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18 | 10th - 16th OctOber 2014 | UtILItY WeeK Finance & Investment This week Renewables funding increases to £300m Government extends budget for renewable energy subsidies in cfD scheme by £95 million The government has extended its budget for renewable energy subsidy payouts by £95 million from the levels suggested in July this year, to a total of £300 mil- lion in funding for the contracts for difference (CfD) scheme. The Department of Energy and Climate Change (Decc) said on Thursday that the £300 mil- lion included in its Levy Control Framework (LCF) would be divided into two separate pots for established technologies, such as onshore wind and solar farms, and less established technologies, such as offshore wind and marine power. The budget for biomass support is not included in the £300 million LCF, Decc said. Established technologies will compete for a total of £65 million, of which £50 million will be awarded to projects that begin operations in 2015/16, with a further £15 million reserved for projects commissioning from 2016/17 onwards. Less established technologies will compete for a larger pot of £235 million, of which £155 million is ear- marked for projects beginning operations from 2016/17, with a further £80 million for projects commissioning from 2017/18 onwards. "The government is able to increase the CfD budget because the latest estimates of the overall costs of other policies, in particular the Renewables Obligation, are lower than expected. This will help to ensure there is enough funding available to encourage competition in the auction," Decc said in a statement. JA enerGY Decc closes subsidies to large-scale solar Support under the Renewables Obligation for new large-scale solar farms above 5MW in size will close by 1 April 2015. The Department of Energy and Climate Change (Decc) said subsidies for larger solar farms have been cut to ensure "bill payers are seeing the benefits" of the sector growing and becom- ing "increasingly competitive". Projects that had made "sig- nificant financial commitments" by 13 May 2014, when the consul- tation on the proposed changes began, will be eligible for a grace period, which Decc is set to con- sult on. This grace period would give projects that have been awarded preliminary accredita- tion by 13 May 2014 or those that can demonstrate their significant investments, a 31 March 2015 deadline for completion. Water UU reduces planned totex by £370m United Utilities (UU) has cut its planned PR14 total expenditure by £370 million in its response to Ofwat's dra determination. UU has proposed cutting the totex gap between its initial submission and the regulator's dra determination – which was published in August – from £1 billion to £630 million. This includes scaling back about £90 million of activity associ- ated with the 2020/25 early start projects under the National Envi- ronment Programme (NEP5) and trunk mains resilience activity. The remaining £280 million of the proposed reduction is said to come from cost efficiencies, bringing UU's overall wholesale totex for 2015/20 down from £5.89 billion in June's initial business plan, to £5.52 billion. enerGY Ineos buys CHP plant at Grangemouth Chemical giant Ineos has bought the gas-fired power plant that supplies its Grangemouth refinery for £54 million, saying it could be fuelled by shale gas from its recently acquired licence block nearby. The acquisition of the 145MW combined heat and power plant from Fortum follows news that Ineos will take a majority stake in Dart Energy's shale project, which lies close to the Scottish refinery. "Competitive, efficient energy is a critical element necessary to secure the long-term future of the Grangemouth site," a state- ment from the company said. An Ineos spokesman con- firmed that it intends to use gas extracted from the licence block to fuel the plant, which supplies power to its petro- chemical refinery. Offshore wind: competing for £235m of funding Stock watch 660 650 640 630 620 drax share price, 8 september - 6 october 8 Sep 15 Sep 22 Sep 29 Sep 6 Oct 740 720 700 680 660 640 620 600 drax share price, 7 april - 6 october 2014 May Jul Sep Oct at the start of October the share price of coal generation giant Drax slumped to 618p – its lowest level since May – as the government outlined its funding pots for established and less-established renewable technologies, with no nod to biomass. "this should have been largely expected [by the market], but we would still expect Drax shares to be weak on the news," said analysts at rbc capital. Jun Aug