Utility Week

UTILITY Week 23rd October

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16 | 23RD - 29TH OCTOBER 2015 | UTILITY WEEK Finance & Investment Stock watch 2260 2220 2180 2140 2100 SEVERN TRENT SHARE PRICE, 18 SEPTEMBER - 18 OCTOBER 1000 980 960 940 920 900 UNITED UTILITIES SHARE PRICE, 18 SEPTEMBER - 18 OCTOBER Share prices for Severn Trent, United Utilities and South West Water parent company Pennon continued on their steady upward trajectory despite warnings from Ofwat that PR19 would be tough. Whitman Howard analyst Angelos Anastasiou said the warnings "refer to a time period that is currently beyond the radar screen of most investors". Severn was up from 2,200p to 2,246p, UU from 924.50p to over 980p, and Pennon from 782p to 817.39p. This week Energy infrastructure spend hits £15bn Energy saw record investment last year on kit and networks, but solar was a big loser The energy sector invested a record £15.1 billion in new generation, networks and sup- ply infrastructure in 2014, an increase of 4 per cent on 2013 investment, according to EY analysts. In a report, EY said invest- ment in conventional generation was flat at £200 million last year, mainly because of the ongoing construction of Carrington Power's 880MW combined cycle gas turbine plant, scheduled to start generating in 2016. Investment in renewable generation rose 6 per cent on 2013 to more than £9 billion. However, investment in different technology types var- ied substantially. While wind saw an increase of 35 per cent, solar fell 15 per cent. EY put this down to a reduc- tion in the level of support available for the technology. It is expected that there will be another rush to com- mission new projects in the first quarter of 2016, before the Renewables Obligation is closed to smaller solar farms, and proposed changes to the rules around access to the feed-in tariff are introduced, analysts said. The report further predicted that onshore wind invest- ment would fall aer the government's decision to end the Renewables Obligation earlier than anticipated. "Future renewables investment is likely to be con- strained by recent changes to the support regime for low-carbon technologies, the potential lack of budget for further contracts for difference allocations to 2020 and the lack of visibility on the level of funding beyond 2020," it added. LV ELECTRICITY EDF 'looking at €10bn assets sale' EDF is poised to dispose of assets worth up to €10 billion in an effort to shore up reserves ahead of the capital intensive Hinkley Point nuclear develop- ment project, according to media reports. The French state-owned utility is thought to want to tackle its debt pile by selling the upstream exploration activities of Italian subsidiary Edison, as well as its stake in American nuclear group CEGN. The news comes as an invest- ment decision is expected immi- nently on the Hinkley Point C new nuclear deal. That deal would be the first new nuclear build in the UK in a generation but the financial risks involved could damage the company's credit rating. ELECTRICITY Ecotricity launches third 'ecobond' Renewables supplier Ecotricity has launched its third "ecobond" to raise up to £25 million to fund the construction of six green energy projects in Britain. Ecobond three will offer Ecotricity customers a return of 6 per cent per annum, or 5.5 per cent for ordinary investors. The money will help fund 20.7MW of renewable generation from five windfarms and one solar farm. Ecotricity issued ecobond one in 2010, and ecobond two in 2011, both of which raised £10 million. Ecotricity founder Dale Vince said: "When we launched the first ecobond five years ago, it was a fairly radical idea. We wanted to give people the chance to share in the financial benefits of the green energy revolution as well as cutting out the banks that generally charge borrowers more than they pay investors. "Ecobond three stays true to that philosophy." WATER Reforms could hit water credit ratings Upstream reform could result in a "significant deteriora- tion" of the credit quality of UK water companies, Moody's has warned. The credit rating agency said in a report that reform to upstream activities, such as water resourcing and sludge treatment, could significantly damage the financial standing of incumbents. It stated that if full functional unbundling of the value chain was implemented, it would introduce volatility into com- pany cashflows because of the potential influx of new entrants in various sectors of the industry. Wind generation investment was up 35 per cent 18 Sep 18 Oct 8 Oct 18 Sep 18 Oct 8 Oct

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