Tough decisions will have to be made with purpose and clarity by the National Infrastructure Commission (NIC) to deliver major energy and water projects says the Confederation of British Industry (CBI). The newly created NIC has been given the foundations by which it can deliver relevant infrastructure improvements thanks to
The Energy Intensive Users Group (EIUG) has called for the Carbon Price Floor to be scrapped or frozen beyond 2020 on the basis that it puts the UK at a disadvantage compared to the rest of Europe. The EIUG argues that rather than reducing carbon emissions overall, the carbon tax
Serving as the first natural stage in its NIC CNG Connection project, Northern Gas Networks is now experimenting with liquid natural gas powered vans to judge the potential benefits available. Set to build its very own compressed gas fuel stations for its back-to-depot city-based vehicles, Northern Gas Networks is taking
Increasingly, with the advancements made in consumer (and corporate) technology, apps are being launched to assist customers in both monitoring, and managing their relative services. This is most noticeably the case in areas concerning energy and utilities and, most specifically, Western Power Distribution has taken the decision to launch a
Serving as the platform for the delivery of important services throughout the UK and Ireland, Sara Venning, Chief Executive of NI Water has rightly urged the wider sector to stress the importance of funding for infrastructure and developments across Northern Ireland; this, in effect allowing Northern Ireland Water to, firstly,
Law firm, Bircham Dyson Bell has reported that the UK faces what it describes as a “looming energy crunch” owing to the predicted loss of 25GW of generating capacity by 2030. The report highlighted the closure of 18 major power stations since 2012, representing a reduction of the UK’s total
Most recently, it has been announced that SSE will provide £12m of support to its most vulnerable customers, helping them with their energy bills and thus supporting customers most in need, not only of maintaining SSE’s services, but also of being able to manage their own finances at the same
A brand new division launched by BAM FM, dubbed BAM Energy Limited has recently been launched with the intention of assisting clients in cutting back on their power consumption through the design and installation of sustainable power systems (comparable to biomass heating methods, CHP systems, photovoltaics and heat pumps) on
Energy companies are divided over the need for a mid-period review (MPR) within the present eight-year price control for businesses operating both in electrical energy and gasoline transmission, and fuel distribution. Big six provider British Gas and consumer body Citizens Advice are heading up the decision for an MPR for
Scottish Water has appointed two joint ventures to a £120m six-year technical consultancy framework. One venture between Atkins and RPS JV and one other between Mott MacDonald and MWH have been chosen to supply project management, design and development work in addition to feasibility studies to assist Scottish Water’s building
Tough decisions will have to be made with purpose and clarity by the National Infrastructure Commission (NIC) to deliver major energy and water projects says the Confederation of British Industry (CBI). The newly created NIC has been given the foundations by which it can deliver relevant infrastructure improvements thanks to the CBI revealing eight areas it says should be prioritised. This includes water and flood defences, low-carbon energy, and energy generation and supply. Rhian Kelly, the CBI’s business environment director says the NIC must be an enabler, helping to deliver projects across the UK that promote industry growth, create jobs and get the economy flowing. To accomplish this, the NIC should not be hindered by politics or red tape and must be given the weight to push through infrastructure decisions that can make significant gains. Areas worth targeting, concludes the report, involves such initiatives as the extraction and storage of energy from a wider range of sources and improving the opportunities that will come from a “circular economy”. That means developing existing technologies and embracing new ones such as carbon capture and storage, tidal power and hydrogen. Supply of water needs to be flexible, making use of variable volumes thanks to climate change and weather patterns impacting differently across the UK. This must be factored into housing and infrastructure planning over the long term. In terms of promoting a low-carbon economy, the CBI suggests the commission should look at boosting energy infrastructure and generation to promote electrification within heating and transport. This level of focus must also be on flood defences with up to 2.1m people projected to be at risk within 35 years. Flood defences must be more resilience while upstream water capture should be considered. Through these initiatives the NIC can potentially prove to be a major success. Time will tell.
