Utility Week

UTILITY WEEK | 3RD - 9TH APRIL 2020 | 5 Offshore wind will soon become the largest single source of renewable generation in the UK after overtaking onshore wind across both of the past two quarters in 2019. The latest annual figures from BEIS show the gap between the two technologies tightening significantly during the year. Onshore output rose by 6.6 per cent to 32.2TWh, while offshore generation jumped by 19.6 per cent to 31.9TWh. WATER Pennon eyes growth for South West after Viridor sale Pennon Group, the parent com- pany of South West Water, has stressed it is in a strong position in a period of uncertainty as it deals with coronavirus and enters a new five-year investment cycle. The company said it would pursue "growth options" in the water and wastewater sector a•er the completion of the sale of its waste management business Viridor to Kohlberg Kravis Roberts & Co for £4.2 billion, which is due to complete this summer. It has extended its water and wastewater services to the Isles of Scilly, which had previously been independently supplied, largely from desalination. South West Water was granted the licence by Defra to take over the supply and wastewater services a•er beginning assessments in 2018. This will come into effect from 1 April. Drinking water services will be supplied on all five inhabited islands and wastewater services on St Mary's and Tresco, where a sewerage network already exists. Ahead of its full-year results in June, Pennon said South West Water will end the current five- year AMP cycle in a net reward position a•er outperforming on its outcome delivery incentives. It was affected by the prolonged wet weather this year, which it said would mean a reduction in full-year revenue. WATER Virus uncertainty delays CMA appeals The CMA has been granted an exten- sion of six months to redetermine the business plans of four water companies because of coronavirus. Ofwat accepted that the work- load involved with four referrals – from Anglian, Bristol, Northumbrian and Yorkshire – plus the disrup- tion caused by the pandemic, meant that the initial timeframe of six months to complete the investigation was unreasonable. It has extended the deadline to 19 March 2021. The regulator said "given the nature and scale of work involved in four water industry price control references and the possible disrup- tion from the COVID-19 situation", there were "special reasons why the reports cannot be made within the period specified". GAS Uncertain future for bioenergy feedstock The long-term availability of bioen- ergy supplies in the UK is "highly uncertain" and requires fresh analy- sis to establish whether feedstocks can continue being imported out to 2050. National Grid ESO gave the warn- ing in a report examining several of the key uncertainties identified in its Future Energy Scenarios for 2019. It said bioenergy offers multiple benefits, including high energy density, the potential to generate negative emissions and suitability for industrial processes that would otherwise be difficult to electrify. However, it cautioned: "This critical resource is nuanced and has interac- tions right across society." Bioenergy crops compete for land and water and are a finite resource; the more used in one sec- tor or country means less available for another. One of the main issues high- lighted by the ESO is that although imported feedstock is critical to some pathways for reaching net emissions by 2050, the "underlying assumptions for this are not well understood or tested." ENERGY Suppliers to lobby BEIS over fears of 'debt contagion' Energy suppliers are to write to the government to seek support in deal- ing with business customers strug- gling to pay their bills during the coronavirus pandemic, Utility Week understands. It comes as industry voices expressed concerns about proposals from BEIS for a morato- rium giving struggling companies breathing space from creditors – such as energy suppliers – enforcing their debts for a period while they seek a rescue or restructure. Ryan Thompson of Baringa Partners said: "I can only see this adding to the late payment/debt issue, which will most likely result in industry looking to BEIS for support in managing the knock-on impact, otherwise there is a real risk of debt contagion across the industry." 1 million Electricity switches in 2020 pass the 1 million milestone, according to the latest statisics from trade organisation Energy UK. £26/barrel The price of Brent crude fell to historic lows last week, at one point trading below £26 a barrel, a price last seen after the financial crash of 1987.

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