Utility Week

UTILITY WEEK | 3RD - 9TH MAY 2019 | 17 This week Energy efficiency move may cost £65bn Government has committed to improve as many UK homes as possible to EPC band C by 2030 Improving the UK's housing stock to energy performance certificate (EPC) band C level will require up to £65 billion worth of invest- ment, Claire Perry has revealed. The minister of state for energy and climate change told MPs last week that the Depart- ment for Business, Energy and Industrial Strategy (BEIS) has estimated that bringing all homes up to the EPC band C standard would cost between £35 billion and £65 billion. The government has committed to bringing as many homes as feasible up to EPC band C by 2030. Giving evidence to the select committee last week, Perry said this figure is similar to how much the govern- ment has so far spent on decarbonising the power sector. But she said the overall figure could be "much lower" if a stronger energy efficiency push from the government helps to drive down the cost of energy efficiency measures. Perry also defended the government against criticism of its failure to implement a recommendation in the Bonfield review published at the end of 2016. The review recommended that installers accessing Energy Company Obligation funding should have to meet a new quality mark for installation of energy efficiency measures. Perry said the government intends to legislate to implement the scheme "this year". But citing concerns in evidence submitted by SSE to the committee about the delays to the review's implementation, its chair Rachel Reeves said she was "really disappointed" the recommendation has not been implemented more than two years since its publication. DB ENERGY Cap hits Scottish Power earnings Scottish Power's power supply business has been hit by the mild winter and the impact of the government's energy price cap, new figures have revealed. Figures released by Scottish Power's parent company, Iberdrola show earnings before interest, tax, depreciation and amortisation in its liberalised business slumped by 67 per cent in the first three months of the year, to £44 million. Iberdrola said this was primarily due to mild weather in comparison with last year's Beast from East and the intro- duction of the energy price cap. There was better news for Scottish Power's renewables division, which saw earnings by 30 per cent – up by £38.2 million to £166 million. Iberdrola said this was due to increased wind volumes and "favourable market conditions". The company's networks business also reported a 5 per cent rise in earnings, up £9.6 million to £216.6 million. ENVIRONMENT Decarbonisation can be at a 'very low cost' The UK can fully decarbonise by 2050 at a "very low cost", the first head of parliament's climate change watchdog has claimed. Lord Turner, chair of the Energy Transitions Commission (ETC), told a briefing on 24 April that the "net zero" emissions tar- get could be achieved even faster than the middle of this century. At the event, organised by the Energy and Climate Intelligence Unit think-tank ahead of the publication of the Committee on Climate Change's (CCC) report on the feasibility of meeting the zero- carbon goal by 2050, he said: "The critical thing is that we can do it at very low cost by 2050." And meeting the net zero goal by 2045 is achievable with "real effort and some behav- ioural change", the former CBI director general said: "If society is willing to accept more than a trivial cost, we could bring that date forward." The government has sought the CCC's advice following the Intergovernmental Panel on Climate Change's conclusion last October that global emissions must be cut to net zero by 2050 to prevent average worldwide temperatures rising 1.5 degrees above pre-industrial levels. The government's current target is to cut carbon emissions to 80 per cent of 1990 levels by 2050. Lord Turner, who chaired the CCC from 2008 to 2012, said that in order to meet the more stretching net zero target, the electricity system should "ideally" be "almost entirely" decarbonised by 2030. See Political Agenda, p9 Perry: the overall figure could be 'much lower' Finance & Investment Stock watch 8.50 8.00 7.50 7.00 6.50 6.00 IBERDROLA SHARE PRICE, FIVE DAYS Dec 2018 Feb 2019 Apr 2019 IBERDROLA SHARE PRICE, SIX MONTHS Iberdrola shares fell by only 1 per cent last Friday (26 April) despite its UK subsidiary Scottish Power reporting a two-thirds fall in first- quarter earnings from its retail division. The Spanish utility blamed the slump in earnings on milder weather following last year's Beast from the East and the introduction of the price cap on default tariffs at the start of 2019. 8.20 8.10 8.00 7.90 7.80 7.70 25 Apr 26 Apr 29 Apr 30 Apr euros euros

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