Tag: Eon

Kiran Stacey

Fukushima Daiichi before the tsunamiThere has been a great deal of commentary in the last few weeks that the nuclear crisis at the Fukushima plant is not as bad as the Chernobyl meltdown.

We can only hope that prediction proves correct. But for the nuclear industry, say the analysts at UBS, the consequences are already even worse.

In a mammoth 140-page report looking at the future of the global nuclear industry, they say:

While the 1986 Chernobyl accident, at least to date, had a significantly greater environmental impact, we would argue that Fukushima raises even larger credibility issues for the nuclear industry than previous accidents.

Kiran Stacey

This morning’s clampdown by the UK regulator on the country’s big six utilities was unexpectedly hard-hitting.

Apart from the news that the companies may be forced to auction up to 20 per cent of their electricity generation output, there was the harsh tone struck by the regulator’s chief executive, Alistair Buchanan. He said:

Energy companies have failed to play it straight with consumers and so Ofgem is proposing to break the stranglehold the Big Six have over the electricity market.

A nasty stasis in shares in E.ON, RWE and EDF at pixel time:

Kiran Stacey

You would think that a cut to future subsidies  for solar power in Spain would have minimal impact on northern European wind developers. But renewables execs at a planning meeting for the Power and Renewables Summit 2011 looked almost traumatised by the events of last year.

When asked about the biggest hurdle for investment in capex-intensive projects such as offshore wind farms, all agreed that it was uncertainty in government subsidy regimes. “Look what happened in Spain,” they murmured.

However, what happened in Spain purely affected future contracts. What renewables execs really worry about is retrospective cuts: ones which will damage profits on projects that are already up and running.  Was even the mere suggestion that cuts could be applied retrospectively in Spain enough for investors to fret? That’s what these bosses claimed.

Kiran Stacey

And then there was one. After Eon announced on Tuesday that it would increase electricity prices by 9 per cent and gas prices by 3 per cent, that leaves only EDF of the big six who have frozen charges over the winter.

The row that has followed runs along the same lines as that which came after British Gas made a similar announcement last year. The company says wholesale energy prices have risen, but won’t go into detail about their purchasing agreements.

Consumer groups and some analysts argue that companies can and should be more flexible with their supplier agreements to take advantage of low prices when they can. They also say that companies are more reluctant to lower prices when wholesale prices fall than they are to raise them when they rise.

It seems consumers’ best chance of being certain they are getting a fair deal is to hope for decisive action from Ofgem when the regulator announces the results of its probe into energy prices.

Kiran Stacey

Hatfield colliery, owned by PowerfuelPowerfuel’s move into administration is grim news for supporters of carbon capture and storage, not least those companies thinking of investing in the sector.

Powerfuel was developing one of the UK’s first commercial scale clean coal power plants, but ended up unable to foot the hefty bill.

One of the administrators, Richard Fleming of KPMG, said:

Developing low carbon energy generation requires a large amount of capital upfront and the CCS development falls £635m short of the investment needed to progress the project beyond the preliminary stage. It needs moving on to a new owner with deeper pockets.

Kiran Stacey

Earlier this month, Eon announced its plans to raise €15bn over three years to pay off debt and fund an expansionary drive outside Europe.

At the time, Johannes Teyssen, the chief executive (pictured), wrote to shareholders:

Our objective is to sharpen Eon’s profile as an international energy specialist and to increase our earnings strength by placing it on a broader, more international foundation.

Just three weeks into that three-year period, the company has already made its first move, selling its 3.5 per cent stake in Gazprom for €3.4bn. Teyssen said today:

Kiran Stacey

Sara Vaughan, image by Eon

In the first of a new series of readers’ Q&A sessions, Sara Vaughan, Eon UK’s head of energy policy and regulation, tackles the burning questions you wanted answering. Eon is Germany’s biggest power company and is heavily involved in the UK market.

In the second part of the session, Sara discusses the obstacles to building new nuclear plants, how the UK measures up on low-carbon technology and the limitations of a carbon floor price.

Next in the hotseat is Ditlev Engel, chief executive of Vestas, the world’s biggest manufacturer of wind turbines. Send in your questions by the end of Friday, November 26th for consideration, to energysource@ft.com.

But for now, over to Sara:

Kiran Stacey

Sara Vaughan, image by Eon

Sara Vaughan, image by Eon

In the first of a new series of readers’ Q&A sessions, Sara Vaughan, Eon UK’s head of energy policy and regulation, tackles the burning questions you wanted answering. Eon is Germany’s largest energy company and is heavily involved in the UK market.

In the first of two parts, Sara talks about why the changes to the carbon reduction commitment could be a good thing, how to reform the energy market and the future of carbon capture and storage.

In the second part, to be published later this morning, she will discuss the obstacles to building new nuclear plants, how the UK measures up on low-carbon technology and the limitations of a carbon floor price.

Next in the hotseat is Ditlev Engel, chief executive of Vestas, the world’s biggest manufacturer of wind turbines. Send in your questions by the end of Friday, November 26th for consideration, to energysource@ft.com.

But for now, over to Sara:

Kiran Stacey

This morning, Ofgem announced it would probe pricing by the big six UK energy companies, amid concerns that profit margins are soaring, with the customer losing out.

Today, the head of UK energy policy at one of those big six, Eon, has urged the company’s rivals to change their business models entirely. Answering Energy Source readers’ questions (posed before the Ofgem investigation was announced), Sara Vaughan said:

Energy companies are going to have to change. Traditionally, energy was all about building big central power stations and working out how best to get that power into people’s homes through a one-way transmission and distribution system.

While those centralised power stations are still going to be part of the future, it’s also clear that things are going to change substantially, with more emphasis placed on relationships with customers, who can take responsibility for their own energy usage for the first time.

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