Utility Week

UTILITY Week 28th October 2016

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

Issue link: https://fhpublishing.uberflip.com/i/742644

Contents of this Issue


Page 11 of 31

Finance & Investment This week Prioritise post-Brexit spending, says Baggs Former Thames Water CEO urges water firms to target spending where it will be needed most The water sector must work out its priorities and ensure it is spending money where it is most needed aer Brexit, the former chief executive of Thames Water has insisted. Martin Baggs told Utility Week the industry must "look forward" to ensure it is spending money in the areas that it needs to be, and that it is "delivering best value". Asked whether he saw any risks to environmental policy from leaving the European Union, Baggs said he did not see it as a "big area for debate". "You could draw up a big list of risks around the out- side of the sector," he said. "But when you look at our environmental framework, it has taken years and years to develop and it has done a huge amount of good. "I wouldn't say you need to throw it all out or it all needs to change. It has become part of the way we work. We as a sector have probably got more focus on the environment than we've ever had in the past, why would we want to go backwards?" He said there was "more of a case in terms of looking forward" and prioritising areas for investment. "There have been some huge achievements over recent years, for example a huge amount of investment has been made in cleaning up the beaches and the riv- ers," he added. "Now, there is a forward-looking debate in terms of where our priorities are." Baggs le Thames last month, aer announcing his intention to do so in November last year. He has been succeeded by former telecoms boss Steve Robertson. LV ENERGY Ofgem 'not delighted' with innovation funding Ofgem is "pleased… but not delighted" with the outcomes of network innovation funding, according to a senior figure at the regulator. "We are pleased with how network innovation funding has gone but we're not delighted," said senior partner for consum- ers and competition Rachel Fletcher. "Network innovation funding has made a difference but fundamentally we'd like to have a set of regulatory arrange- ments which didn't rely on that to bring forward innovation." Speaking at the Utility Week Congress in Birmingham, Fletcher said: "Even if you've got a fund, how do you make that fund available to people who might be coming in and chal- lenging the RAB, for example?" She said the most important innovation may come from out- side the sector. ELECTRICITY Nuclear safety tests drive prices up Power prices have risen aer the nuclear regulator ASN ordered EDF to carry out safety tests on five of its reactors in France within the next three months. On the French market the price of baseload contracts for the first quarter of 2017 jumped by 8 per cent, increasing by €4.95/MWh in a single day to close at €68.20/MWh. "Immediately aer the news broke, it actually gained more than €3/MWh in less than 20 minutes," said ICIS power editor Jamie Stewart. "To put that in perspective, if the same product gained €3/MWh in a whole week, we'd call that a strong gain." Britain imports power from France, so this fed through to the UK market. The price of baseload contracts for the first quarter of 2017 actually fell slightly, although it remained €3.00/MWh above the French price. However, the price of contracts for Novem- ber and December increased by about £1.50/MWh to £67/MWh. ENERGY CMA orders trading merger reversal The Competition and Markets Authority (CMA) has ordered a $650 million energy trading merger to be reversed. Intercontinental Exchange (ICE), Europe's largest opera- tor of utilities exchanges and clearing houses, has been told to sell the soware firm Trayport, which it bought in December. In its preliminary findings, the CMA warned that the merger could result in a "substantial lessening of competition". It has now told ICE to move ahead with the sell-off. Baggs: wants a 'forward-looking' debate 12 | 28TH OCTOBER - 3RD NOVEMBER 2016 | UTILITY WEEK Stock watch 14.50 6.90 6.85 6.80 6.75 6.70 6.65 14.25 13.75 14.00 RWE SHARE PRICE, 17 - 21 OCTOBER 17 Oct 18 Oct 19 Oct 20 Oct 21 Oct 17 Oct 18 Oct 19 Oct 20 Oct 21 Oct EON SHARE PRICE, 17 - 21 OCTOBER RWE and Eon have gained greater clarity over their nuclear liabilities in Germany aer the country's government published a dra bill about the financing of waste storage costs on 19 October. German utilities will pay €23.6 billion into a state-run fund to be freed from their liabilities. RWE is expected to pay €6.7 billion and Eon €10 billion. Analysts at Jefferies said it was a positive development for both companies, although there was little impact on share prices.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 28th October 2016