Utility Week

Utility Week 30th September 2016

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/732537

Contents of this Issue


Page 14 of 31

Finance & Investment This week China Resources Gas bids for National Grid First-round bids for a 51 per cent stake in Grid's gas distribution arm were due by 23 September State-owned Chinese conglom- erate China Resources Gas has placed a bid for National Grid's gas distribution arm, the Financial Times has reported. It has partnered with a consortium that includes an Australian fund manager and Singapore's electricity distribu- tor to enter the auction for the business, which is expected to be valued at £11 billion. First-round bids for a 51 per cent stake were due by 23 September, with the sale process expected to last several weeks. However, workers' union GMB has called for a halt to "yet another example… of fundamental UK infra- structure being flogged off to the highest foreign bidder" until the government has completed its promised review of the Enterprise Act. GMB said the business "is not a cash cow but a key piece of infrastructure, vital to our economy", which should be subject to the same checks the Hinkley Point C project underwent before the government gave final approval. The government intends to review the 2002 Enter- prise Act to see whether infrastructure should be added to the sectors in which ministers can intervene. GMB national secretary for energy, Justin Bowden, said: "Theresa May should intervene and put this sale on hold until the review of the Enterprise Act is com- pleted and there are proper safeguards in place. "If it was good enough in her opinion to delay the go- ahead to Hinkley Point, then it is certainly good enough to put the brakes on here." LD GAS WWU predicts major change to price control outputs Wales and West Utilities (WWU) has warned outputs in the next price control for gas distribution network operators are likely to be based on consequence rather than asset health, which will be a "challenge for the industry to get its head around". WWU's asset strategy and per- formance manager Ian Dunstan said at Network's asset perfor- mance conference that measures such as monetising risk are likely to be big drivers of allowances in the next price control. The approach could see an increased link between cost and output, which Dunstan said would make outputs "very, very challenging", and could potentially simplify the structure down to a single output. He added there is a drive towards being comparable across sectors such as with electricity, but said: "That's very visionary – I don't see that hap- pening for many, many years." ELECTRICITY Domestic DSR gains will be 'limited' The potential gains from domes- tic demand-side response (DSR) are "limited", an energy expert told delegates at the Labour Party conference in Liverpool. Domestic consumers are una- ble to shi their demand in the same way as industrial energy users and the savings on offer are therefore relatively small. "Their ability to actually shi their demand and so on I think is not that great, because most of the times in a household when you need energy, you need energy," said Policy Exchange head of energy and environment Richard Howard. "£50 is not a level of saving a lot of households would find attractive for that amount of effort," he added, saying the "big opportunities" could instead be found in managing the demand of large industrial energy users. ENERGY Independents' share predicted to grow Independent suppliers will account for more than a quarter of the UK energy market by 2019, analysts at investment bank Jefferies have predicted. They will grow their market share to 28 per cent – from 17 per cent – as the big six contend with "falling commodity prices, evolving regulation and height- ened consumer awareness". The analysts expect gas prices to fall by about 15 per cent over the period due to weak demand, plentiful supplies of liquefied natural gas and rising competition between LNG exporters and "tra- ditional pipeline gas suppliers". First-round bids are in the pipeline UTILITY WEEK | 30TH SEPTEMBER - 6TH OCTOBER 2016 | 15 Stock watch UNITED UTILITIES SHARE PRICE, PAST FIVE DAYS 1,010 1,005 1,000 995 990 985 22 Sep 23 Sep 26 Sep 27 Sep United Utilities shares rose in the early hours of trading on Tuesday aer the group said it expected to see a small year-on-year rise in its underlying operating profits for the first half of its 2016/17 financial year. Aer starting the day at 989 pence per share, the shares were trading at 998p at the time of going to press – just over a 1 per cent rise. The group said it expected its revenues to be down slightly on the same half last year due to the formation of Water Plus. pence UNITED UTILITIES SHARE PRICE, PAST MONTH 1,010 1,000 990 980 970 960 6 Sep 13 Sep 20 Sep 27 Sep pence

Articles in this issue

Archives of this issue

view archives of Utility Week - Utility Week 30th September 2016