Utility Week

UTILITY WEEK | FEBRUARY 2021 | 9 …and what they mean of existing interconnector energy trading arrangements. There will also be a new forum to co- ordinate offshore renewable energy develop- ment in the North Sea. The forum's remit will include moves to develop an offshore grid, joint projects in the North Sea, maritime spa- tial planning and sharing best practice. What they said Zac Richardson, head of interconnectors at National Grid: "Preparations stood us in good stead: the interconnectors are flowing and customers are happy." Silke Goldberg, partner at Herbert Smith Freehills: "Given the architecture of the agreement, we will be in semi-permanent discussions with the EU about particular protocols: Brexit got done but Europe hasn't disappeared." What this means As Goldberg points out in David Blackman's analysis of the deal (p16-17), the debate over our future relationship with the continent is by no means over. While nothing has really changed in terms of the flow of energy through interconnectors, a new framework is needed and in its absence the invest- ment case remains highly uncertain. Clearly this presents a challenge to the ambitious plans for the North Sea as a hub of renew- able energy. However, these green ambitions are shared on both sides of the Atlantic and there will be a common willingness to secure a future direction as soon as possible. What to look out for The negotiations with the EU on energy will not be conducted in isolation and the kind of brinkmanship we saw in the final months of 2020 is likely to be replicated again. The risk is that energy, on which there is relative una- nimity, ends up hostage to disagreements in other areas, especially if Boris Johnson chooses to make a public show of the power of sovereignty in other areas. Meanwhile, National Grid Electricity System Operator (ESO) continues to push ahead with plans for implementing the Trans European Replacement Reserves Exchange (TERRE) within Great Britain. In its most recent update, the ESO indicated that the most likely scenario was for TERRE to oper- ate in "standalone" mode. A cost-benefit analysis will now be car- ried out on the feasibility of standalone mode, while an interconnector subgroup will be convened to consider technical details such as operating protocols and commercial arrangements. company. As part of this work it issued HR1 and S.188 notices, which allow it, as a "last resort", to terminate workers' contracts and issue new ones with updated terms and conditions. The revised contract proposals have been accepted by Unite and Unison but GMB's ballot in December found 89 per cent in favour of industrial action. Since then there has been a war of words between the two sides, much of it focused on whether Centrica is a profitable company or not. It led to a bizarre situation on the pub- lication of the group's January trading update in which its message to the mar- ket was around "resilience" and "caution" while the trade union trumpeted "costs down, the business generating cash, the loss of customers halted and the earnings per share above market expectations". What to look out for As Utility Week went to press there had been no break in the hostilities. GMB appeared to be digging in for a prolonged fight having issued a call for a strike fund from the rest of its members and fraternal unions. For Centrica chief executive Chris O'Shea the new contracts are a core part of his strategy. He will also be mindful of the fact that none of his predecessors were able to successfully face down the unions. The group's preliminary results in Febru- ary should give us some indication of how O'Shea's route map for evolving Centrica has progressed and whether it includes any room to compromise with the unions. "Sadly, not all of these retrofitting schemes and installation schemes have been ideal for the consumer. Some of them have been brilliant, but you have to ensure that they really work. We will certainly be doing that." What this means The challenge of bringing down emissions linked to home heating has all too ožen been one that has been kicked into the long grass. However, the past six months have finally seen the government tackling the issue, notably in its goals for developing technolo- gies to decarbonise heat. But ensuring homes are set up to retain the heat that is generated is an essential first step and while GHG is a move towards that, it has achieved little so far. In the latest update delivered to the House of Lords at the beginning of January, the government said 58,000 applications for GHG funding had been received since the scheme opened in September and 11,000 grants issued. Of the remainder, 11,000 applicants are being pro- cessed and 35,000 have gone back for further information or clarification of quotes. When the scheme was launched, the government boasted that it would improve the energy efficiency of over 600,000 homes. What to look out for It seems inevitable that GHG will be extended again, perhaps alongside a further overhaul of the scheme. Meanwhile, the government's recently published response to a consultation on the Future Homes Standard, which will govern new residential development from 2025, confirms it will press ahead with more immediate plans to update Part L regulations to cut emissions from new homes. These involve a combination of improved build- ing fabric standards, such as double glaz- ing, and deployment of low-carbon heating and micro-generation devices, such as solar panels. This option would result in a 31 per cent cut in carbon emissions from the typical new-build property compared to a dwelling that meets current regulations. For a wider steer on decarbonisation of heat, all eyes remain on the Heat and Build- ings Strategy, which the government has promised this year. Campaign of Industrial action shows no sign of abating Stay abreast of all the news, all of the time: www.utilityweek.co.uk

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