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Utility Week 8th November 2019

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UTILITY WEEK | 8TH - 14TH NOVEMBER 2019 | 15 Policy & Regulation This week Carbon budgets urged for each department Energy and clean growth minister says he will consider 'fair' and 'reasonable' idea The energy and clean growth minister has told MPs he will look into the idea that govern- ment departments should be set their own carbon budgets. Giving evidence to the House of Commons Environ- mental Audit Committee, Kwasi Kwarteng was pressed on whether individual ministries should be set budgets to help implement the wider drive to reach net zero across government. He said the idea is a "fair" and "reasonable" one, which he would consider, adding that it is "quite right" for the government to take a lead on cutting emissions. Kwarteng also defended the government's progress on cutting emissions from its estate, which he told the committee were down by 57 per cent since 2010. Responding to criticism by the committee's chair Mary Creagh that this reduction had largely been achieved by slimming down the government estate, he said: "Consoli- dating the estate and making the whole department more efficient in terms of its energy use is part of that." But investment in decarbonisation had to be bal- anced against other government objectives, Kwarteng said: "We have a finite amount of resources and have to make decisions about how to spend that money." Responding to the suggestion that measures such as energy efficiency could be ringfenced from other govern- ment spending, he warned that this would limit manag- ers' flexibility when responding to other problems, like leaking roofs. Kwarteng also revealed that he had insisted on using an electric vehicle when being driven on ministerial duties since joining the Department for Business, Energy and Industrial Strategy. DB WATER Regulators say firms must react quickly Water regulators have jointly promised to change water resource planning methodol- ogy and set out expectations for water companies to adapt to changes before they happen. In an open letter to water companies, Defra, the Environ- ment Agency (EA), Ofwat and the Drinking Water Incorporate (DWI) updated stakeholders on activities to build resilience in water supplies and the expecta- tions of the regulators. "We expect you to continue to evolve your plans in real time, adapting and changing to meet the challenges faced year on year, instead of waiting for each five-year cycle of WRMP and business plans," the letter read. The four bodies wrote to stakeholders in August last year outlining five areas where extra effort was needed – including making business plans more ambitious. Achievements since last August's call to action included the EA's effort to establish a national framework for water resources, which highlighted the importance of sharing methods and having common goals. Five water resource man- agement groups have been established across England and Wales – the letter advocated for an increase of collaborative working between water users and developers for industrial growth. "We currently only observe this happening in pockets, and we want to see more." ENERGY RWE released from trading obligation Ofgem has approved a request by RWE to be released from the market making obligation (MMO) introduced in 2014 to force incumbent suppliers to offer energy trades to smaller rivals. The regulator said the sale of the company's stake in Innogy removed the rationale for the obligation, which originally applied to all of the big six. The MMO requires obligated companies to post offers on trading platforms to buy or sell power over a variety of time- scales, limiting the spreads between the two. It was designed to improve the liquidity of the wholesale market and enhance access for other suppliers. In its request to Ofgem in September, RWE said the obliga- tion has become unnecessary ažer control over its former retail arm, Npower, was transferred to Eon as part of its acquisition of a majority stake in Innogy. The regulator has approved similar requests from Eon, Scot- tish Power and Centrica ažer they sold off many of their gen- eration assets – the MMO now applies only to SSE and EDF. Prompted by concerns that they may be lež unfairly burdened by the obligation, Ofgem has revealed plans to end it entirely if RWE's request was approved. Kwarteng: Whitehall to take lead on emissions Ofgem has ordered two chal- lenger suppliers – Nabuh Energy and Breeze Energy – to pay outstanding bills under the Renewables Obligation (RO). Nabuh Energy said its out- standing RO will be paid in full on or before 8 November, ažer it was slapped with a provisional order. It added that the missed payment was "not a cause for ENERGY Nabuh and Breeze ordered to make Renewables Obligation payments concern" for any of its suppli- ers or customers – it said it had arranged funding but a last- minute delay meant it missed the deadline. The Sheffield-based company, which owes £872,200.62, blamed the number of prepayment customers it has compared with other suppliers. Nabuh, which took on the customers of Snowdrop Energy last year, said it had seen "signif- icant growth" over the past year and as a result had experienced more pressure during the spring and summer months. Breeze Energy owes more than £486,000 plus interest ažer the company missed the dead- line for late payments. Breeze failed to present the required number of renewables obligation certificates by 1 Sep- tember or make up the shortfall through buyout payments in time for the cut-off on 31 August. It subsequently told Ofgem that it would meet the 31 Octo- ber deadline for late payments but did not do so in full. Last month, a final order was issued compelling Gnergy to make its outstanding payment of £674,000 plus interest by 31 October.

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