Utility Week

UTILITY WEEK | 26TH JANUARY - 1ST FEBRUARY 2018 | 9 Finance & Investment EDF looks to pension funds for Sizewell CEO cites National Audit Office backing for turning to alternative construction finance models P ension funds and other institutional investors could be brought in to help fund the Sizewell C nuclear plant in Suffolk, according to the new boss of EDF Energy. Speaking at an event near the Hinkley Point C construction site, chief executive Simone Rossi said innovative financing models could reduce Sizewell's construction cost. Rossi said such financing could bring down the capital cost of the project: "At Hinkley Point C the shareholders bear all the risk of building the power station. The National Audit Office says that other models of financing should be considered for the future. It believes this could significantly reduce the overall cost of the project to consumers. "With government, we should explore alternative financing models that can create the conditions where institutional investors like pension funds can participate when they were not able to before." The £20 billion Hinkley Point C project has put a strain on the company's finances. Last March, EDF sold €4 billion of new shares to help fund its construction; most were bought by the majority shareholder, the French state. Speaking separately at the event to Utility Week, Rossi said Sizewell will pose "significantly lower risk" to investors than Hinkley due to its proven design. He said that replicating the Hinkley Point C design for Sizewell C, which is "largely identical" to Hinkley Point C, "makes a capital cost reduction of 20 per cent possible". TG ENERGY Water from disused mine to heat homes A £6.5 million EU grant has been awarded to pump naturally heated water from an old coal mine in Caerau, Wales, to heat 150 local homes. The Welsh government said the £9.4 million project will "catapult" the area to the "cutting edge" of the UK's "green energy revolution". The scheme, which is a demonstrator project for the government-led Smart System and Heat Programme, is said to be the "first of its kind in the UK" on such a scale and would use existing radiators to heat homes. No mine-water would enter local properties. The results of a feasibility study to determine if the water is warm enough to heat homes is expected by the end of February. ENERGY Robin Hood Energy reports £7.6m loss Robin Hood Energy has posted a £7.6 million loss for the financial year to the end of March 2017. The council-owned supplier racked up net debts of £10.8 million by the end of the period. A company spokesman told Utility Week that losses are the norm for new entrants to the retail market and that the company expects to break even over its current financial year. "Robin Hood Energy is on track to become one of only a few energy suppliers that have reached a break-even position within three years of trading," he said in a statement, adding that the company had acquired 100,000 customers since launch and disrupted the previously monopolised energy market. Robin Hood Energy was launched by Nottingham Council in September 2015. The spokesman denied the reported loss risked leaving local taxpayers out of pocket as the company has "an asset value in its customer base that largely covers liabilities". ENERGY Eon sells Uniper stake to Fortum Eon has accepted an offer from Finnish state-owned utility Fortum to buy its 46.65 per cent stake in Uniper for €3.76 billion (£3.34 billion) – or €22 per share. The deal was opposed by the Uniper board. Eon CEO Johannes Teyssen said: "This transaction enables us to sell our entire Uniper stake at an attractive price for Eon. Eon will now focus fully on its customers and core businesses in the new energy world." Uniper was formed in 2016 to separate Eon's conventional generation and energy trading operations from the rest of the business. Replicating Hinkley design will lower Sizewell risk Stock watch 1200 1100 1000 900 800 NATIONAL GRID SHARE PRICE, FIVE DAY Mar 17 May Jul Nov Sep Jan 18 NATIONAL GRID SHARE PRICE, FULL YEAR National Grid shares dropped by around 2 per cent in the early hours of Tuesday morning to 810p aer Ofgem announced its intention to use a new funding mechanism for the connection of Hinkley Point C to the power grid. Under the "competition proxy" model, National Grid will be allowed a lower cost of capital than if the £800 million project were funded as part of the RIIO T-1. At the time of publication, the shares had bounced back to 820p. 860 850 840 830 820 810 18 Jan 19 Jan 22 Jan 23 Jan 24 Jan This week

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