Utility Week

The Month in Review Brearley Pinchbeck 6 | OCTOBER 2022 | UTILITY WEEK "Now we have an immediate solution for households the energy industry needs to lead a three-pronged attack to tackle the issue at source by weaning the country off fossil fuels, doubling down on cheap, clean renewables and, importantly, decoupling electricity prices from gas." Keith Anderson, chief executive, Scottish Power, on the Energy Price Guarantee announcement. The Month in Review N ew prime minister Liz Truss's announcement of an Energy Price Guarantee was widely praised as a bold move to support vulnerable customers this winter, despite warnings that many will still su• er. The scheme sees the unit price of elec- tricity and gas capped, with the government covering the shortfall between that and the wholesale price of power. The announcement, which was made on 8 September, also included plans to cut wholesale electricity costs by moving nuclear and renewable generators on to Contracts for Di• erence when the next auc- tions are held (see analysis, p11). The prime minister also revealed that the government is o• ering a £40 billion package of loans to support the liquidity of compa- nies trading on the wholesale market. She additionally used her statement in the House of Commons to announce twin reviews of energy regulation and of the UK's delivery strategy for net zero to ensure it is "pro-growth". The various measures included in the package are explored in depth across pages 8 to 11. Shortly before Utility Week went to press, the government also issued more details on the price freeze for business customers. The Department for Business, Energy and Industrial Strategy (BEIS) said the Energy Bill Relief Scheme will provide a discount on wholesale electricity and gas Truss confi rms freeze onthe price of energy Utilities sector pays tribute to the Queen The utilities sector paid trib- ute to Queen Elizabeth II, died aged 96, on 8 September. David Smith, chief execu- tive of Energy Networks Asso- ciation, said: "It is with great sorrow that today we learned of the death of Her Majesty, Queen Elizabeth II. On behalf of the United Kingdom's energy network operators, we send our deepest sympathies to the Royal Family at this sad time." A spokesperson for Energy UK said: "We are deeply sad- dened by the passing of Her Majesty The Queen. The thoughts of Energy UK and our members are with the Royal Family at this time." A spokesperson for Water UK said: "Everyone in the water industry is deeply sad- dened by the death of Her Majesty the Queen and our sincerest condolences go to the Royal Family. "Like the rest of the nation we pay tribute to, and give thanks for, her decades of dedicated public service." Ellen Bennett, Utility Week portfolio director, said: "We are saddened to learn of the passing of Queen Elizabeth II. Her Majesty was an inspi- ration to people the world over. Our deepest sympathies and condolences go out to the Royal Family as we give thanks for the selŸ ess contri- bution of our country's long- est-serving monarch." prices for businesses, public sector organisa- tions and charities over the next six months. The scheme will automatically apply to contracts agreed on or a¡ er 1 April 2022 and to usage in the six months from 1 October. It will target a "supported wholesale price", expected to be £211/MWh for electric- ity and £75/MWh for gas. BEIS said these rates are less than half of the wholesale prices expected this winter and represent equivalent levels of support to the recently announced Energy Price Guarantee for households. The discounts will vary according to contract type and circumstances. Those on existing ¦ xed price contracts will be eligible for support as long as the contract was agreed on or a¡ er 1 April 2022 and provided the wholesale element of the bill is above the supported wholesale price. Those entering new ¦ xed contracts a¡ er 1§October will receive support on the same basis. Default, deemed or variable tari• cus- tomers will receive a per-unit discount on costs, up to a maximum of the di• erence between the supported price and the average expected wholesale price over the six month period. BEIS said the amount of the maximum discount is "likely to be around £405/MWh for electricity and £115/MWh for gas", sub- ject to wholesale market developments. For businesses which consume the largest amounts of energy, likely to be on Ÿ exible purchase contracts, the level of reduction o• ered will be calculated by suppliers according to the speci¦ cs of that company's contract and will also be subject to the maximum discount. David Blackman, policy correspondent 8 to 11. Shortly before Utility Week press, the government also issued more details on the price freeze for business customers. The Department for Business, Energy and Industrial Strategy (BEIS) said the Energy Bill Relief Scheme will provide a discount on

• Cover