Utility Week

Finance & Investment This week EFR contracts 'may not be profitable' Desire to participate in new market may have driven storage suppliers to bid very low, says BEIS The Department for Business, Energy and Industrial Strategy (BEIS) has welcomed the savings for consumers from the recent Enhanced Frequency Response (EFR) service, but said it may not be profitable for the providers. BEIS head of energy stor- age, Rachel Cooper, said at a Navigant storage event that the prices awarded in National Grid's EFR contracts earlier this month were "lower perhaps than we were expecting to see" and added that it remains to be seen "whether they are profitable or not". The EFR service represents one of the first real com- mercial opportunities in the UK for storage products and will deliver 201MW of storage on to the energy system by 2018. National Grid said it would save £200 million by using batteries to provide frequency response rather than alternatives, which Cooper said would benefit all consumers. Cooper added that the prices were the result of companies wanting to be involved in the service at "whatever cost" to get a "foothold for an expansion of that service". She said BEIS would like to see more procurers of these kinds of services come forward as part of the tran- sition from distribution network operators to distribu- tion system operators. She said this would help create more competition and more opportunities for storage providers rather than National Grid be the only commer- cial supporter of storage. LD GaS Chinese mull bid for Grid's networks Two Chinese investors are mull- ing a bid for National Grid's gas distribution networks, the Telegraph has reported. China Gas and the conglomer- ate Fosun are thought to be con- sidering a consortium bid for the business – estimated to be worth £11 billion by some analysts. The pair are understood to be up against two rival consortia: one led by the Canada Pension Plan Investment Board and the other by the infrastructure arm of the Australian bank Mac- quarie. The exact make-up of the groups remains unclear. The former has at various points been reported to include investment firm Hermes; Cana- dian pension fund Borealis; the UK's Universities Superannua- tion Scheme, Wren House; the Abu Dhabi Investment Author- ity; and The Ontario Teachers' Pension Plan. The latter has been said to include German financial services firm Allianz, the Amber Infrastructure Group and the sovereign wealth fund China Investment Corporation. ElEctrIcIty Profit and customers rise at Good Energy Good Energy has reported a sharp increase in profit for the six months to the end of June, along with rising revenues and continued growth in customer numbers. Ebitda jumped by 72 per cent on the same period last year, to £6.2 million. Revenues rose by 40 per cent to £45.6 million, and operating profit was up 60 per cent to £3.6 million. The number of electricity customers increased by 31 per cent year on year to 72,250, and the number of gas custom- ers increased by 54 per cent to 43,000. The number of feed-in tariff accounts grew by 33 per cent, to 124,500. Good Energy chief executive Juliet Davenport said the figures showed people were "increas- ingly moving away from fossil fuels". WatEr Drought could cost economy £1.3bn/day The economy could lose up to £1.3 billion a day during a severe drought in England or Wales, unless action is taken to make the water supply more resilient. New research published by the water industry last week warned that England and Wales face longer, more frequent and more acute droughts than previ- ously thought. An effective response to the significant and growing risk of drought is possible if "concerted action is taken now". Grid level storage is a new market UtIlIty WEEK | 23rD - 29th SEptEmBEr 2016 | 17 Stock watch EDF sharE pricE, past FivE Days 11.40 11.20 11.00 10.80 10.60 14 Sep 15 Sep 16 Sep 19 Sep 20 Sep EDF sharE pricE, past month EDF shares are down slightly since the government gave the final go-ahead to Hinkley Point C last Thursday morning. A•er closing on Wednesday at €11.21, they fell to €10.71 by the end of the week. The decline was reversed somewhat in the early part of this week and at the time of going to press, EDF shares were trading at €10.87. euros 12.00 11.50 11.00 10.50 23 Aug 30 Aug 6 Sep 13 Sep 20 Sep euros

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