"The policy is likely to face opposition from generators and some govern- ments, so may be watered down, although if adopted it would be negative for fossil fuel generators, particularly dirtier generators," commented Iain Turner, an analyst at Deutsche Bank.
The bank's research suggested Drax
, owner of Europe's biggest coal-fired generator, has most to lose as it produces around 0.9 tonnes of carbon per megawatt hour of electricity.Scottish & Southern Energy was second among the UK companies, requiring about 0.6 tonnes for one megawatt hour.
"Long-term power prices would rise to reflect the additional costs, although we expect a short-term hit to profitability in 2013," Turner
said in an email to clients."Clean generators (including British Energy) should benefit due to higher power prices."
But Deutsche Bank
was not changing price targets or recommendations on the power utilities in response to today's news."The proposal has been leaked successively in recent weeks, so it is arguable that most of the bad news has already been factored into share prices," Turner