Monday, 22 August 2011

Utility companies write down £600m of coal assets

Major energy companies have written down the value of coal and oil power station assets by £600m, with RWE npower poised to cut around 440 jobs linked to closing plants.

The falling profitability of coal stations in the medium-term is linked to costly restrictions from Europe on carbon dioxide emissions and lower wholesale electricity prices last year.

EDF Energy has booked a £340m write-down on its Cottam and West Burton coal-fired power stations, which last changed hands for £398m and £366m respectively.

The company said they both remain "an integral part of the generating portfolio" but "expectation of future revenues" is lower.

Meanwhile, RWE npower has recorded an "exceptional impairment loss against the value of two coal and two oil fired power stations" amounting to £249m.
It said: "This has been caused by a sharp decline in the margins forecast to be earned on coal and oil generation over the next three to four years reflecting fundamental changes in the UK generation market over this period."

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