Utility Week

UTILITY WEEK | 8TH - 14TH JUNE 2018 | 11 This week Clark signals shift on nuclear investment Proposal to invest in Horizon's Wylfa Newydd plant branded 'ideological shift' by Labour Greg Clark has signalled a shi in the government's long-stand- ing block on direct investment in nuclear energy as he announced the next phase of talks on Hori- zon's Wylfa Newydd plant. Horizon is owned by Japanese multinational Hitachi. Aer a flurry of press speculation in the wake of a Hitachi board meeting in Japan, the business secretary announced in the House of Commons that formal negotiations would begin on the 2.9GW twin reactor station on the island of Anglesey. Hitachi has submitted a planning application. Clark also told MPs the government is considering a recommendation in a National Audit Office report, published last year, that it should invest in the project. Hitachi, the Japanese government agencies and other parties would also take stakes. By helping to underwrite the project, the NAO said the government could reduce the overall project risk with a knock-on impact on the returns investors need to make to justify their involvement. Clark said the government will be reviewing the viability of this so called "regulated asset base model" for other projects in the nuclear pipeline. Shadow business secretary Rebecca Long-Bailey said the government's move on nuclear finance was a "shi from the government's ideological position against gov- ernment investment in new energy infrastructure". Former Liberal Democrat energy and climate change secretary Ed Davey said the money would be better spent on the Swansea Bay tidal lagoon. DB ELECTRICITY Sembcorp buys UKPR for £216m Sembcorp Industries is buying UK Power Reserve (UKPR) from private equity firms Inflexion and Equistone for £216 million. UKPR is a flexible generation company with more than 1GW of distributed generation in opera- tion or in development across 32 sites in England and Wales. The portfolio largely consists of gas-fuelled reciprocating engines, 120MW of battery stor- age and diesel engines. Sembcorp provides energy, water and a range of other ser- vices at the Wilton International industrial park in Teesside, where it has 210MW of combined heat and power generation, a biomass plant and an energy- from-waste plant. WATER Pennon signs £80m green finance deals Pennon Group and its subsidiary South West Water have signed £80 million-worth of green finance deals as part of Pennon's "commitment to sustainable finance". The deals are with Societe Generale Corporate & Invest- ment Banking and Natwest. Pennon said the bilateral impact loan revolving credit facilities (RCF) are "among the first of their kind" in the UK and will support the company's envi- ronmental and social govern- ance priorities for the future. The agreement with Societe Generale in London represents £30 million for Pennon Group and £20 million for South West Water. In addition, South West Water has also signed a £30 mil- lion green RCF with Natwest. The company said: "This is the first credit facility of its kind with a margin directly depend- ant on the company's sustain- ability rating." ENERGY SSE to raise energy prices by 6.7% SSE is to raise gas and electricity prices for dual fuel customers on its standard variable tariff by an average of 6.7 per cent, starting 11 July. The supplier blamed the price hike, which equates to an extra £76 on the typical annual bill, on growing wholesale and policy costs. It will also remove its paperless billing discount of £6 per fuel per year. Gas prices will rise by an aver- age of 5.7 per cent and electricity by 7.7 per cent. The figures refer to customers paying by direct debit and are based on Ofgem's typical household consumption profile of 12,000kWh of gas and 3,100kWh of electricity. The increase will affect 2.36 million customers who are sup- plied by SSE and M&S Energy. Clark: government is considering NAO report Stock watch 790 780 770 760 750 740 UNITED UTILITIES SHARE PRICE, FIVE DAY PENNON SHARE PRICE, FIVE DAY There was a market-wide rally on Monday morning aer concerns over political instability in Europe eased over the weekend. Among the top risers were the three publicly listed water companies. Pennon Group's shares rose 3.9 per cent to 784p in the opening hour of trading, while United Utilities shares were up 3.7 per cent at 807p. Shares in Severn Trent increased by 3.6 per cent to 2056p. 810 800 790 780 770 30 May 31 May 1 Jun 4Jun 5 Jun Finance & Investment 1 Jun 4Jun 5 Jun 30 May 31 May

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