Utility Week

UTILITY Week 16th December 2016

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Finance & Investment This week National Grid sells 61% of gas business Gas still an 'important part' of company portfolio despite deal with consortium of investors National Grid has agreed to sell a 61 per cent stake in its gas dis- tribution business to a consor- tium of investors that includes Macquarie Infrastructure. The deal values National Grid Gas Distribution at about £13.8 billion, including debt. Aer merger clearance from the Euro- pean Commission, National Grid expects to complete the transaction by 31 March 2017. On completion, National Grid will receive a payment of £3.6 billion in cash from the consortium and will own a 39 per cent minority equity interest in a new holding company for National Grid Gas Distribution. National Grid will receive £1.8 billion from extra debt financing. National Grid also intends to return £4 billion of net proceeds to shareholders through the creation of a spe- cial dividend. And, in conjunction with the transaction, the board has agreed a voluntary distribution of £150 million for the benefit of energy consumers. National Grid and the consortium have also expressed an interest in the potential future sale and purchase of a further 14 per cent of equity in the holding company on broadly equivalent financial terms. The other consortium members are Real Assets, Alli- anz Capital Partners, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited/ International Public Partnerships. National Grid chief executive John Pettigrew said gas is still an "important part" of the company's portfolio, despite the sale. LV ELECTRICITY Lightsource reveals solar buyback plan Lightsource Renewable Energy has revealed plans to spend up to £600 million over the next five years buying back solar assets from households and businesses. The company will receive the associated feed-in tariff payments and take over the operation and maintenance of the installations while payments continue. In exchange, sellers will receive a cash lump sum and continue to receive power from the panels free of charge. Lightsource chief executive Nick Boyle said: "Our buyback scheme offers early adopters the chance to realise an immedi- ate substantial return on their investment today." Lightsource has already purchased more than 2.25MW of solar capacity across the UK as part of the scheme. ENERGY Missing meter target costs supplier £4.5m Ofgem has ordered British Gas Business to pay £4.5 million for failing to meet its deadline to supply large business custom- ers through advanced electricity meters by April 2014. The government's scheme to roll out advanced meters to busi- nesses began in 2009, as part of a national project to modernise the energy sector. British Gas Business had five years to install 43,000 advanced meters and supply electricity through them. However, Ofgem said the sup- plier "did not take all reasonable steps to fulfil the rollout" as it was legally required to do. Some customers were le without an advanced meter at the end of the rollout period. British Gas Business will pay £4.5 million to the Carbon Trust, to help businesses across Great Britain save energy though audits, advice and energy effi- ciency measures. ELECTRICITY Prices fall as French output fears recede Wholesale power prices for the first three months of 2017 have plunged as fears about reduced nuclear output in France eased. The French nuclear regulator ASN has agreed in principle to allow EDF to return a number of its reactors to service aer safety inspections. Wholesale prices for the first quarter of the year plum- meted by more than £5/MWh to £48.60/MWh last Tuesday in the wake of the announcement. Price reporting firm ICIS said it was the biggest daily decrease it had ever witnessed for the period. The fall was even greater on the French market, where the price dropped by more than €12/ MWh to €54/MWh. Deal is subject to European Commission approval UTILITY WEEK | 16TH - 22ND DECEMBER 2016 | 17 Stock watch 6.5 6.4 6.3 6.2 6.1 6.0 EON SHARE PRICE, 1 - 8 DECEMBER 1 Dec 2 Dec 5 Dec 6 Dec 7 Dec 8 Dec 1 Dec 2 Dec 5 Dec 6 Dec 7 Dec 8 Dec 11.0 11.2 11.4 11.6 11.8 12.0 12.2 RWE SHARE PRICE, 1 - 8 DECEMBER Eon shares gained nearly 5 per cent last Tuesday aer Germany's constitutional court ruled that nuclear power producers are entitled to claim compensation from the government over its decision to shut down the country's reactors in the wake of the Fukushima disaster. Over the course of the day, Eon shares rose from €6.15 to €6.44. Shares in fellow German utility RWE rose far less, from €11.80 to €11.94.

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