Utility Week

UTILITY WEEK | 8TH - 14TH DECEMBER 2017 | 17 This week Ofgem names winners of innovation funding Two gas and five electricity projects win a total of up to £57.5 million in annual network competition Ofgem has awarded a total of up to £57.5 million to the seven winners of its annual network innovation competition. The competition is held to trial "innovative practices and new technologies" and the regulator has chosen two gas and five elec- tricity projects to receive funding. According to an Ofgem report on the competition, the winning projects have been selected because "they will help network licensees to understand how to meet cus- tomers' changing requirements as Great Britain moves towards a low-carbon economy". "Network companies have a fundamental role in supporting the delivery of a low-carbon economy while contributing to maintaining safe, secure and reliable energy supplies at long-term value for money to consum- ers," the report states. "Innovation is crucial to meeting these outcomes by changing what is considered 'busi- ness as usual' and enabling a more rapid pace of change in the sector." The seven winning projects include one by Northern Gas Networks to examine whether gas networks can safely transport 100 per cent hydrogen gas. SGN has won funding for a project that will use advanced robotics to cut costs and lower the environmental impact of carry- ing out street works. UK Power Networks has won fund- ing to look at using automation technology to squeeze more capacity out of local electricity networks. The other winners are Western Power Distribution, SP Energy Networks (two) and Scottish and Southern Electricity Networks. JH WATER Ofwat urged to set 'record low' Wacc The Consumer Council for Water (CCWater) called on Ofwat this week to "stick to its promise" to set the lowest-ever cost of capital for the water industry for the 2019 price review, PR19. An independent study by Economic Consulting Associates, on behalf of CCWater, recom- mended Ofwat set a weighted average cost of capital (Wacc) of between 1.8 and 2.5 per cent. The Wacc is the assumption Ofwat makes on the cost water firms will incur in raising capital to fund investment in assets such as pipelines and treatment works. CCWater described it as "one of the biggest building blocks" in the regulator's price settlement for the period 2020-25. CCWater said returns to inves- tors and interest and debt repay- ments can have a "significant impact" on customers' bills and that a 0.1 per cent increase in the cost of capital could add about £2 a year to the average bill. The regulator is expected to announce its decision on the cost of capital on 13 December. WATER Clean water back in control of NI Water Northern Ireland Water (NI Water) has paid £28 million to acquire four treatment works from Kelda Water Services (KWS), which produce nearly 50 per cent of the treated water in Northern Ireland. Government-owned NI Water described the purchase as a "strategic move" as it will bring all clean water production in the country back under its control. The move followed the deci- sion by Kelda Group to put up the non-regulated businesses of KWS for sale. This included the Project Alpha public-private partnership contract operated by KWS. In addition to paying £28 million to acquire all the equity in the project from KWS, NI Water will take on responsibility for the associated debt finance, reported to be about £80 million. WATER Yorkshire plans to be 'top performer' Yorkshire Water last week unveiled an "ambitious" multi- million pound plan to transform its operational performance as it looks to become a "top performer" in the water industry. The plan is expected to see "dramatic reductions in leakage, significantly fewer pollution incidents and will slash the time customers lose supply during planned or unplanned interrup- tions" in the next two years. These improvements are to be delivered before the start of the next five-year investment period in 2020. Blue-sky thinking: innovation awarded funding Stock watch 30 25 20 15 10 UNIPER SHARE PRICE, FIVE DAY Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 UNIPER SHARE PRICE, FULL HISTORY Uniper shares reached a record high on Tuesday aernoon following reports that US hedge fund Elliott Management had bought a stake in the company. At the time of publication, the stocks were trading at more than €25.50. The price has increased by around two and half times since the company was formed from the fossil fuel assets of Eon and floated on the Frankfurt stock exchange in September 2016. 26.0 25.5 25.0 24.5 24.0 30 Nov 1 Dec 4 Dec 5 Dec Finance & Investment

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