Utility Week

UTILITY WEEK | MAY 2021 | 9 …and what they mean What this means As the comments above suggest, the onus is now on action. It is almost two years since Theresa May's valedictory act to enshrine the net zero 2050 date in law. Since then there have been many more bold statements and plenty of targets but very little in the way of concrete action to propel us along that path. The fact that the now defunct Green Homes Grant is currently the main legacy of Boris Johnson's 10-point green plan six months ago (see comment, p19) is a sad indictment of progress so far. There is also concern that although the UK can be proud of its achievements so far, to a certain extent this has been because of low-hanging fruit, with very little obvious disruption to the public from the energy transition. The new target means that from today's base, we need a 63 per cent cut in emissions in just 15 years. That will involve much more of the same, in terms of proliferating renew- able generation but will also involve massive changes to the ways consumers interact with the energy system. Getting public buy-in will involve being able to explain how all the var- ious cogs work together to produce net zero. What to look out for The government currently has the convenient shield of purdah around the local elections in which landmark policies are generally not announced (although long-term targets seem not to be covered). However, once 6 May has passed the pressure will be on to deliver in key policy areas. Decarbonisation of heat is perhaps the most crucial. We need to fast-track innova- tive solutions, skill up workforces en masse, secure investment and develop a cred- ible communications plan to sell low-carbon heat to the public. But all of this is depend- ent on the government setting out its road- map and indicating the support it is willing to give to the technologies that will facilitate this transition. The heat and buildings strat- egy and the paper on hydrogen, both due this "spring" will be crucial to instilling this confidence. Then in the autumn (again subject to the loose definition Whitehall applies to the sea- sons), the government has pledged to pub- lish its net zero review. This is perhaps the most important document of all – setting out exactly how its ambitious targets will actu- ally be achieved. Octopus deal doesn't change the ultimate ownership, with both businesses still under the umbrella of Octopus Group. However, it does, of course, make Octopus Energy an even more viable candidate for sale or sepa- ration from the wider group, through per- haps a public listing. There is, however, no suggestion that there are plans afoot for this. What the merger unquestionably does is allow Octopus to rise above the ongoing argument around the loose term "greenwash- ing". Specifically, the issue over whether the use of renewable energy guarantee of origin (REGO) certificates gives suppliers the right to claim they sell "100 per cent renewable electricity" just won't to go away. In this regard, Ovo's move may be sig- nificant. As one of the country's largest sup- pliers, with a widely publicised Plan Zero campaign, it is clearly aware of the need to show a direct link to renewable sources. What they said With PR24 planning under way the Salmon and Trout Conservation group said water companies' plans for 2025-30 "must be suffi- cient to allow water companies to meet their duties in relation to the use and operation of all CSOs". In the letter to Pow, the group said plans would be open to legal challenge should they not sufficiently deal with CSOs. "We have made clear to the water compa- nies that they must take their environmental obligations seriously," a Defra spokesperson said in response to the letter. "New measures on reducing storm overflows will be put into law – committing the government to produce a statutory plan and report regularly to Par- liament on progress. This will be an impor- tant step forward to cut down the water sector's reliance on storm overflows." What this means The multi-billion-pound question of how to deal with CSOs is not going away anytime soon. Water UK estimated the cost of replacing the sewerage network to be in the region of £100 billion and said it would require 25 years to complete. Although public pressure has been mounting to deal with overflows, this time and cost- consuming approach may not be acceptable. Ofwat has already indicated that nature- based solutions will be a key tenet of PR24, but the legal reproach suggests that both the regulator and Defra will need to be more ambitious in what they ask of the sector and must provide support to allow companies to invest in sewerage. What to look out for A lot more discussion about how to deal with the damage caused by CSOs is surely on its way. The eagerly awaited Environment Bill will place a statutory requirement on companies to produce drainage and sewerage management plans as part of their duties to protect people and the environment. Philip Dunne MP created waves with his Sewage Bill, which although it did not ascend, did see key principles adopted into legislation to reduce discharges from overflows. Jackson: Octopus 'unrivalled on the global stage' Stay abreast of all the news, all of the time: www.utilityweek.co.uk What to look out for The moves by two of the biggest and most high profile energy suppliers to have emerged over the past decade comes amid a flurry of opinion polls showing that cus- tomers are increasingly keen to support genuinely green products but that they are confused about how to do the right thing. Their strategies will inevitably put pres- sure on other suppliers currently relying on REGOs and it is only fair to point out that many are already pursuing their own PPAs. Others may continue to point out that they are following the rules by using REGOs, and that the scheme does ultimately fund clean generation. This is a perfectly valid argument but while there may be nothing unethical about REGOs, there is no doubt that PPAs or a vertically integrated model such as Octo- pus's is a simpler message to communicate. supporting the industry and helping to drive down costs." What this means While still a significant strategic move, the

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