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UTILITY WEEK | 23rd - 29Th MaY 2014 | 19 Finance & Investment This week SSE wins Peterhead voltage control deal One-year £6m contract to provide capacity will stabilise voltage in aberdeenshire National Grid has awarded SSE a £6 million contract to keep Peterhead gas-fired power sta- tion on the system, it announced on Monday. Under the one- year agreement, SSE will be required to provide up to 780MW of Peterhead's 1,180MW capacity at 24 hours' notice. The power plant will no longer take part in the market. The deal is to reduce network risk and maintain stable voltage in the Aberdeenshire area. A National Grid spokesman said the system operator could manage without Peterhead but considered it "prudent" to have it as a back-up option. It is a separate measure to the supplemental balanc- ing reserve (SBR) proposed by National Grid to make sure there is adequate supply over the coming winters, when the amount of spare capacity on the system is set to fall. SSE may tender Peterhead for the SBR but cannot hold both contracts simultaneously; if the company decides to take part in the SBR it will have to give up the contract for voltage control. SSE is continuing to invest £15 million in improving Peterhead's flexibility and efficiency. It is also pursuing a commercial-scale carbon capture and storage plant at the site, in partnership with Shell, as part of a £1 billion government programme. MD EnErgY RWE downgrades earnings outlook RWE is latest energy company to cut its earnings outlook for 2014, reflecting mild winter weather and the sale of its upstream oil and gas business. The German-owned utility group is expecting an operating result of €3.9 to €4.3 billion (£3.2 to £3.5 billion) for 2014. That follows the sale of its upstream oil and gas unit RWE Dea to Rus- sian consortium LetterOne for €5.1 billion (£4.1 billion). RWE posted earnings before interest, tax, depreciation and amortisation (Ebitda) of €2.6 billion (£2.1 billion) in the first quarter of 2014, 16 per cent lower than the same period last year. Profits were hit by reduced gas demand and continuing tough conditions for conventional power generation. ELEcTrIcITY Ecotricity saves British wind firm Ecotricity has bought small wind firm Evance out of administra- tion in a last-minute rescue deal. The Loughborough firm went into administration last month, and Ecotricity has bought its premises, plant and intellectual property. It will bring staff into a new company trading under the same name. This is because administrators prevented the out- right purchase of the company. Evance had been designing an "innovative new windmill". Ecotricity said Evance's investors were "spooked" by the government's "increasing anti-wind rhetoric" and cuts to the feed-in-tariffs available for onshore wind. gas Egdon becomes UK's number two in shale Oil and gas developer Egdon Resources is set to become the UK's second largest shale gas player aer it announced a deal for Alkane Energy's shale gas assets. The deal would result in Egdon Resources doubling its shale gas acreage in the UK to 140,000 acres, while it would also acquire around 9 trillion cubic feet of unconventional gas. Ten licences have been trans- ferred between the companies, with two in the East Midlands basin and one in the Bowland basin "having the most shale gas potential". That would put the newly enlarged Egdon Resources behind IGas, which last week announced the acquisition of rival Dart Energy. A conditional purchase agreement for Alkane Energy's onshore shale gas assets has been agreed, with Alkane Energy gaining a 21.55 per cent share in Egdon Resources. Peterhead will no longer take part in the market credit ratings agencies s&P and Moody's have put centrica on downgrade watch, reflecting tough wholesale market conditions and increased political risk. The energy giant issued a profit warning on 8 May and put three unprofitable gas-fired power stations on the market. centrica's share price has yet to recover from Labour's energy price freeze pledge in September. Shares were trading at 325p on 20 May, down from 400p before Labour's bombshell. Following months of intense political pressure on the energy sector, Ofgem is expected to confirm a referral to the Competition and Markets Authority in the coming weeks. s&P said centrica was the most exposed of the big six suppliers to the "unfavourable political climate" because of its leading market positions, especially in gas. Stock watch CentriCa share priCe, May 2013 - May 2014 420 400 380 360 340 320 Jun Jul Aug Oct Nov Dec Jan Feb Mar Apr May Sep