Utility Week

Utility Week 8th November 2013

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/206355

Contents of this Issue


Page 26 of 31

Markets & Trading This week Slough facility will help reduce phosphorus mining and prevent damage to treatment plants Thames pioneers sustainable fertiliser Thames Water on Tuesday unveiled Europe's first reactor to create phosphorus-based fertiliser from sewage. The UK uses 138,000 tonnes of phosphate fertiliser a year, all of it imported and most of it mined from non-renewable reserves. The price of phosphoPlant will produce phosphorus-based fertiliser rus has soared fivefold since 2007 and the reactor should provide a cheaper and more environmentally friendly alternative to mining. The £2 million nutrient-recovery reactor at Slough sewage works will produce 150 tonnes of sanitised fertiliser a year. It should save the company up to £200,000 a year by preventing struvite crystals clogging up pipes. If the reactor is successful, Thames Water will install the technology at other plants. Peter Melchett, policy director at the Soil Association, said: "With the world's affordable mineable reserves of phosphorous set to start running out in the next 20 to 30 years, this new technology could offer a solution to securing global food supplies over the coming decades." The fertiliser produced at the facility is cleaner than mined phosphate because it contains fewer heavy metals and its formation produces no radioactive by-products. Thames Water commercial director Piers Clark said: "We are producing eco-friendly steroids for plants, while tackling the costly problem of struvite fouling pipes at our works. The cash and carbon cost of digging phosphate out of the ground in a far-flung foreign clime then shipping it to Britain makes no sense compared with the local, sustainable process of our reactor in Slough." CM Energy PwC: we are blowing the carbon budget Leading industrial countries are "consuming fossil fuels like there's no tomorrow" and are on course to blow the 2100 carbon budget in a quarter of the period, according to consultancy PwC. PwC's annual low-carbon economy index shows that the 89-year emissions budget set by the Intergovernmental Panel on Climate Change to curb global warming at 2°C will be used up in 21 years at the current rate of carbon release. PwC calculates that the rate of global decarbonisation, which has been 0.7 per cent a year for the past five years, should be eight times faster. PwC director Jonathan Grant said: "G20 countries are still consuming fossil fuels like there's no tomorrow. Despite rapid growth in renewables, they still remain a small part of the energy mix and are overwhelmed by the increase in the use of coal." Energy Ofgem launches transparency drive Ofgem is consulting on how to make energy company profit information clearer to a "suspicious" public. The regulator wants firms to publish their annual statements sooner after the year end, having completed a full financial audit. It is considering options such as requiring companies to publish more information about their trading activities, to estimate their return on capital employed (as a "more meaningful measure of profitability for generation businesses" than return on revenue) and to review the way they allocate revenues and costs between generation and supply businesses. Ofgem is also inviting views on how it could improve its own annual review of energy company statements. Explaining the reasons for the review, the consultation summary said: "For the third year in a row, consumers are facing large increases in their electricity and gas bills. Energy suppliers have blamed increases in costs as the cause of these price rises and have rejected claims of profiteering. Understandably, consumers are suspicious about these explanations and are looking for independent verification of whether or not these price increases are fair." However, it noted there can be costs to transparency and said interventions must be "proportionate" and not reveal commercially sensitive information that could impede competition. The document said: "This is not about publishing ever more information. It is about providing robust and meaningful information in a way that can be clearly understood." Open market Professor Catherine Waddams Last week the prime minister announced two measures in response to the latest increases in energy prices. He promised an annual review of competition in the market and to "roll back some of the green regulations and charges that are pushing up bills". An inquiry by competition authorities should be welcomed, but the proposed measures raise some serious concerns. The good news is that at last someone is suggesting that the competition authorities with "The UK competition regime is independent of political parties" expertise in such inquiries should decide whether there are competition issues in the energy market, or whether the rising prices are, as the companies say, a result of rising energy costs. The bad news is that it is highly unusual and a matter of some concern that the government is deciding which markets should be referred for such an inquiry. It is very dangerous if governments decide which markets should be investigated. One of the great benefits and strengths of the UK competition regime is that it is independent of political parties that, as we have seen, have tended to provide short-term solutions that often cause more problems than they solve. One reason this is important is that the companies have security against government interference so they can raise capital with lower risk and cost to consumers. If lenders expect companies to be subject to repeated government intervention it is consumers who will pay in the long run. Professor Catherine Waddams, Centre for Competition Policy, University of East Anglia UTILITY WEEK | 8th - 14th November 2013 | 27

Articles in this issue

Archives of this issue

view archives of Utility Week - Utility Week 8th November 2013