Utility Week

UTILITY Week 11th September 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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Finance & Investment Stock watch UNITED UTILITIES SHARE PRICE, 3-8 SEPTEMBER UNITED UTILITIES SHARE PRICE, 11 AUGUST - 8 SEPTEMBER The share price of parasite-riddled United Utilities recovered in the second week of September aer an almost month-long battle with the cryptosporidium bug that affected the water supply to 300,000 households in Lancashire. The price fell almost 8 per cent from 898.5p to 828p following the boil notice issued in early August, but the shares recovered to above 879p on 8 September as the notice was lied. This week Hinkley Point C faces further delays EDF to confirm power plant's commissioning date once final investment decision is made French utility EDF has suggested that its flagship Hinkley Point C nuclear power plant will not start generating power in 2023 as originally planned. The company would not confirm a commissioning date for the £24.5 billion project, but at a press conference last week, EDF's chairman, Jean- Bernard Lévy, confirmed that it "will be updated at the point when [the final investment decision] is made". The long-awaited deal, which includes investment from Chinese state-owned companies, is expected to be announced in October during the visit to the UK of the Chinese president, Xi Jinping. At the same time, UK prime minister David Cameron is poised to complete a deal with China that will allow it to build a prototype nuclear reactor at a site in Bradwell, Essex. EDF is expected to sell its rights to the Bradwell development site in return for China's financial support for the Sizewell and Hinkley Point projects. Lévy added that, although the final investment decision on Hinkley has been pushed back from the initial forecasts, the construction time would remain unchanged at nine years. This would put the commissioning date for the plant at 2024. RBC Capital analyst Martin Young said that while the Hinkley delay was a topic of conversation during the Q&A at the press conference, "no visibility was given on potential cost uplis, although the possibility of a revised timetable was alluded to". LV ENERGY Eggborough could close in March 2016 Eggborough Power (EPL) has announced that Eggborough power station could close at the end of March 2016. The 2GW coal-fired power station requires an additional £200 million over the next three years to continue generating power. Owner EPL said this level of investment is "financially unsustainable". The company warned in 2014 that a closure at the end of 2015 was likely because of the esca- lating carbon tax and the invest- ment needed to meet European Union emissions standards. EPL said consultations with staff and talks with government bodies are underway. Chief executive Neil O'Hara said: "We intend to conduct a thorough consultation process with our employees and their representa- tives while we continue to con- sider all options available to us." The closure could result in the loss of 240 jobs. GAS Act now to drive gas storage investment The government must use its annual energy statement this month to review the need to unlock new investment in gas storage, an industry analyst has warned. Clive Moffatt of Moffatt Associates urged the government to act now to manage the risks associated with increases in the level of import dependency and the volume of intermittent renewable energy generation. To unlock new investment, the government should impose an obligation on suppliers and shippers to hold a certain proportion of their gas in store ahead of every winter, Moffatt said. This would be the "simplest and most cost-effective solution because it is market-based". Gas will become the predomi- nant source of both heat and power by 2030, he added, and although the UK has "ample import capacity", it is vulnerable in the short term. WATER CMA to streamline water M&A process The Competition and Markets Authority (CMA) has set out its plans for a streamlined process that could approve water mergers within 40 days. Under the cur- rent system, water mergers are automatically referred to a more in-depth (phase 2) investigation, which can take six months. The CMA's proposals would bring water mergers in line with the other M&A cases it deals with, where a phase 1 investiga- tion is conducted first and can lead to straightforward deals being approved promptly. The consultation closes on 15 October. Hinkley Point C: commissioning date put back UTILITY WEEK | 11TH -17TH SEPTEMBER 2015 | 19 920 900 880 860 840 820 800 11 Aug 18 Aug 25 Aug 1 Sep 8 Sep 900 880 860 840 820 3 Sep 4 Sep 7 Sep 8 Sep

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