Utility Week

Utility Week 24th April 2015

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16 | 24TH - 30TH APRIL 2015 | UTILITY WEEK Finance & Investment Stock watch PENNON SHARE PRICE, 20 MARCH - 20 APRIL 860 810 820 830 840 850 23 Mar 30 Mar 7 Apr 13 Apr 20 Apr 950 700 800 750 850 900 PENNON SHARE PRICE, MAY 2014 - APRIL 2015 May 2014 2015 Jul Sep Nov Jan Mar Pennon announced its £100.3 million takeover of Bournemouth Water on Thursday last week, funded by a new share issue. Analysts said the move should "provide an incremental 5 per cent growth in South West Water's regulated capital value." Pennon's share price increased from 833.50 pence per share on the morning of announcement to 850 pence on Monday, the highest it has been since the end of February. This week Ovo moots stake sale to private equity firm Supplier founded in 2009 could use multi- million pound equity injection to speed up growth Independent energy supplier Ovo Energy is considering selling a large minority stake to a London-based private equity group, which has valued the company at more than £200 million. An Ovo spokesperson told Sky News on Friday that the company was in "advanced discussions" with Mayfair Equity Partners on a deal, which could be signed as early as Friday, and will be the first institutional money taken by Ovo since it launched in 2009. It is understood to be designed to provide Ovo with funds to accelerate its growth at a time when the energy market is under intense political and regulatory scrutiny. The Competition and Markets Authority (CMA) will soon publish its provisional findings aer a year-long probe into the sector, which is dominated by the big six vertically integrated energy suppliers. When Ofgem first referred the energy market to the CMA, energy secretary Ed Davey said it would "super- charge" the growth of independent energy. In its initial submission to the CMA investigation last year, Ovo argued that the big six used the relatively inac- tive customer base to their advantage, in some cases by charging higher rates to "stickier" customers in order to cross-subsidise loss-leading tariffs, which compete with smaller new market entrants. The company argued that its rapid growth in recent years came despite the structure of the market, which has impeded its progress as a new entrant. JA ELECTRICITY Flamanville safety fears may hit Hinkley Fresh safety concerns over EDF's Flamanville new nuclear reactor could spell delays for the com- pany's planned Hinkley Point C project, investors have warned. The Flamanville reactor is under construction in France and is already suffering from lengthy cost and time over- runs. Last week, fresh concerns emerged over flaws in the manufacture of an element key to the reactor's safety. Resolving the problem could mean further lengthy delays. According to reports, the French nuclear authority has been informed of "manufactur- ing anomalies" resulting in a potential weakness in the steel used to make the safety casing around the reactor. UK investors noted on Mon- day morning that the impact on EDF's earnings and the cost of the Hinkley project are likely to be negligible. But analysts at RBC Capital said it could result in further delays to the Hinkley Point C final investment deci- sion (FiD). "[T]here is a likely impact to the timing of the FiD… In sum- mary, this is very worrying, and the fact that EDF has not elabo- rated on the possible impact does not help," said analysts at RBC Capital. A spokesperson for EDF was not immediately available to comment. ELECTRICITY Shetland looks at new generation Scottish Hydro Electric Power Distribution (SHEPD) has opened a tender for a future energy solution for Shetland. The SSE subsidiary has been working with energy regula- tor Ofgem to deliver an open, competitive process to ensure the most economic and efficient option is taken forward when the Lerwick Power Station comes to the end of its operational life. Prospective bidders are being asked to submit expressions of interest and complete a pre- qualification questionnaire by midday on Friday 8 May 2015. WATER Severn Trent tests holographic radar Severn Trent will move forward with the next phase of testing for the world's first holographic radar system. Aer finding that two tur- bines it installed at a treatment works interfered with radar at East Midlands Airport, it has undertaken to develop a radar system that is not vulnerable to interference from turbines. It is working with specialists Aveillant on the technology. Ovo: big ambitions

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