Utility Week

UTILITY Week 4th April 2014

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UTILITY WEEK | 4Th - 10Th AprIL 2014 | 21 Finance & Investment Shares in EDF rose 3.4 per cent to a three-year high of €29.7 (£24.61) on Tuesday after it emerged that France's highest administrative court might order a retrospective tariff increase. If the French government's decision in July 2012 to limit a rise in regulated power tariffs to 2 per cent is overturned, retroactive bills of up to €40 may be sent to every household in France. Stock watch This week Bank backs offshore windfarm projects Lender invests £500m in two windfarms under construction as SSE pulls out of four others The Green Investment Bank (GIB) has committed £500 mil- lion to two offshore windfarms as SSE slashed projects worth £20 billion, in a mixed week for the sector. For the first time, the GIB is investing in windfarms that are still under construction. It is partnering with Japan's Marubeni to buy a 50 per cent stake in the 210MW Westermost Rough array from Dong Energy. The GIB is contributing £241 million to the deal, which is worth around £500 million in total. The lender is also taking a 10 per cent stake in RWE Innogy's 576MW Gwynt y Mor windfarm for £220 million. Maf Smith of RenewableUK said it was "great to see" the GIB invest at an earlier stage, which would help the industry to reduce risk and cost. Both projects use turbines from Siemens, which last week announced plans to build two factories in Yorkshire. Meanwhile, SSE showed less confidence in the off- shore sector in a surprise decision to step back from four major schemes worth nearly 12GW. As part of a move to "streamline and simplify" the business, SSE will pull out of the Galloper, Seagreen, Forewind and Islay schemes. It will focus efforts on the 750MW Beatrice array, which has a chance of securing early approval for subsidies. Jim Smith, SSE's managing director of generation development, said there were "two major, related hur- dles" to offshore wind development: limits on subsidy and supply chain costs. MD EnErgY Nuclear clean-up contract awarded Cavendish Fluor Partnership is the preferred bidder for a £6 bil- lion nuclear decommissioning contract, the Nuclear Decommis- sioning Authority announced on Monday. The consortium of Cavendish Nuclear and Fluor Corpora- tion is set to take charge of 12 nuclear sites, including Sizewell A, Dungeness A and Hinkley A, on 1 September. It will own the sites and bring in a new executive team, while Magnox and Research Sites Restoration Limited continue to provide the workforce. The Nuclear Decommis- sioning Authority said the deal would save taxpayers money. While it did not reveal the value of the contract, savings of "at least" £1 billion are expected, compared with a forecast cost of £7 billion over 14 years. EnErgY Brussels 'could delay gas investment' Things are looking up for invest- ment in gas-fired power stations in the UK, but the European Commission could still damage the market, industry figures have warned. The government's final design for a capacity market is "much more positive and bankable" for spurring invest- ment in new gas plant than previous dras, ESB executive director Paddy Hayes said at Marketforce's Future of Utilities conference last week. The first auctions are due in December. However, the timing is subject to the government's Electricity Market Reform (EMR) package securing state aid approval from the European Commission. The Commission has already raised substantial doubts about one element of EMR: subsidy for Hinkley Point C new nuclear plant. Keith Anderson, chief cor- porate officer at Scottish Power, said the Commission's reaction to Hinkley showed that state aid clearance "is going to be a long and tortuous process". EnErgY Scottish biomass schemes axed Forth Energy has cancelled three biomass projects in Scot- land, in another blow to a sector already squeezed by subsidy restrictions. Two of the projects, in Grangemouth and Rosyth, had received consent. The com- pany said it was "investigating options to attract other develop- ers to take the projects forward". Forth Energy withdrew its planning application for a third project, in Dundee, aer the council objected. SSE: streamlining and simplifying its business EDF sharE pricE (Euros), 28 FEbruary-31 march 2014 30.0 29.6 29.2 28.8 28.4 28.0 EDF sharE pricE (Euros), 26 march-1 april 2014 26 March 27 March 1 April 31 March 28 March 29.0 28.8 28.6 28.4 28.2 28.0 27.8 28 Feb 10 Mar 31 Mar 24 Mar 17 Mar

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