Utility Week

UTILITY WEEK | 28Th March - 3rd aprIL 2014 | 13 Finance & Investment This week Windfarm investor unfazed by Budget carbon tax freeze announced in Budget has not dampened enthusiasm for buying into wind power The carbon tax freeze announced in last week's Budget has not dampened enthusiasm for buying into wind power, according to a leading investor. Greencoat UK Wind expects to invest between £100 million and £200 million in windfarms next year, a partner in the fund told Utility Week. That could add stakes in three or four windfarms to a portfolio of ten acquired since its flotation in March 2013. The fund's managers remain upbeat about the sec- tor's prospects, despite an intervention by the chancellor that will hit revenues for operating windfarms. George Osborne announced last week he was fixing the carbon price support at 2015/16 levels of £18/tCO2, instead of hiking it as planned. The move relieves a burden on fossil fuel generators, suppressing the whole- sale power price and hitting revenues for low-carbon generators. Industry body RenewableUK warned that the freeze would jeopardise investment. However, Greencoat had anticipated the move, said partner Stephen Lilley. "We pinpointed what was going to happen with the carbon price support a while ago and factored that into our numbers." To date, the fund has bought from RWE, SSE and Ger- man energy company Baywa. From the utility's perspec- tive, such deals free up capital to reinvest in new projects. Greencoat is in conversations with "almost everyone" in the sector regarding potential acquisitions, Lilley added. "There is an awful lot in the pipeline." MD EnErgY Centrica consortium to buy Bord Gais A Centrica-led consortium has agreed a €1.1 billion (£920 mil- lion) takeover of the Irish state- owned energy company Bord Gais Energy (BGE). As part of the deal, Centrica will pay €210 million for BGE's electricity and gas supply busi- ness, which has approximately 650,000 residential gas and electricity customers and 30,000 business accounts. Centrica will also take ownership of the 445MW Whitegate gas-fired power station in County Cork. The other consortium mem- bers, iCON Infrastructure Partners and Brookfield Renewable Energy Partners, will acquire BGE's Fir- mus energy supply and regulated gas distribution assets in North- ern Ireland, and BGE's renewable generation assets respectively. WaTEr Regulated price rise boosts profit at UU United Utilities (UU) has forecast a rise in profit for the year end- ing 31 March 2014, following a regulated price rise of 5.8 per cent for that year. The price rise will "moder- ately" increase the company's underlying profit from £190 mil- lion before tax in 2012/13, it said. UU, which like many water firms is not taking its full allowed price increase this year, com- pleted an investment programme of £800 million in 2013/14. UU will announce its full-year results on 22 May. gas Cap will mean gas is 'the biggest loser' The cap on carbon price support unveiled last week will still leave carbon emitters facing higher emissions penalties, with gas-fired generation "the biggest loser", according to market analysts. Bloomberg New Energy Finance said the £18/tonne cap imposed on the carbon price top-up until 2019 in last week's Budget will leave UK emitters exposed to a carbon price in 2016/17 of more than £35 a tonne when the floor price forecast is about £29. This, according to the analysts, is largely buoyed by a forecast impact from the delayed auctions of European Union Emissions Trading System per- mits currently withheld under a "backloading" measure to shore up their price. Jonas Rooze, the lead Euro- pean power analyst at Bloomb- erg, said: "The cap will stop the all-in UK carbon price from exceeding the price floor trajec- tory by as much as it otherwise would. But carbon costs may still overshoot that line, and UK utilities will still pay more than the government planned when it set the trajectory in 2011." Windfarm acquisitions: 'plenty in the pipeline' shares in russian energy giant gazprom have fallen from a high of 153 roubles (260p) in February to about 120 roubles as tensions continue in Ukraine. Europe and the Us have frozen assets and imposed travel bans on wealthy russians and are threatening more sanctions. gazprom, which has a UK industrial retail business and exports gas to Europe, is a likely target for trade restrictions. however, this could lead to higher gas prices for European consumers. 154 145 136 127 118 Stock watch gazprom share price (roubles), 25 december 2013-25 march 2014 2014 February March

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