Balfour Beatty Plc (BBY), the U.K.’s largest construction group, reached its highest in three months after being appointed preferred bidder for power links at an RWE AG (RWE) wind farm off the U.K. coast.
The London-based company rose as much as 3.2 percent to 250.10 pence, its highest intraday price since April 24. It traded 2.4 percent higher at 250 pence at 11:40 a.m. in London, giving the company a market value of 1.7 billion pounds ($2.6 billion).
Balfour and investor Equitix Ltd. will own and operate the transmission assets for the 576-megawatt Gwynt y Mor wind farm being built by RWE Npower Renewables Ltd. off the North Wales coast, energy regulator Ofgem said today in a statement. They were selected after a tender process by the U.K. Department of Energy and Climate Change and Ofgem.
“This is positive news as it seems that the pipeline is improving, and they are diversifying from social and transportation public-private partnerships further into utilities infrastructure,” Olivia Peters, an analyst at RBC Capital Markets, said in a telephone interview.
The U.K. has more installed offshore wind power than the rest of the world put together, with 3,321 megawatts of capacity, according to trade association RenewableUK.
The energy regulator Ofgem estimates about 15 billion pounds of investments are needed in the transmission networks to connect all currently planned offshore wind power projects to the mainland.
The government on July 17 outlined an investment plan into low-carbon infrastructure that envisaged 18 gigawatts of offshore capacity by 2030.
Balfour received more orders in the U.S. and predicted rising profitability at its U.K. unit earlier this month. The company, which has more than 50,000 employees and generates half of its revenue in Britain, issued a profit warning in April amid sluggish U.K. demand.
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