The Energy Intensive Users Group (EIUG) has called for the Carbon Price Floor to be scrapped or frozen beyond 2020 on the basis that it puts the UK at a disadvantage compared to the rest of Europe. The EIUG argues that rather than reducing carbon emissions overall, the carbon tax encourages production to be relocated away from the UK so that the emissions occur elsewhere, known as carbon leakage. Director of the Energy Intensive Users Group, Jeremy Nicholson, said “This measure doesn’t reduce emissions. It just means that more of the emissions reductions occur in the UK and less elsewhere in Europe.” The Carbon Price Floor, introduced in 2013, was designed to provide a top-up to the price of EU Allowances (EUAs), which trade under the EU Emissions Trading System (EU ETS). The EU ETS is a cap and trade scheme that places a cap on emissions emitted from factories and power plants across the EU, which reduces over time. EUAs, which equate to one tonne of CO2, are issued to the level of the annual cap, and while some are issued freely to participants, others are auctioned. Participants must submit allowances equal to their emissions levels each year, and if more allowances are required, these can be purchased from participants with surplus allowances, or at auction. A higher carbon price makes low carbon technologies more viable as there is a value to the emissions saved. However, the design of the EU ETS has resulted in an excess of EUAs in the market, particularly during periods of reduced economic output. As a result, the price of EUAs has fallen, as can be seen in the chart below. A mechanism known as the Market Stability Reserve (MSR) will be introduced from 2019 as a measure to prevent the oversupply of allowances. This will be structured to automatically withdraw emission allowances from the market when oversupply exceeds a pre-defined limit and to release allowances when the surplus falls below a set amount. In the UK, the Carbon Price Floor was introduced in 2013 to act as a top up to EUA prices and so encourage carbon abatement while the price of EUAs was too low to do so. It is structured as follows: Carbon Price Floor = EUAs + Carbon Price Support (UK only additional tax for fossil fuels used in electricity generation) Carbon Price Support (CPS) rates are applied to fossil fuels used in electricity generation as a tax, which feeds through to consumers via the wholesale price of electricity. The CPS rates are scaled according to the carbon intensity of the fossil fuel used to generate. The intention was for the Carbon Price Floor to rise to £30 by 2020. However, it was not anticipated that EUA prices would fall as low as they have. As can be seen in the chart, prices have fallen from €16/tCO2 in mid-2011, when the scheme was announced, to just below €6.00/tCO2 this year. In 2014, it became apparent that if the floor price were to continue on its planned trajectory, that the UK would be faced with far greater carbon costs than the rest of Europe. Therefore, the rates were reformed in the 2014 budget and a cap was set at £18/tCO2 for 2016/17 to 2019/20, effectively freezing 2015/16 levels. CPS was not mentioned in the recent business energy efficiency tax review, and calls have been made for a decision to be made on its future in the upcoming 2016 budget, although low carbon generators and environmental groups support the tax. A Treasury spokesman has said that no decision has yet been made and that an announcement on rates beyond 2019/20 will be made in due course. By Nikki Wilson for Alfa Energy & BDC Magazine
Serving as the first natural stage in its NIC CNG Connection project, Northern Gas Networks is now experimenting with liquid natural gas powered vans to judge the potential benefits available. Set to build its very own compressed gas fuel stations for its back-to-depot city-based vehicles, Northern Gas Networks is taking the first logical step in the company’s overarching plans to cut its carbon emissions across the board. Testing the initiative through the vehicles, Northern Gas Networks will be monitoring the performance and benefits of the vans, engaging them in a number of different scenarios so as best to judge their potential. The project itself, valued at approximately £1.1m, is being undertaken as a partnership between Northern Gas Networks and Leeds City Council, with Ofgem funding a large proportion (approximately £700,000) of the project, and Northern Gas Networks personally covering the addition costs; effectively, putting its money where its mouth is. Whilst the organisation is already well respected for pushing efficiencies and operating responsibly, Northern Gas Networks has stated that it wishes to play an integral role in experimenting with new and innovative schemes which may form a part of a far more sustainable economy. It is hoped that similar initiatives may be pursued in utilising more sustainable gases for a wide variety of energy applications where testing the gases for use in vehicles is merely the first step – the end goal may even each the goal of powering homes, cities and more. Only time will tell, of course.
