Our key feature this month is a review of the UK/EU Electricity sector by Nigel Hawkins who has recently joined Hardman to cover the utilities and renewable energy market. Nigel has had a long career in the City covering both industries having worked at Hoare Govett covering water and electricity privatisation, and at Yamaichi and W de Bröe.
Despite a number of key government initiatives across Europe to encourage new investment by smaller companies, the electricity industry remains dominated by the very large corporates.
Falling demand has caused power prices to fall sharply, especially in Germany.
Most of the larger energy companies have given priority to reducing high debt levels, either selling non-core assets or in some cases reducing dividends.
Electricity generating companies are no longer regarded as defensive assets as investors in RWE and E.On have discovered.
Over the past decade a shift to renewable generation, aided by generous public subsidies, has been a notable feature of the UK/EU energy landscape.