UTILITY WEEK | MAY 2021 |
5
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Change comes at a cost
The past month has seen signi cant pressure piled on the utilities sector to
make progress in key areas.
The urry of net-zero announcements released ahead of COP26 made clear
that the ball is now in the industry's court to develop the solutions and drive
down costs in key areas of the decarbonisation agenda, most notably heat.
Meanwhile, the Environment Bill, while toned down from earlier dra€ s, sent
a clear message to water companies that they must tackle the issue of pollution
spills through sewer over ows as well as bringing forward further measures to
protect the nation's waterways.
The water sector's role in cutting its own emissions was also an important
thread of COP26, even if it did not perhaps get the attention it deserves. The
thorny topic of dealing with process emissions, a regular feature in these pages,
was widely debated and calls for action reiterated.
As we have been at pains to point out previously, the utilities sector stands
ready to play its important role in tackling these issues. But it cannot do this
alone. There is a clear need for government and regulators to explain how these
projects will be funded and how investors can get a line of sight on long-term
strategies.
It is clear that government will have to play its part, particularly around sup-
porting novel technologies and allowing utilities to innovate. This is not a new
message and Boris Johnson's administration has made encouraging steps over
the past month, including the £1.7 billion committed for bringing new nuclear
on line.
It has also pledged funds to support customers aŠ ected by the turmoil in
the energy retail sector, although this was a reactive move prompted by the
absorption of Bulb into the special administration regime, at a cost of at least
£1.7 billion. As we set out as part of our Energy Reset campaign, there are calls
for government to go further in order to ease the bill shock currently inevitable
when the price cap next rises.
All of these gures are dwarfed by the potential cost of dealing with com-
bined sewer over ows. While the £600 billion gure that has been quoted would
involve the drastic step of completely separating wastewater and storm water
systems, even the most conservative pledge of reducing spills to 10 or fewer
instances a year in sensitive catchments (such as chalk streams) would cost
between £18 billion and £110 billion.
There is an understandable zeal from the public to clean up our waterways,
decarbonise the economy and sort out the energy retail market. But there is little
attempt to oŠ er context around how endishly di• cult this will be, and how
much it will cost. There are no easy solutions to these problems so it is in no-
one's interest to pretend there are.
James Wallin, editor, jameswallin@fav-house.com
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Letter from the Editor
James Wallin