Increasingly, with the advancements made in consumer (and corporate) technology, apps are being launched to assist customers in both monitoring, and managing their relative services. This is most noticeably the case in areas concerning energy and utilities and, most specifically, Western Power Distribution has taken the decision to launch a brand new app for its customers, allowing them to report power cuts directly on their devices as well as enabling them to receive the latest information on faults and issues. As of this moment, Western Power Distribution is now the only DNO with an app of this type, allowing customers increased communication with the company, and visa versa. As a company dedicated to providing the highest standard of service possible, the app is a clear move in the right direction for improving the customer experience and the level of information and support at their fingertips. Although the app won’t quite revolutionise the service Western Power Distribution offers, it does support a responsible approach to the delivery of its service by allowing the customer to keep in the know, on the move. As the app also provides the company’s customers with a live stream of communication directly to Western Power Distribution’s helpdesk, which is open 24 hours a day, 7 days a week, this will also allow for the easy pinpointing of fault locations and communication of advice direct to the customer. Additionally, past and present reports area also archive-able for reference at a later date. And finally, the app also allows for owners of multiple properties to monitor multiple locations simultaneously through the storage of multiple postcodes. Then commenting on the launch of the app, the Corporate Communication Manager for Western Power Distribution said: “We hope [customers] will find our new mobile app a useful addition to the range of resources that are currently available.”
Serving as the platform for the delivery of important services throughout the UK and Ireland, Sara Venning, Chief Executive of NI Water has rightly urged the wider sector to stress the importance of funding for infrastructure and developments across Northern Ireland; this, in effect allowing Northern Ireland Water to, firstly, sustain the level of service it is presently delivering and, secondly, improve that service for the betterment of residents in Northern Ireland. “You can’t have the nice things if you don’t have the infrastructure, and we need to fund the infrastructure,” explains Sara Venning. Highlighting the importance of funding for the future development of the organisation, Sara Venning highlighted the difficulties NI Water has been facing in signing up to a medium-term plan which is, in effect, an essential requirement for a regulated utility. As she explains, NI Water has been able to agree on, “The first year of our programme of work as a one-year programme of work,” and the company will look to develop a plan for the following year also. Sara Venning, however, highlights the fact that this still represents an, “Inherently inefficient way of running a capital intensive business such as ours.” And though NI water does actually intend to push a strategy which will help to deliver lower bills, improve efficiencies and drive customers service improvements through the PC 15 period, the organisation’s ability to pursue such a strategy will depend upon proper funding. Insisting that NI water is “up for the challenge”, it is evident that the organisation is ready and raring to go, yet, without proper recognition and funding support, NI Water’s ability to deliver the targeted benefits to the customer are somewhat hampered. In raising the profile of the utilities sector and the importance of proper funding, it is, as noted by Sara Venning, a task not solely for one person, or organisation, and instead will require a collaborative approach from the wider industry. Displaying how other like-minded individuals can stress the importance of funding, Sara Venning also recently appeared before the Regional Development Committee, stating that the organisation’s constitution as a government-owned company does actually restrict its potential ability to deliver the best service and that, with less constraints, it could achieve so much more.
