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UTILITY WEEK | 6Th - 12Th JUnE 2014 | 19 Finance & Investment This week UK losing renewable investment appeal UK drops below Canada in index of renewable investment attractiveness, to sixth place Canada has overtaken the UK in the attractiveness rankings for renewables investment, accord- ing to the latest quarterly report by EY. The UK has fallen in the renewable energy attractiveness stakes for the second quarter run- ning to sixth place, the consultancy said. That is its low- est position in the global rankings since November 2012. EY attributed the drop to conflicting signals over the future of energy policy aer next year's general election and an unexpected review of solar subsidies. Mean- while, Canada's position was boosted by a new auction programme for utility-scale renewables. Ben Warren, environmental finance leader at EY, said: "Policy tinkering and conflicting signals once again become too much for investors and developers to handle. The recent carbon tax freeze, an energy market competition probe and Conservative Party plans to scrap onshore wind subsidies post-2015 are weighing heavily on the sector's ability to assess the long-term outlook." It is a mixed picture for different technologies. The UK remains number one for investment in offshore wind and marine power, but fell to sixth place in onshore wind. Renewable UK's chief executive Maria McCaffery accused the Conservatives of being "anti-business" in failing to back onshore wind: "The Chancellor's decision to freeze the carbon price support which taxes pollution, combined with his party's short-sighted perspective on onshore wind, have severely undermined what should be one of our fastest-growing industrial sectors." The US tops the rankings, followed by China. MD ELECTrICITY Interconnector cap and floor proposed Developers of electricity inter- connectors are to earn regulated returns under Ofgem proposals to encourage more cross-border links. The regulator is proposing a "cap and floor" framework to give developers greater confidence their investment will pay off. Once the interconnector is oper- ating, if revenues exceed the cap, the surplus will be paid back to consumers. If revenues fall below the floor, consumers will pay for a top-up to the level of the floor. The UK has four electricity interconnectors with a combined capacity of 4GW. A report com- missioned by government from consultancy Redpoint last year estimated adding 5GW of capac- ity by 2040 would benefit UK consumers by up to £9 billion. Ofgem expects to start con- sidering applications under the new regime in the autumn. WaTEr South West boosts profit for Pennon South West Water's owner, Pen- non, has reported a 9 per cent rise in full-year pre-tax profit to £207.3 million due to the strong financial performance of the water company. The water company's profit before tax rose 10.8 per cent to £162.5 million, while its sister waste management company, Viridor, posted a 19.5 per cent fall to £27.6 million. South West Water's operat- ing profit increased by 5.7 per cent to £227 million, while revenue increased 4.3 per cent to £520 million as a result of tariff increases, new connections and "higher other sales". Ken Harvey, Pennon's chair- man, said South West Water was "well placed to outperform its assumptions" in its preliminary financial results for the year ending 31 March 2014. WaTEr Severn Trent reports 4.3pc rise in profit Severn Trent underlying profits rose 4.3 per cent to £517 million in the year ending 31 March 2014, it reported last week. Modest growth in the regulated water business made up for a "disappointing" year in its services arm. In the first results announce- ment since Liv Garfield joined as chief executive eight weeks ago, she highlighted the need for operational improvements. The bulk of profits were in the regulated water business, which reported a 1.4 per cent rise in turnover to £1,857 million on higher metered consumption over a dry summer and a 2 per cent price rise. Operating costs increased by 3.1 per cent. Solar subsidies: unexpected review Centrica shareholders shrugged off the surprise exit of British Gas managing director Chris Weston, as revealed on 29 May. Indeed, shares at the energy giant rose by 2 per cent on the news Weston will leave to head international generator hire firm Aggreko next year. Meanwhile, Aggreko shares dipped 5 per cent. Weston had been in post less than 18 months and kept a fairly low profile. He is one of three top Centrica executives expected to leave this year. 338 336 334 332 330 328 326 1760 1740 1720 1700 1680 1660 1640 Stock watch CentriCa share priCe, 27 May - 2 June aggreko share priCe, 27 May - 2 June 28 May 28 May 29 May 29 May 30 May 30 May 2 Jun 2 Jun 3 Jun 3 Jun