Utility Week

UTILITY Week 10th February 2017

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Finance & Investment This week Coal and gas win the most in early auction Early auction for the capacity market for delivery in 2017/18 clears at £6.95 per kilowatt per year The early auction for the capa city market for delivery in 2017/18 has cleared at £6.95 per kilowatt per year – by far the lowest price in any of the auctions so far. The early auction was domi nated by existing generation, the majority of which was coal and combinedcycle gas turbine (CCGT) plant. Out of the 59.3GW of capacity that entered the auction, 54.4GW – 92 per cent – won contracts. Of that, existing generation accounted for 50.1GW, newbuild generation 2.4GW and interconnectors 1.7GW. CCGTs took the biggest slice of the pie, with 22GW winning contracts and just 1.5GW losing out. SSE said it was reviewing the future of its 1GW Peterhead plant aer it failed to secure an agreement. Coal and biomass plant won 10.4GW of contracts, but lost out on a further 1.5GW. Uskmouth (133MW), one of the four units at SSE's Fiddler's Ferry (423MW) and two of the four units at Uniper's RatcliffeonSoar (1GW) dropped out during the auction. Eggborough's 1.8GW coalfired plant, which was at one point scheduled to close in March last year, once again got a reprieve aer winning a contract for all four units. Batteries and demandside response (DSR) failed to achieve the same level of success seen in the most recent fouryearahead (T4) auction in December. DSR won contracts totalling just 209MW as 583MW dropped out. Just over 10MW of battery storage secured agreements out of the nearly 64MW that entered. TG WatEr Severn Trent expects higher ODI rewards Severn Trent has said it expects net customer outcome delivery incentive (ODI) rewards for full year 2016/17 to be ahead of its previous guidance of £15 million. In a trading update for the three months to 31 December 2016, the water firm said that, although there remain two "unpredictable" winter months ahead, it now expects to meet, if not exceed, the level of incentive rewards achieved the previous year (£23.2 million). Chief executive Liv Garfield said: "We remain committed to delivering our £670 million totex efficiency target in this regula tory period, and achieving the lowest possible cost of finance for our business. We will provide a further update on progress towards these goals at our full year results [on 23 May]." Pan-utility Call for explanation of GIB restructure The chair of the Environmental Audit Committee has written to business and energy minister Nick Hurd to challenge the gov ernment's plans to privatise the Green Investment Bank. Mary Creagh repeated concerns that the formation of 12 new companies – known as "special purpose vehicles" (SPVs) – was designed to facili tate "asset stripping" by the new owner of the bank. "The committee would like to know why this restructuring has taken place and whether there are implications for the bank's green purposes," wrote Creagh. "In particular, the commit tee would like to ask how the creation of these SPVs stands to facilitate the injection of private capital into GIB's offshore wind assets?" ElEctricity Engie gets cold feet over Moorside French firm Engie is planning to pull out of the Moorside new nuclear project in Cumbria, Reuters has reported. Chief executive Isabelle Kocher wants to halt investment in any new nuclear projects, according to sources quoted by the news agency. This would include ending Engie's involvement in the new nuclear project at Moorside, which has been in trouble since Toshiba announced at the end of last month it is reviewing its overseas nuclear operations. Sources with "direct knowledge of the matter" told Reuters that both companies are planning to withdraw from the project. The NuGen consortium developing Moorside is jointly owned by Toshiba (60 per cent) and Engie (40 per cent). Eggborough: won a contract for all four units utility WEEK | 10th - 16th FEbruary 2017 | 15 Stock watch Dong energy share price, five Days 270 265 260 255 250 245 1 February 2 February 3 February Dong Energy shares saw a sharp fall on 3 February as investment bank Goldman Sachs offloaded nearly half of the 56 million stocks it held through Luxembourg registered company New Energy Investments (NEI). Aer closing the previous day's trading at around 256 kroner, Dong's share price dropped to 246 kroner as NEI sold off 26.5 million stocks. At the time of going to press, the share price had rebounded to around 256 kroner. DKK 6 February

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