Law firm, Bircham Dyson Bell has reported that the UK faces what it describes as a “looming energy crunch” owing to the predicted loss of 25GW of generating capacity by 2030. The report highlighted the closure of 18 major power stations since 2012, representing a reduction of the UK’s total capacity by 14GW to little over 86GW. It also claimed the UK was on course to lose a futher 7GW by 2020 and another 18GW by 2030 if expected closures go ahead. Coal-fired plants at Longannet, Ferrybridge and Rugeley are all due to close this year. Eggborough meanwhile has been temporarily saved from closure after it was contracted into the Supplemental Balancing Reserve (SBR) for the winter of 2016/17. Its future after next year, however, remains uncertain. SBR has also contracted one of the four units at Fiddler’s Ferry although the three remaining units are due to come offline in a few short months. “We have observed increasing concern in recent years that as old electricity generation comes offline, new power generators are not being built at a rate that is keeping pace,” Angus Walker, Head of Government and Infrastructure at Bircham Dyson Bell commented. “Our research establishes the hard facts of how serious the situation is, finding that on current projections this is likely to result in a shortfall between supply and demand – in summary an energy crunch.” Despite documenting the promise of 18 new project which have been granted consent, the law firm’s image of the sector is somewhat bleak. It suggests that, with the upcoming plants having a combined generating capacity of less than 18GW, they will leave National Grid with a deficit of 19GW compared with 2012. Contributors to the the report were quick to point out inconsistent governmental policies as a major cause of the predicted “energy crunch”. Lawrence Slade, Chief Executive of Energy UK insisted the sector was facing real uncertainty and a lack of investment as a result. He claimed: “The cuts made, particularly to renewables, have been drastic and sudden. We need policy certainty and cross-party agreement.” It was just days ago that Energy UK recommended that the government review the Levy Control Framework (LCF) in order to provide clarify to companies and investors, a moved it hoped would inspire new confidence in energy generation.
Most recently, it has been announced that SSE will provide £12m of support to its most vulnerable customers, helping them with their energy bills and thus supporting customers most in need, not only of maintaining SSE’s services, but also of being able to manage their own finances at the same time. Of those eligible for the support, SSE will be personally identifying those most in need of this line of support and, as a result, those customers will then receive credits to their account automatically, keeping the process simple and targeted towards those of the greatest need. Specifically, the £12m fund is redirected money left for up to seven years by former customers who have moved, cancelled direct debits and failed to provide forwarding addresses and will see SSE utilise these funds in a responsible, socially recognisable manner. And, although SSE has actually worked tirelessly to locate the customers in question over the course of a number of years to process their refund, including using search agencies and checking against new customer accounts as well as through media and marketing campaigns, limited to no success has been achieved in contacting those remaining and, as such SSE is now in a position to utilise these funds for the benefit of others. SSE’s Director of Domestic Retail Stephen Forbes noted: “We know that some customers, for a variety of reasons, may have difficulty with their bills which is why we are providing debt assistance to tens of thousands of customers this year alone… We want to do more and we hope that this additional funding will make a difference for customers by freeing them up from energy debt and helping them start afresh.” SSE has already started the process of advising customers of the payments, aiming to continue to do so over the course of the next few months, but will also allow former customers to claim back credit fit they come forward and request as such. Regardless, utilisation of this £12m, in one manner or another, is nigh.
A brand new division launched by BAM FM, dubbed BAM Energy Limited has recently been launched with the intention of assisting clients in cutting back on their power consumption through the design and installation of sustainable power systems (comparable to biomass heating methods, CHP systems, photovoltaics and heat pumps) on behalf of a client over the course of the construction cycle of a brand new development; the value is then recovered over an agreed time period by means of a power purchase agreement, where the client then purchases its energy from BAM Energy at a competitive price.Reid Cunningham, Interim Managing Director of BAM FM, stated: “The purpose of establishing BAM Energy is to broaden our services and offer customers more choice…We find that clients are often unaware of green energy options or daunted by the upfront capital investment. Using our expertise, we can help them find the best energy option and facilitate its implementation.” Cunningham then also explained: “Our aim is to be able to offer clients the best energy options to suit their needs, regardless of budget restrictions.” Measures to cut back on power usage then include the changing of present lighting installations with LEDs, utilizing sensors to regulate lighting or the usage of sensible meters to manage heating systems.
