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Finance & Investment Stock watch 10.0 9.5 9.0 8.5 8.0 7.5 EON SHARE PRICE, 9 - 15 SEPTEMBER 12 11 10 9 8 7 Aug 18 Aug 25 Sep 1 Sep 8 Sep 15 Sep 10 Sep 11 Sep 14 Sep 15 EON SHARE PRICE, 18 AUGUST - 15 SEPTEMBER Eon's share price fell almost 20 per cent in less than a week aer the news that the German government will close a legal loophole that could have saved the company billions in nuclear dismantling costs. Shares in the company were trading at €9.90 on 9 September but opened more than 5 per cent lower the next morning and traded down to lows of €7.55 less than a week later. This week Eon hit as Germany closes legal loophole Berlin says company will not be able to avoid costs of government-mandated nuclear shutdown Eon's share price has taken a heavy hit and its credit outlook turned negative aer the German government moved to close a legal loophole that could have saved the company billions in nuclear dismantling costs. Eon has axed plans to offload its nuclear assets to spin-off company Uniper aer Berlin said it would not be allowed to shrug off the costs of the government-mandated nuclear shutdown aer five years. Chief executive Johannes Teyssen announced the decision late on 9 September, causing shares in the company to plunge 19 per cent in less than a week as investors warned that Eon's best laid plans to counter an increasingly difficult market now lie in tatters. Nuclear impairment charges, which reached €16.5 bil- lion (£12 billion) at the end of last year, mean the com- pany is now expected to post a loss in 2015 in the high single-digit billion euros. Also, credit ratings agency Moody's revised its outlook for the company from stable to negative, saying that by holding these nuclear assets, the company will be exposed to increasing political risk and scrutiny over nuclear decommissioning. "Nowhere is there a comparable precedent for sepa- rating asset ownership from liability and making this liability unlimited in duration and scope" Teyssen said. Eon will continue with its plans to spin-off its conventional generation assets to focus on customers, networks and renewable energy, but it will be saddled with managing the shutdown of its nuclear plants, to be managed by a separate entity called PreussenElektra. JA ENERGY Policy changes make investors nervous Renewable energy developers face a tougher battle to secure financial backing from major lenders aer the recent spate of policy changes that have shaken investor confidence, according to a recent report. A survey conducted by advisory firm EY found that over half the active renewables inves- tors surveyed said they would not be willing to plough more money into the sector before the amended Energy Bill becomes law next year. The lenders said this was largely because of the political and regulatory risk aer the government decided to close the Renewables Obligation (RO) in 2016 rather than 2017. EY assistant director Matthew Yard said the government's actions have already made securing project finance "more complex, more expensive and increasingly difficult since the announcement of the early closure of the RO". ELECTRICITY Clean energy fund targets Highlands An SSE-backed clean energy fund is to invest £9 million in Hamsin Wind to fund 200 com- munity-based single onshore wind turbines in Scotland. The Scottish Equity Partners' (SEP) £135 million Environmen- tal Capital Fund, in which SSE is the largest investor, will invest in Hamsin Wind to fund the rollout of turbines in Highland and Island communities. Farmers and landowners will have the opportunity to install the 20-metre-high grid-connected turbines on their properties and benefit discounted power charges for 20 years and beyond. The first turbines will be operating in Orkney this month. ENERGY Engie targets B2B energy storage Engie has taken its first steps into tapping the emerging energy storage market with a £4 million investment in California- based start up Advanced Micro- grid Solutions. The energy company, for- merly known as GDF Suez, said the investment in the utility- scale storage company would expand its efforts to develop the first comprehensive B2B energy storage solution in Europe. Energy storage has emerged this year as an attractive option for businesses trying to exploit increasingly cost effective on-site energy generation and thereby reduce bills. Engie said the technology offered by AMS could allow business customers to shave 25 per cent from their peak power demand. Eon is now expected to post a loss for 2015 UTILITY WEEK | 18TH - 24TH SEPTEMBER 2015 | 15