Utility Week

UTILITY Week 16th October 2015

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Finance & Investment Stock watch 25 60 20 15 40 10 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 20 5 0 EON SHARE PRICE, 2011 - 2015 RWE SHARE PRICE, 2011 - 2015 Shares in German utility giants Eon and RWE bounced higher on Monday 11 October aer the German government approved their nuclear phase-out stress test results. Shares are still between 50-75 per cent lower than when the government announced on 29 May 2011 that the companies would be forced to spend billions of euros to close nuclear power plants by 2022. At the start of 2011, RWE and Eon shares traded at €55.25 and €25.05 respectively. This week Eon and RWE 'can afford nuclear costs' German government insists the two energy gi- ants can afford the bill for nuclear phase out German energy giants Eon and RWE will be able to shoulder the nuclear dismantling costs demanded by the government as part of its nuclear phase out plans, according to the ministry of economic affairs and energy. The German government said over the weekend that Eon and RWE – the parent companies of Eon UK and Npower respectively – have passed their stress tests with "sufficient" financial provisions to take the multi-billion euro hit. Concern over the future of the two has grown steadily in recent years as market conditions have worsened. On top of this, they face looming nuclear decommissioning costs aer the government in May 2011, in the wake of the Fukushima nuclear scare, said the country would close all its nuclear power plants by 2022. Since the announcement, RWE's share price has shed over 82 per cent, falling to €9.60 on Friday 9 October, while Eon's share price has fallen over 70 per cent to €7.38 over the same period. Both companies have seen their share prices climb 40-50 per cent aer the positive stress test results. The government has agreed with the companies' provisions, which are set at €38.3 billion, based on an estimated total cost for the dismantling process of €47.5 billion, or €857 million per reactor. The stress test also found that overall costs could be reduced by €6 billion if efficient dismantling procedures were adopted. JA WATER CGI wins £15m water market IT contract The Open Water programme has moved into the next phase with CGI being awarded a five-year, £15 million contract to design, build and operate the central IT system for the English water market. The company will build the central IT infrastructure by adapting a system used in Holland and Denmark for their electricity markets for use in the non-domestic water market in England, which opens in April 2017. CGI has formed a strategic partnership with Bridgeall, which was involved in the open- ing of the market in Scotland, to develop the billing system that will calculate usage charges and allocate them to the relevant wholesalers and retailers. The design phase of the central IT system is due to be completed this November, with a functioning system built by April 2016, ahead of testing and shadow operation later that year. WATER Scot Water spend slipping, warns Wics Scottish water regulator Wics has raised concerns over delays in Scottish Water's investment programme in its five-year regu- latory period report. Wics said delays in imple- menting improvements to water treatment works and wastewa- ter discharges had resulted in delays to customer and environ- mental benefits. Scottish Water accepted that there had been delays and gave assurances that the remaining projects would be delivered as soon as possible, and that measures had been put in place to improve asset management mechanisms for 2015-21. ELECTRICITY GIB offshore wind fund reaches £818m The Green Investment Bank (GIB) has raised £355 million in a second round of funding for its offshore wind fund, bringing the total to £818 million. This is close to its target of £1 billion, and makes the fund the largest of its kind in the UK. Second round investors included Swedish life insurance and pension company AMF Pen- sionsforsakring and Strathclyde Pension Fund. The close of the second tranche of funding has been marked with the acquisition by the fund of GIB's option on a 10 per cent stake in the 576MW Gwynt y Mor offshore windfarm, located in Liverpool Bay, which was officially inaugurated in June this year. All nuclear plants will close by 2022 22 | 16TH - 22ND OCTOBER 2015 | UTILITY WEEK

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