Energy companies are divided over the need for a mid-period review (MPR) within the present eight-year price control for businesses operating both in electrical energy and gasoline transmission, and fuel distribution. Big six provider British Gas and consumer body Citizens Advice are heading up the decision for an MPR for all three sectors to establish whether the existing price control is appropriate. That call will take into account whether providers are offering value for money to consumers as well as addressing what has been described as the systemic “outperformance” of network operators according to their required outputs. In its recent submission on the potential MPR to the regulator, Ofgem, British Gas conceded: “We recognise that much has changed since the first round of RIIO price controls were finalised which, in turn, has significantly impacted consumers’ interests”. Charity and consumer lobbyist, Citizen’s Advice reported that the average return on investment for network companies in T1 and GD1 is “well in excess of what appears appropriate for such low-risk investment” – a stonking 9.4%. The charity went on express its support for an MPR and it represents “an opportunity to identify the root causes of outperformance, for both transmission and gas distribution.” It was only last November that Ofgem recommended an MPR, asserting that, over the last 12 months, it had recognised some issues with price control management that an MPR could address. Issues identified included by the body included: network output measures, strategic wider works submissions, and incentive on both consumer and stakeholder sides. Ofgem didn’t, however, establish any points for gas distrbution that required reform. As could be predicted, network operators have welcomed Ofgem’s findings on gas distribution while disagreeing with its support for a transmission-focused MPR, insisting the issues identified could be resolved without a sector-wide review. Trade body the Energy Networks Association (ENA) chipped in, saying the changes resulting from the price control are “within the range of uncertainty anticipated in the design of RIIO-T1 and can be managed through the existing uncertainty mechanism,” adding that an MPR runs the risk of creating two four-year price controls and may “undermine longer term investor confidence.” “Our transmission operator members would urge Ofgem to consider the longer term customer interest when assessing the scope of the RIIO-T1 MPR and not just the short terms benefits within the last four years of this price control,” ENA said. Distribution and transmission operator, SP Energy Networks was the single provider to say it would support Ofgem’s decision if an MPR get the go-ahead. The company did however add that it felt the issues could be resolved more successfully with the employment of specialist firms and bodies. SP Energy networks went on to insist that, “as a matter of fairness”, all companies – not just distribution – ought to reviewed if an MPR does go ahead.
Scottish Water has appointed two joint ventures to a £120m six-year technical consultancy framework. One venture between Atkins and RPS JV and one other between Mott MacDonald and MWH have been chosen to supply project management, design and development work in addition to feasibility studies to assist Scottish Water’s building partners. A joint venture between Morrison Utility Services and Aecom and the BBV Alliance, a partnership between Black & Veatch and Byzak (a part of Amey), have also been named as Scottish Water’s development companions in 2014. The new deal will end in 2021, however there may be an choice for Scottish Water to increase the contract to 2027. Scottish Water’s Director of Strategic Customer Service planning Simon Parsons mentioned: “ARC (Atkins and RPS) and m² (Mott MacDonald and MWH) possess a level of expertise which supports the delivery of our new investment programme. “The new investment programme will help support vital employment in the Scottish economy while enabling Scottish Water to build on the significant improvements made to water and waste water services in recent years.” ARC Chief Operating Officer Paul Aitken also mentioned: “Our mission is to [help] Scottish Water improve its service to customers and communities across Scotland by promoting more effective, resilient and efficient asset and operational solutions.” Judy Anderson, Framework Directior for the Mott MacDonald/MWH JV, mentioned: “I believe that m2 brings the right combination of talented and experienced people, to complement and support Scottish Water’s own resources in achieving its vision to be Scotland’s most valued trusted business.”
