Utility Week

16 | OCTOBER 2021 | UTILITY WEEK Policy & Regulation Talking Points… "If you look at the way interconnectors are going, we are now at the back of the queue thanks to Brexit and we were at the front of the queue." Sir Ed Davey, Liberal Democrat leader "If nuclear is cheap enough, you shouldn't exclude it. Certainly, within a system it is good to have diversity but you don't need it and it now has to depend on price. My own gut feeling is that new nuclear will play a relatively small part in the UK system." Lord Turner, former chair of the Climate Change Committee "We're talking about real transformation where how the sector solves problems now could seem alien to us in 30 years' time. Some of that will come at a cost, which is exactly why a long-term strategy is needed to identify the best strategies over longer period and to sequence key investments at the right times and spread the costs fairly between current and future generations." Aileen Armstrong, senior director, Ofgem Quote, unquote New energy minister seen as safe pair of Hands Comment David Blackman Policy correspondent T he third energy minister in nine months was unveiled in September, with Greg Hands taking over from Anne- Marie Trevelyan's as minister of state for energy, as she returned to the Cabinet. The appointment of the west London MP was greeted with less disquiet in the sector than that of his predecessor. While she had made her political name campaigning against wind farms in her rural Northumberland constituency, e€ orts to tackle climate change are close to Hands' heart. In 2018, he resigned from the government to vote against the expansion of Heathrow Airport, unlike then foreign secretary Boris Johnson who famously made a 24-hour trip to Kabul in order to ensure he was out of the UK when it took place. Hands' vote was no doubt partially motivated by the need to keep the voters sweet in his Chelsea and Fulham constitu- ency, which is under the airport ' ightpath. However, the 55-year-old's interest in environmental matters extends beyond this constituency single issue. In 2019, during his spell on the backbenches following the Heathrow vote, he wrote to then energy minister Kwasi Kwarteng expressing concern that the UK was not on course to meet the emission reductions targets in its fourth and " • h carbon budgets. Kwarteng is now his boss, having retained his role as secretary of state for business and energy. During his two spells as minister in the Department for International Trade, which he returned to a• er the 2019 elec- tion, Hands can also point to work he has done on boosting UK o€ shore wind. A• er ascending to the Cabinet as chief secretary to the Treasury and e€ ectively then- chancellor George Osborne's right-hand man, Hands was demoted when Theresa May became prime minister but clung on to a ministerial role at the DIT. Having a seasoned hand in BEIS will be handy as the UK grapples with the closest thing it has had to an energy crisis since the early 1970s. The main concern for Hands' predecessors has been how to manage the transition to net zero. However, unlike them, he also has to contend with spiral- ling wholesale energy prices and an increasingly fragile supplier market. Both of these factors are likely to mean further pressure on the energy price cap. Meanwhile, the run-up to the COP26 means Hands cannot a€ ord to take his eye o€ the decarbonisation ball. Against the backdrop of rising energy bills, the biggest single item on his to-do list will be the publication of the govern- ment's long-delayed heat and buildings strategy. The timing of this key document is looking less auspicious as the days go by. The news in numbers: The government has revealed details of the fourth round of the con- tracts for di erence scheme, including its £265m budget. Here's how the subsidies will be allocated: Pot 1. Established technologies (includes onshore wind, solar and hydropower): • £10 million pot • Cap of 5GW on total capacity • Maximum capacity limits of 3.5GW imposed on both onshore wind and solar PV Pot 2. Less-estab- lished technologies (includes floating o shore wind, tidal stream, geothermal and Wave): • £55m pot • No capacity cap imposed • £24m ring- fenced support for floating o shore wind Pot 3. O shore wind: • £200m pot • No capacity cap

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