Utility Week

UTILITY WEEK | 6TH - 12TH MARCH 2020 | 9 Policy & Regulation This week NIC calls for a flexible electricity system Commission says future interconnector projects should be prioritised as the UK exits the EU The government's infrastructure adviser has told ministers that ensuring there are "no barriers" to future interconnector projects should be prioritised as the UK exits the EU. In its Annual Monitoring Report 2020 published last week, the National Infrastructure Com- mission (NIC) notes that an addi- tional 1GW of interconnection capacity came on stream during 2019. In addition, it points to Ofgem's regulatory approval for the construction of a further 12.9GW of interconnection capacity during the year. It says these, combined with moves such as the rein- statement of the UK's capacity market, meant there had been progress on developing a flexible electricity system during 2019 and that "there is potential for the UK to develop a flexible, highly renewable energy system". But the NIC says more "concerted and decisive" action must be taken to deliver a flexible electricity system, including work by the government to maintain access to future interconnector projects in its negotiations with the EU. The report, which tracks the government's progress on meeting the NIC's own recommended infrastructure improvements, warns that the UK's interconnector capacity could be at risk if access is not agreed. Sir John Armitt, chair of the NIC, said: "The UK desperately needs a strategy that looks well beyond this Parliament, setting out infrastructure policy and funding up to 2050. It must contain goals, plans to achieve them, funding to deliver those, and deadlines for delivery." DB see Analysis, p20 WATER Budget cuts to cost 200 jobs at Anglian Anglian Water will be cutting around 200 jobs over the next five years to make "operational efficiencies" to finance its busi- ness plan a–er a tough final determination from Ofwat. The company said its aim throughout is to protect its core business and the service for its customers, but that regrettably it had to axe jobs. Workers' union Unite, which has hundreds of members at Anglian, said it is "deeply concerned" about the pressures Ofwat's decision placed on the company and will support it dur- ing its appeal to the Competition and Markets Authority (CMA). An Anglian spokesperson said: "As a consequence of the very challenging final determi- nation of our business plan for the next five years, we're having to make a number of operational efficiencies. We are doing all we can to look for savings that don't result in redundancies, but regrettably we will be removing around 200 posts across all areas of the business. Most of this will be through natural attrition and by not filling vacant roles, but it is likely there will be around 100 targeted redundancies." Unite vowed to minimise the number of positions affected. Anglian announced on 14 February that it rejected the regulator's decision about its PR19 business plan because it could not finance what it believes Anglian must achieve to bring resilience to its region. ENERGY British Gas probed over PPM changes British Gas is being investigated by Ofgem over its handling of changes to how its prepayment meter (PPM) customers top up their accounts. The supplier recently switched its PPM top-up pro- vider from PayPoint to Payzone and from 1 January increased the minimum payment from £1 to £5 due to "increased transaction costs". The regulator says it is looking into concerns that the supplier's handling of these changes led to "customer confusion and harm". Specifically, Ofgem has asked British Gas to explain its deci- sions and analysis of the impact the changes would have on its customers. It will then assess whether it took appropriate steps to identify and manage key risks. Earlier this month, British Gas reversed its decision to increase the top-up payments, a move welcomed by Ofgem. British Gas said it is "fully co-operating with Ofgem"; the regulator stressed that the open- ing of the case does not imply it has made any findings about non-compliance by British Gas. Sir John: UK desperately needs a strategy Political Agenda David Blackman "Onshore wind is back – at least on paper" The move to allow onshore wind and solar projects back into the contracts for difference (CfD) auction regime is on the agenda. However the timing is a surprise. The Conservative manifesto last time round didn't mention the issue, freeing the re-elected government's hands to perform last week's volte face. Meanwhile, the government was finding it increasingly difficult to maintain its line. Next week's Budget will see its response to the National a section of the Conservative party's core, rural support. The planning restrictions on onshore renewables in England, which give local decision-makers a veto, have not been li–ed. With very few outstanding onshore wind consents le– south of the border, this could end up as effectively a subsidy regime for Scotland, where a much friendlier planning regime is in place. This week's U-turn may not be as dramatic as it looks at face value. Infrastructure Assessment. This threatened to put ministers on the spot by having to justify why they didn't want to accept advice of the National Infrastructure Commission that the Pot 1 auction for onshore wind and solar should be reopened. The starting of a legal chal- lenge next week against the suspension of the Pot 1 auctions threatened to cause further embarrassment to BEIS. This government has shown that it is has no hesitation about picking fights. Ministers prob- ably calculated, though, that they had more to lose politically by beating a retreat on this issue even if doing so would rile

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