Utility Week

12 | 17TH - 23RD MAY 2019 | UTILITY WEEK Policy & Regulation This week ECHR 'is no threat to renationalisation' Labour says human rights law will not scupper plans to return utilities to public ownership John McDonnell has dismissed the risk that Labour's plans to renationalise utilities could be overturned by the courts on human rights grounds. During an interview on Radio 5 Live's Pienaar's Politics pro- gramme, the shadow chancellor rejected the suggestion that his party's plans would be success- fully challenged in the European Court of Human Rights. Such a case could be mounted on the grounds that failure to pay full market value would represent an inter- ference with property rights, which are protected by the European Convention on Human Rights, according to an analysis by law firm Clifford Chance last year. A report in The Sunday Times detailed how Labour plans to pay shareholders in the UK's water companies £20 billion – less than half their £44 billion market value, as claimed in a report by the Social Market Foundation last year. McDonnell said: "Where there have been challenges, the court has upheld the ability of governments to do that." He reiterated that shareholders would not be hit in the pocket because they would be compensated with government bonds, offering stable returns. During the interview the shadow chancellor also out- lined his proposals to delist companies from the London Stock Exchange if they fail to tackle climate change. He said the exchange would evaluate how companies are performing in relation to standards on efforts to address global warming, alongside other audits that it carries out. DB ENERGY Capacity market verdict delayed A landmark European court bid to re-open the UK's capacity market is unlikely to be deter- mined until October because the judges will be on holiday. David Buttery, deputy direc- tor of energy security at the Department for Business, Energy and Industrial Strategy (BEIS) revealed that capacity provid- ers may have to wait until a˜er the summer to learn the verdict on the European Commission's appeal against the European Court of Justice's (ECJ) decision to block the UK scheme. The ECJ overturned the com- mission's decision to authorise the UK's scheme under the EU's state aid rules. A˜er the court's verdict, BEIS has suspended payments to capacity providers. ENERGY Solarplicity hit with second Ofgem order Solarplicity is in the regulator's spotlight for a second time this year because Ofgem understands the supplier failed to pay several feed-in tariff (FIT) generators. The company has previously been rapped for its poor cus- tomer service and has now been issued with a provisional order to pay the outstanding money. The FIT scheme is a govern- ment programme to promote the uptake of renewable and low- carbon electricity generation. Participating licensed electricity suppliers must make payments on both generation and export from eligible installations. Solarplicity is thought to have failed to pay several FIT genera- tors despite receiving FIT lev- elisation payments that should allow the company to do so. As well as being required to pay the outstanding money, Solarplicity has also been ordered to make future FIT payments to generators by the relevant due dates. ENERGY Charging reforms 'to delay renewables' Ofgem proposals to recover residual network charges through fixed charges on con- sumers could delay the advent of subsidy-free renewables by up to five years, Aurora Energy Research has warned. In contrast to the regulator's own assessment, Aurora said the reforms would also benefit older and less efficient combined-cycle gas turbines. Residual charges are designed to recover the sunk costs of the existing power grid. They are not intended to reflect users' impacts on network costs. Consumers currently pay around three-quarters of residual charges with the rest levied on generators. McDonnell: shareholders will be compensated Political Agenda David Blackman "All-consuming Brexit is set to last for years." It may beggar belief but the cur- rent Brexit negotiations could be a walk in the park compared with the next phase of the EU withdrawal process. That was the message of the government's former national security adviser at a seminar last week. The first stage of the with- drawal process may not be over with the prime minister's deal stymied, but if it ever gets passed, Lord Ricketts warned that the next and more detailed Utility Week has been told that work at BEIS on the energy white paper, which is meant to reset policy, has gone quiet recently. This paper is seen as pivotal for taking forward policy in areas like carbon capture and storage and cutting the cost of new nuclear power plants to meet climate change targets. The trouble for the UK's politicians is that global warm- ing waits for nothing, not even Brexit. stage of the Brexit process will tie up government for years He predicted that the negotia- tions, which will cover a range of issues including nuclear and gas supply, will go on for years and "encompass pretty much" all of Whitehall. If the peer is correct, that spells creeping paralysis for the rest of government business. In addition, Theresa May's departure from No 10 is now a matter of when rather than if, heralding a wider government reshuffle. Given this, ministers can be forgiven for not want- ing to stick their necks out by proposing new and potentially controversial policies.

• Cover