Utility Week

Utility Week 22nd November 2013

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

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Page 12 of 31

Policy & Regulation This week Lib Dem pressure likely to save energy efficiency Pan-utility UK Guarantees back scheme, but costs will be moved from bills only one project Eco costs to be moved into general taxation Funding for the Energy Company Obligation (Eco) is set to be moved into general taxation in the chancellor's Autumn Statement on 5 December, Utility Week understands. Sources close to ministers said the Liberal Democrats want the costs of Eco included Energy efficiency: work will be expanded in general taxation, while the Conservatives favour extending the Eco deadline. George Osborne is likely to announce a compromise between the two, while the types of energy efficiency measures eligible under Eco are set to be increased as the government attempts to "reduce the burden" on consumers. The Department of Energy and Climate Change (Decc) would confirm only that the government was "looking closely" at the impact of green levies on consumer bills and that the details of the review would "provide clarity for long-term decision making" for the industry. Former energy minister Chris Huhne has defended support for renewables ahead of the government's review and said it would be a "folly" for this to be cut. Speaking ahead of the Anaerobic Digestion and Biogas Association national conference, he said subsidies for renewable generation made up just 4 per cent of an average household bill, "nowhere near a significant enough percentage to be the root cause of the sharp price rises of electricity and gas". He said the levies on energy bills used to support renewables should remain because they "are the best way to insulate ourselves against the long run trend of rising gas prices". MB A scheme intended to tackle delays to infrastructure investment has supported just one project in its first year, the latest Treasury data reveals. Of a potential £40 illion b worth of UK Guarantees, designed to help developers attract credit, less than 0.2 per cent has been allocated since legislation was passed in October 2012. Nothing has been signed since Drax secured a £75 million guarantee in April for its biomass conversion project. A further 20 projects, of which half are in the energy sector, have "pre-qualified" for support and a Treasury spokeswoman insisted the industry was "very positive" about the scheme. However, critics say that far from addressing market failure, Infrastructure UK is only backing projects that are already commercially bankable. Labour shadow energy minister Tom Greatrex said there were "serious questions to be raised" about how the guarantees were allocated. Electricity Communities to get say over windfarms Proposals for new onshore windfarms will have to be seen by local communities before a formal planning application is submitted, under new rules set out by the government that are due to come into force before the end of the year. The new measures will mean developers planning a windfarm with more than two turbines, or an installation with a turbine taller than 15m, will have to consult the local community before submitting a formal planning application. Communities secretary Eric Pickles said: "From day one, communities should be centre stage in crafting plans that affect their lives instead of having them forced upon them." Water WWF wants Bill to include abstraction WWF has expressed concerns that abstraction reform has been "put on the back burner" ahead of the second Water Bill reading, widely expected to take place early next week. The government included an abstraction reform clause in the Water Bill White Paper, but omitted it from the Bill when it was published this summer. Rose O'Neill, corporate stewardship manager of UK freshwater policy at WWF-UK, said: "It is something that successive governments have been talking about doing for decades. There is no reason why enabling legislation cannot be brought forward in this Bill." Political Agenda Mathew Beech The battle of wills between the Houses at the Palace of Westminster is about to get under way. The Commons and the Lords are warming up for a game of Energy Bill "ping-pong". Peers are determined to introduce either a decarbonisation target – as pushed by Labour's Baroness Worthington – or the amendment to the Bill to set tougher limits on coal generation, which was passed by 237 votes to 193 in the House of Lords. "The Energy Bill warms up for 'ping-pong'" Energy minister Michael Fallon took to the House of C ommons at the start of the week to obtain a carry-over extension from Parliament, as an insurance policy against the possibility the Bill will bounce between the Commons and the Lords. The extension means the Bill now has until 27 February 2014 to gain Royal Assent, although Fallon is confident this extra time won't be needed. In a w arning to the Lords not to delay the Bill for too long, he said: "Fundamentally, it is vital for securing the UK's energy future and ensuring that the crucial investment in energy infrastruc- ture that we need over the next decade comes forward." His opposite number Tom Greatrex echoed the sentiment that it "is an important, muchdelayed and much-needed Bill", although Labour only supports it with reservations – namely, when a decarbonisation target should be set. So the finishing line is in sight but there is still some work left to do to get the Energy Bill into the statue book – especially if Labour's peers have their way. UTILITY WEEK | 22nd - 28th November 2013 | 13

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