Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/327828
20 | 13th - 19th June 2014 | utILItY WeeK Finance & Investment This week Energy firms 'leant on central investment' national Grid chief executive says uK energy sector got away without investing in infrastructure The UK energy sector got away without investing in new infra- structure as a result of the work completed prior to privatisation, according to National Grid's chief executive. Speaking at a conference in London on Tuesday, Steve Holliday said the energy sector rested on the "massive investment" made prior to privatisation. Holliday said: "The huge investment [was made] under what was essentially a centrally planned model and we leant on that massive investment." He added that the "huge fall in electricity demand" due to the recession also allowed the sector to delay investment further. "That just meant we could get away with it for a lot longer than anyone would have thought without building new generation." Coupled with this, he said "the energy market today does not work" and while he would usually be in favour of limited interventions, the interventions being made under Electricity Market Reform (EMR) and the capacity mechanism "are the right interventions at the right time". In a wide-ranging panel debate, Holliday said the UK energy sector "struggles with inertia without some form of intervention" and that the degree of certainty pro- vided under RIIO "has facilitated an enormous amount of investment in our energy infrastructure", including National Grid's £25 billion investment programme. Basil Scarsella, chief executive at UK Power Networks, agreed that there is now more certainty in the sector, and said "the UK is again leading the world on energy policy given the changes that are taking place". MB eLectrIcItY Good Energy issues bond for windfarm Good Energy is issuing a local bond to help finance its planned Big Field windfarm in north Cornwall. Individuals living in Cornwall can invest as little as £50 and receive a "competitive" interest rate, if plans for the windfarm are approved. Those living closest to the proposed 11-turbine wind- farm site will get higher returns. The amount to be raised and precise terms have yet to be decided. Chief executive Juliet Davenport said the interest rate would be "comparable to" the 7.25 per cent offered by Good Energy Bonds issued last year. Davenport said: "We believe in a 100 per cent renewable future and Cornwall is leading the way. We think that the com- munities helping to make this happen, by hosting new wind and solar projects in their area, should share in the benefits. One way of achieving this is to enable people to make a financial invest- ment in those developments." Water £100m Severn Trent contracts for Amey Severn Trent Water has awarded service provider Amey two con- tracts worth £100 million over an eight-year period. The water company extended Amey's meter installation repair and maintenance contract by three years, with an option to extend it for another three years. It also appointed Amey as the design and build partner to pro- vide developer services across its network for the next five years. Severn Trent water services director Andy Smith said: "The vision for the next five years is all about improving customer service and investing efficiently so that we continue to deliver the lowest bills in England and Wales for our customers. We're sure Amey will help us to achieve that." Severn Trent has worked with Amey for almost 20 years. eLectrIcItY Q1 wind turbine contracts 'steady' The number of UK wind turbine contracts awarded over the first quarter of the year was "at steady levels" to those seen over the previous quarter and just slightly lower than seen at the same time last year, according to a report from the Energy Indus- tries Council (EIC). The EIC said Q1 2014 saw 11 wind turbine supply contracts awarded: one for offshore wind, six in England, one in Northern Ireland and three in Scotland. The number of contracts is slightly higher than the 10 awarded in the previous quarter and slightly lower than the 12 contracts offered in Q1 2013. Bright future: National Grid to invest £25 billion Stock watch 5.40 5.30 5.20 5.10 5.00 Iberdrola share prIce, 10 May - 10 June 10 May 19 May 26 May 3 Jun 9 Jun 5.40 5.00 4.60 4.20 3.80 Iberdrola share prIce, June 2013 - June 2014 Jul 2013 Oct Jan 2014 Apr Jun Iberdrola shares rose after the Spanish energy company secured a gas supply contract for 1 billion cubic metres a year. On 30 May, it struck a 20-year LnG supply deal worth £2.5 billion with US firm cheniere. under the contract, customers of uK subsidiary Scottish Power will have access to uS shale gas from 2018. also last month, chief executive Ignacio Galan was awarded the cBe in recognition of the company's investment in uK energy through its Scottish Power businesses.