Utility Week

UTILITY Week 6th November 2015

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Page 13 of 31

Finance & Investment This week Cuts sink water firms' renewables plans Water companies' renewable energy plans in doubt as government proposes cuts to support South West Water (SWW) and Affinity Water said last week that plans to invest in renewable energy could be shelved because of the government's proposed cuts to renewables support. SWW warned that proposed cuts to the feed-in tariff (FIT) could put "significant pressure" on its £18 million renewable energy investment plans. And Affinity Water has for a second time been forced to shelve plans. SWW has a target to increase the amount of energy it generates from renewable sources from 6 per cent to 20 per cent by 2020, and its 2015/20 business plan outlines measures to achieve this, such as the development of three advanced anaerobic digestion plants. A spokesperson told Utility Week SWW is also inves- tigating the viability of private wire solar opportunities with external developers and community energy groups. Wind, solar and hydro account for £11 million of the total £18 million investment. However, SWW warned that the proposed closure of the FIT to new applicants by January 2016, or a cap on new FIT expenditure, would put pressure on its future investment plans. Meanwhile, Affinity Water first proposed in 2011 a project to install 50kW of solar across ten of its pumping stations, but had to scrap its plans aer external funding was withdrawn due to changes in government policy. Following the threat of further cuts this year, the firm has again had to abandon its plans, but expects to invest in solar when "reduced capital costs negate the require- ment for subsidies". LV RENEWABLES Anglian invests in power from sewage Anglian Water will invest mil- lions of pounds over the next five years to roll out a process of producing power from recy- cled sewage. The company has invested £230 million over the past ten years to enhance the treatment process at nine of its largest water recycling centres, and in the past year, generated 88.6GWh of power. The electricity is produced by anaerobically digesting sewage sludge, a by-product of the water recycling process. The anaerobic digestion process produces a biogas, which is channelled into engines to be converted into heat and electricity. Matt Pluke, Anglian Water energy manager, said part of the firm's strategy was to reduce its carbon footprint: "Using our region's sewage to produce energy in this way is a great example of renewable energy." ENERGY Icelink deal likely within six months A government-backed deal to bring Icelandic geothermal power to the UK via the world's longest undersea power link is expected to be signed within the next six months. Ministerial talks have begun following a meeting between prime minister David Cameron and his Icelandic counterpart, Sigmundur Gunnlaugsson, in late October in which the two leaders agreed to establish a UK- Iceland energy taskforce to study the power cable plans. The Sunday Times reported on 1 November that the financier behind the scheme, Edi Truell, expected the details of the finan- cial support deal to be in place by next May. The Icelink has a planned capacity of 1.2GW and should be commissioned by 2023. RENEWABLES Offshore windfarm projects move ahead Two major offshore wind pro- jects are to move forward. Dong Energy is to proceed with plans for its giant 660MW Walney Extension project, to be devel- oped 19km off the west coast of the UK. Meanwhile, RWE Innogy has secured financing for its £1.5 billion 336MW Galloper project. The backers include Macquarie, Green Investment Bank and Siemens Financial Services. The four-way international partnership was announced in late October, with each joint equity partner to take on 25 per cent of the project, and an addi- tional £1.37 billion of debt facili- ties secured from a consortium of 12 commercial banks and the European Investment Bank. Scrapped again: Affinity Water's solar plans 14 | 6TH - 12TH NOVEMBER 2015 | UTILITY WEEK Stock watch 930 925 920 915 NATIONAL GRID SHARE PRICE, 3 NOVEMBER 10.00am 12.00pm 950 900 850 800 NATIONAL GRID SHARE PRICE, 3 AUGUST - 3 NOVEMBER Sep 2015 Oct 2015 Nov 2015 On the morning that National Grid announced its new chief executive (company veteran John Pettigrew), shares in the company traded slightly below its previous close of 923.20p per share. Investors are understood to be reassured by the "continuity" of replacing Steve Holliday with current UK executive director Pettigrew, and National Grid's shares remain at a 7 per cent premium over the trading level in early August of 862p.

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