Utility Week

UTILITY WEEK | 29TH MARCH - 4TH APRIL 2019 | 9 Policy & Regulation This week Nolan 'nervous' about heat decarbonisation Ofgem chief fears consumer backlash if they are compelled to install new types of heating system The head of Ofgem has expressed concerns over the decarbonisation of heat, warn- ing there could be a backlash from consumers if they are forced to adopt new technologies such as hydrogen boilers. Speaking at the annual spring forum of Aurora Energy Research, the chief executive of the energy regulator, Dermot Nolan, said he is relatively "sanguine" about the decarbonisation of power and transport, but admitted he is "far more nervous about the issue of heat". Nolan noted there are two main options for decarbonising heat: electrification or converting gas networks to run on low-carbon hydrogen. He said a hydrogen grid "would be great" but has not been demonstrated at scale and would require "huge" regulatory changes. He was recently shown a hydrogen boiler and was "quite impressed". But given the "reluctance" of some people to welcome smart meters into their homes, Nolan worried that consumers would react badly if they are compelled to install a new type of heating system. The electrification of heat would also mean abandoning £40 billion of existing gas infrastructure. "They are big challenges," he added. "I don't see an obvious answer. I'm relatively positive about human ingenuity and the ability to evolve. But I think significant and difficult decisions will need to be made and then transmitted to the public in a way that will also be intensely challenging." TG WATER Gove supports cut in River Test pumping Michael Gove has backed moves by the Environment Agency to force Southern Water to cut by 40 per cent the volume of water that it abstracts from the River Test, one of south Hampshire's main sources for water. The decision was referred to the environment secretary aŽer Southern objected to a notice issued by the EA in 2017 outlining the revised licence conditions. Under the new terms, the volume that Southern can pump out of the chalk river will be capped at 80 million litres (Ml) per day, compared with the current maximum of 136Ml. The annual limit will be 29,200Ml and caps will be imposed stipulating when abstraction is banned because flow levels in the river are low. The tightened restrictions are designed to protect the Lower Test Valley and Test River sites of special scientific interest. ENERGY Body to advise on carbon capture An industry group has been formed to advise government on the development of carbon capture, usage and storage (CCUS). The full list of members has not been revealed, but it includes Cadent, BP and Drax. The body will provide evidence-backed recommendations on the cost structures, risk-sharing arrangements and market mechanisms that will be necessary to meet the goal of deploying the first CCUS project in the UK by the mid-2020s. Energy minister Claire Perry said: "The new advisory group will help ensure that we take full advantage of the potential of this emerging industry, with a view to deploying the first CCUS facility in the UK from the mid-2020s." PAN-UTILITY Regulators seen by public as 'detached' The head of the National Audit Office (NAO) has told regulators that they oŽen seem "somewhat academic and detached" to members of the public. Unveiling a study into the performance of the four key regulators – the Financial Conduct Authority, Ofcom, Ofgem and Ofwat – by Parliament's public spending watchdog, Sir Amyas Morse said they should be better at showing the results of their activities. "Regulators need to do more to show the concrete results they are aiming to achieve for consumers," he said. "The regulators' results can come across as somewhat academic and detached from people's practical concerns." Nolan: 'nervous about the issue of heat' Political Agenda David Blackman "This Remainer helped deliver the voters' verdict" The agenda for an energy confer- ence, being organised by the union Prospect next week, lists Richard Harrington as "tbc". The erstwhile junior minister at the Department for Business, Energy and Industrial Strategy, who has been very publicly teetering on the brink of resigna- tion from the government for several weeks, is unlikely to be turning up now. AŽer virtually goading the prime minister in an interview last month to sack him, the Harrington quietly laid the groundwork to ensure this wouldn't happen, piloting legis- lation through the Commons to create a UK safeguarding regime. The contrast is clear with arch Brexiter and transport secretary Chris Grayling, who famously signed an emergency ferry contract with a company that has no vessels. Harrington can say that he helped deliver the voters' verdict – even if he may have had to do so through gritted teeth. Watford MP finally jumped when he decided that his ministerial career was ultimately less impor- tant than making a stand on preventing a disorderly Brexit. Harrington, has made no secret of his desire for the UK to remain in the EU. The irony is that this passion- ate Remainer has been responsi- ble for one of the government's more successful Brexit prepara- tion efforts. A couple of years ago, there were headlines galore about the risks involved in the UK's depar- ture from the Euratom treaty, which provides the framework to prevent nuclear materials falling into malign hands.

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