025 and to reduce per capita consumption by 12.5 per cent in the coming five years. Pennon Group agrees £4.2bn Viridor sale US private equity firm sets up new company to acquire waste and recycling subsidiary South West Water's parent com- pany Pennon Group has agreed to sell its waste and recycling subsidiary Viridor to KKR in a deal that values the company at £4.2 billion. The US private equity firm, which was rumoured to have put in a bid last year, has set up a new company, Planets UK Bidco, to acquire Viridor. Net cash proceeds are expected to be about £3.7 bil- lion at completion. There is also the potential for addi- tional consideration of up to £200 million contingent on future outcomes. The Pennon board said it will use the funds to reduce the company's borrowings and make a return to share- holders, and retain some funds for future opportunities Chris Loughlin, Pennon's chief executive, said: "The transaction is great news for shareholders as it recog- nises the strategic value that Pennon has developed and nurtured in Viridor over many years and acceler- ates the realisation of that value for shareholders. On completion of the transaction, Pennon will continue to focus on its sector-leading water and wastewater businesses and will consider further growth opportu- nities that create value for customers, employees and shareholders." The valuation of £4.2 billion represents an EBITDA multiple of 18.5. The sale was unanimously agreed by the Pennon Board but remains subject to shareholder approval. Last October, Loughlin told Utility Week that Viridor was performing "exceptionally well" a¡er a phase of major investment to add 11 large energy-recovery facili- ties across the country. RW ENERGY Bulb absorbs failed Gnergy's customers Challenger energy supplier Gnergy has become the first sup- plier of 2020 to cease trading. Ofgem has announced that it has chosen Bulb to absorb 9,000 domestic customers and a small number of non-domestic cus- tomers held by the Hampshire- based company. Gnergy was issued a final order in October last year for its failure to pay more than £673,800 in renewables obliga- tion (RO) payments. It was listed by Ofgem in December as owing more than £680,000 in RO pay- ments plus interest. In January this year the regu- lator announced that it issued Gnergy with a notice of failure to comply with a final order. Ofgem said Bulb was offering customers a competitive tariff and that all outstanding credit balances, including money owed to both existing and former domestic customers of Gnergy, would also be honoured. Bulb will absorb the cost of honouring customers' credit balances and the migration of customers. Bulb currently provides power to more than 1.6 million customers in the UK. ELECTRICITY Total buys stake in Welsh wind project French oil giant Total has agreed to buy an 80 per cent stake in a floating offshore project from Simply Blue Energy. The 96MW wind farm, named Erebus, will be built near Pem- broke Dock in Wales in waters up to 70 metres deep in the Celtic Sea. The two companies have formed a joint venture named Blue Gem Wind to develop floating wind farms in the area and recently submitted an application to the Crown Estate for their first demonstration project. Erebus will make use of Principle Power's WindFloat foundations. "With its entry into floating offshore wind, Total confirms its ambition to contribute to the development of renewable energy worldwide," said Patrick Pouyanné, Total's chairman and chief executive. "Floating offshore wind is an extremely promising and technical segment where Total brings its extensive expertise in offshore operations and maintenance. Total has the appropriate skills to meet the technologi- cal and financial requirements that determine the success of future floating offshore develop- ments." The world's first floating offshore wind farm was officially opened off the coast of Scotland in October 2017. A study released by the Crown Estate in 2018 found that floating wind capacity in the UK could reach up to 20GW by the middle of the current century. Loughlin: deal is 'great news for shareholders' Affinity said that the intro- duction of step testing demon- strated the company's dedica- tion to leakage detection work to its customers and the high priority it is placing on meeting leakage targets. Earlier this year, chief executive Pauline Walsh said dividends would be reinvested for five years to tackle leakage and protect the environment. This week

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