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UTILITY WEEK | 6TH - 12TH OCTOBER 2017 | 13 Finance & Investment This week Drax calls for clarity on ancillary services Uncertainty about revenues puts large gas plants at a disadvantage in the capacity market Drax has called for greater clarity on the future of ancillary services to ensure the smooth operation of the power grid as more intermittent renewables come online. The company said large gas plants would have a vital role to play in maintaining system stability but had been starved of investment because of a lack of visibility over potential revenues. Drax Power chief executive Andy Koss told Utility Week that although there was an economic case for building the new gas plants (in particular combined cycle gas turbines), part of this rested on their ability to provide a wide range of ancillary services, includ- ing frequency response, voltage control and black start capabilities. But "there's no transparency about what they are and how much you're going to make". As a result, Koss said the capacity market favoured projects that had low capital expenditure – regardless of their whole-system benefits – especially in the south where transmission charges are lower. With more certainty over ancillary revenues, larger gas plants would be able to bid into the capacity market at a lower price and outbid the distributed peaking plants which have been big winners in recent auctions. National Grid expects ancillary services to rise signifi- cantly over the coming decades, but Koss said investors were unwilling to part with their cash on this basis given the price volatility in the wholesale market. TG See analysis, p22 ENERGY SSE warns network profits set to fall SSE has predicted a drop in prof- its from its network operations due to the timing of investments and the partial sale of its stake in SGN. However, the big six utility said the weaker performance of its networks division is expected to be offset by stronger earnings from its wholesale and retail arms. In a trading update ahead of its first-half year results in November, SSE warned investors that adjusted operating profit from SSEN for the six months to end of September is set to fall compared with the same period last year. Analysts at investment firm Jefferies said that even with the warning over the networks division, the update was more confident than expected fol- lowing a "bearish" first quarter update in July. ELECTRICITY Public cash could 'unlock' Moorside Government money could help "unlock progress" with the trou- bled Moorside nuclear power station, according to Tim Yeo. Speaking to Utility Week, the chairman of New Nuclear Watch Europe and former chairman of the energy and climate change select committee said there was a question about whether the British government "is willing to put any of its own money" into Moorside, either by way of a loan or an equity stake in the power station. Yeo said he believed this would "undoubtedly unlock progress" with the project. ELECTRICITY Greencoat UK Wind share issue Greencoat UK Wind is to issue up to 500 million new shares in tranches to repay debt and raise capital for investment. In a market notice, the renewable infrastructure fund said the initial share issuance would be at 117p per share. The prospectus for the issuance pro- gramme will be released in early October with the final size of the issue announced on 20 October, Greencoat said. Greencoat, which listed in 2013 and is managed by Green- coat Capital, has grown a port- folio of 18 operating windfarms in Britain with combined net generating capacity of 400MW. "The programme of capital raises will enable the company to pay down debt and con- tinue to take advantage of the significant pool of assets cur- rently available in the UK wind farm secondary market," said Greencoat UK Wind chairman Tim Ingram. Drax: looking to invest in CCGT Stock watch 370 360 350 340 330 320 DONG SHARE PRICE, ONE MONTH (€) 5 Sep 12 Sep 19 Sep 26 Sep 3 Oct 400 350 300 250 200 DONG SHARE PRICE, 2016-PRESENT (€) Jul 16 Oct 16 Jan 17 Apr 17 Oct 17 Dong Energy announced this week that it is changing its name to Ørsted to reflect its shi away from fossil fuels aer the company received approval for the agreed sale of its oil and gas business to Ineos for $1 billion. The green light from regulators had little effect on the firm's share price, which has risen steadily from 252 kr (£30) to 363kr (£43.30) since the company was floated on the Copenhagen stock exchange in June 2016. Jul 17