nuclear-news

Investors flee Nordic nuclear company Vattenfall

Nuclear Shutdowns Are Leaving Vattenfall’s Bond Investors  Cold , Bloomberg, Jesper Starn , 21 May 15 A jump in power prices hasn’t been able to lift Vattenfall AB bonds as investors worry the Swedish utility will write down more nuclear assets.

While Nordic power prices have risen from record lows after Vattenfall said it would close its two oldest reactors, yield spreads on the utility’s bonds are little changed. The closing plans instead directed attention to the poor Nordic market outlook for investors who had focused on Vattenfall’s woes in Germany, according to Ebba Lindahl, an SEB AB analyst.

“We see an increased risk of smaller cash flows from nuclear generation in the future and further write downs of assets that will not be fully compensated by the increase in power prices,” she said in a phone interview…….

A surge in renewable energy output in Nordic region, coupled with demand still below 2008-levels, has pushed power prices so low that the once-steady cash cow of nuclear production has become a liability.

The company is majority owner of seven reactors in Sweden and also owns thermal coal, lignite and gas units in Germany, which are poorly suited to the European Union’s aim for a transition to low-emission energy systems, according to Ingvar Mattsson, a senior analyst at Swedbank AB.

Vattenfall’s plans to close the two reactors early “reflects a tough market situation with low power prices, and thus a lower valuation of nuclear assets,” he said by phone. “Vattenfall is also obviously exposed to political risks in both Germany and Sweden.” http://www.bloomberg.com/news/articles/2015-05-20/nuclear-shutdowns-are-leaving-vattenfall-s-bond-investors-cold

May 22, 2015 - Posted by Christina Macpherson | business and costs, Sweden