Utility Week

UTILITY WEEK | 6TH - 12TH MARCH 2020 | 13 Finance & Investment The Department for Business, Energy and Industrial Strategy (BEIS) has revealed the winners of a competition to accelerate development of flexibility exchanges, awarding £2.2 mil- lion across two projects. The lion's share of the fund- ing – £1.6 million – will go to the TraDER project, which aims to create a market for multiple flexibility services. ELECTRICITY Flexibility exchanges receive £2.2 million funding boost from BEIS It is expected to go live in the next few months and will for the first time allow generators to buy space on the grid by trading network capacity with flexibility providers. This could include, for example, a wind farm paying a gas generator to turn down during windy weather. The consortium running the project is led by tech start-up Electron and also includes EDF Energy, Elexon, Scottish and Southern Electricity Networks, the Energy Systems Catapult, Community Energy Scotland, United Utilities and Kaluza. Meanwhile, Piclo has been awarded £562,000 to expand its existing Piclo Flex platform into a "one-stop shop" for all types of flexibility services. Piclo is already used by all six distribu- tion network operators in Great Net Zero Teesside aims to be a UK first Oil majors join forces to create a decarbonised industrial zone by using the North Sea for CCS A group of five European oil majors – BP, Shell, Total, Eni and Equinor – have formed a con- sortium to create a zero carbon industrial cluster in Teesside. The project, called Net Zero Teesside, will seek to decarbon- ise industry in the area by build- ing a carbon capture and storage (CCS) network to transport CO2 to reservoirs under the North Sea, including from a combined-cycle gas turbine plant that will provide power to local energy users. It was previously known as the Clean Gas Project and up until now was being developed by OGCI Climate Investments – a £1 billion investment fund created by the Oil and Gas Climate Initiative (OGCI), of which the consortium partners are all members. The group will work alongside the Tees Valley Mayor and Combined Authority to develop the cluster, which it says could be operational by the mid-2020s with the right support. It has already signed memorandums of understanding with three local industrial partners. Net Zero Teesside managing director Andy Lane said: "Its advantageous location, advanced planning stage, the expertise of our world class project partners and government support for decarbonisation in the UK mean Net Zero Teesside is uniquely positioned to become the UK's first decarbonised cluster. "The formation of such a powerful partnership led by BP demonstrates the industry's commitment to net zero . We're hugely excited to see Teesside back at the forefront of UK industry and want the project to progress further." Tees Valley mayor Ben Houchen said: "This world- leading industrial-scale decarbonisation project will safeguard and create 5,500 good quality, well paid jobs for local people." TG WATER Company ratings shift after PR19 Four water companies have been downgraded by global credit rat- ings agency S&P a£er accepting their final determination from Ofwat. Affinity, SES, United Utilities and Wessex were all lowered by one notch, but all remain "stable", it said. Anglian and Northumbrian, which rejected the final determi- nations and requested a referral to the Competition and Markets Authority (CMA), were placed on CreditWatch negative. S&P said the outcome of their appeals was uncertain and their current busi- ness plans indicate increased financial pressure. In a ratings report, the agency noted the companies' decision to appeal reflected the feeling that the determinations limited their ability to meet the challenges of the next five years with the funding Ofwat had allowed. On Anglian, S&P said: "If, based on the CMA's conclusions, Anglian's operating conditions do not improve significantly, we currently believe Anglian's credit metrics will remain below the range commensurate with the ratings during AMP7." It said Northumbrian's steep bill reduction contributed to the company's deterioration in credit quality as well as the sector-wide reduction in allowed cost of capital of 1.96 per cent and challenging targets. Meanwhile, Yorkshire, which is also appealing to the CMA, was revised to negative from stable because S&P believed the final determination "exacerbates downside risks". S&P said its current base case for Yorkshire did not assume material changes on operating conditions in AMP7, based on the outcome of the CMA review. It anticipated Yorkshire would incur performance penal- ties and saw limited potential for the company to outperform on its future cost allowances. ELECTRICITY Pivot Power orders first batteries Pivot Power has struck a deal with energy technology firm Wartsila to deliver 100MW of energy storage as part of its plan to create a nationwide network of up to 2GW of batteries support to electric vehicle charging. Two 50MW lithium-ion battery systems, installed by Wartsila at Cowley in Oxford and Kemsley in Kent, will be the first in the fleet to be completed. They are expected to be opera- tional before the end of this year. Announcing the plans in 2018, Pivot Power said it intended to install a 50MW battery system and up to 100 electric vehicle chargers at 45 locations around the country. The deal with Wartsila comes a£er Pivot Power was acquired by French energy giant EDF's renewable generation arm last year. The North Sea is a prime CCS resource Britain to help manage network constraints. Among other things, the Piclo Flex Exchange will allow the secondary trading of balancing and ancillary services for the National Grid Electricity System Operator. It is expected to go live later this year. Both trials will conclude in March 2021 and report back to BEIS by the following December. This week

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