Utility Week

UTILITY WEEK | 31ST AUGUST - 6TH SEPTEMBER 2018 | 15 This week Scottish Power plans second 2018 price hike Supplier blames rises in wholesale costs for second hike in standard variable tariff this year Big six supplier Scottish Power has announced it is increasing its standard variable tariff (SVT) for the second time this year as wholesale energy costs rise. Prices will increase by an average of 3.7 per cent from 8 October for about 900,000 dual fuel customers. The company blames a 20 per cent increase in wholesale costs since April. It says the cost pressures are the same ones that caused industry regulator Ofgem to announce a 4.4 per cent increase to the prepayment safeguard tariff cap earlier in August, the second increase this year. Neil Clitheroe, chief executive, retail and generation, at Scottish Power, said: "More than two-thirds of our customers are on fixed price products or other tariffs not impacted by this price change. Those customers affected by the price change will be contacted and offered the opportunity to move to a fixed price tariff alternative and avoid this increase." Stephen Murray, energy expert at MoneySuperMar- ket, said: "The changing nature of the wholesale market means the price of energy is going up all the time and suppliers now feel the need to reflect this in their bills." Gillian Guy, chief executive at Citizens Advice, said: "Vulnerable people in particular will be hit by this price rise. We know that those least likely to switch, and there- fore on a standard variable tariff, include the elderly, those on low incomes and people with disabilities." Scottish Power last raised its SVT – by 5.5 per cent – in June, again blaming rising wholesale energy costs. AJ WATER Affinity to remove offshore subsidiary Affinity Water has become the latest water company to announce it is considering removing its Cayman Islands financing subsidiary from its structure. The water-only company intends to replace Affinity Water Programme Finance Limited (AWPFL) with a UK- registered subsidiary. It has appointed advisers to develop its proposals. AWPFL was established in 2013 to raise long-term finance for Affinity Water's investment programme and operations through the issue of bonds listed on the London Stock Exchange. It was incorporated outside the UK for legal reasons that are no longer relevant, Affinity said. ENERGY Green tariffs are among cheapest Green energy tariffs are among the cheapest on the market but common misconceptions about them remain, Uswitch has found. Despite many believing that green energy is the most expensive, the price comparison website found the 10 cheapest eco-tariffs could save homes an average of £273 if they switch from a big six standard tariff. The cheapest green energy tariff available today is £859 a year, £278 cheaper than the average big six plan and £354 less than the average price of a big six standard variable tariff. Furthermore, the number of environmentally friendly tariffs has risen to 57, an increase of 21 since summer last year. Uswitch says renewable electricity and biogas are now more plentiful. This has led to competitive pric- ing and a greater choice of eco- tariffs as more challenger brands seek to differentiate themselves. GAS River diversion almost complete Cadent has nearly completed a £1 million project to divert the River Mersey at Didsbury near Stockport, Greater Manchester to safeguard gas supplies. Erosion from the watercourse had threatened one of the main gas feeds into Manchester. A 400m stretch of the river is being moved 40m, back to its original 1960s channel to safeguard the high-pressure pipe that feeds about 250,000 homes and businesses in Manchester. The project has involved 18 months of "meticulous" plan- ning and extensive liaison with the Environment Agency, as well as the local authorities and landowners. Construction began in June and is due to finish by the end of September. Citizens Advice says vulnerable will be hit hardest Finance & Investment Stock watch 35 30 25 20 15 10 5 0 EU ETS ALLOWANCE PRICE, TWO YEAR 2010 2012 2014 2016 2018 EU ETS ALLOWANCE PRICE, TEN YEAR The price of EU Emissions Trading System (ETS) allowances surpassed €20 per tonne for the first time in almost a decade during August. It has more than quadrupled since May last year when they were trading at less than €5 per tonne. In February, EU lawmakers passed a package of reforms to the mechanism that sought to end a chronic oversupply of allowances. 25 20 15 10 5 0 Jan 2017 Jan 2018 Jul 2017 Jul 2018 euros euros

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