Utility Week

Utility Week 6th December

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Page 12 of 31

Policy & Regulation This week Open letter to EU competition commissioner calls for investigation into subsidy for new nuclear Commissioner urged to reject nuclear deal More than 100 politicians, industry experts and green energy campaigners are calling on the European Commission to reject public financial support for new nuclear power plants. There is "no valid justification for subsidising nuclear power", they argue in an open Hinkley C: Commission said to be sceptical letter to Joaquin Almunia, EU Commissioner for Competition. "It diverts resources from other options that are better and cheaper." The coalition urges Almunia to investigate concerns with the support package proposed for EDF Energy's Hinkley Point C. Labour MP Martin Caton tops the list of signatories, followed by Plaid Cymru MEP Jill Evans and Green MP Caroline Lucas. Dale Vince, founder of renewable energy supplier Ecotricity, and Andrew W arren, director of the Association for the Conservation of Energy, have also endorsed the message. The open letter follows reports the Commission may be reluctant to give state aid approval to the UK government's deal with EDF for Hinkley Point C. The first new nuclear plant in a generation, Hinkley is to get an inflation-linked "strike price" of £92.50/MWh for 35 years and a £10 billion loan guarantee. There is understood to be scepticism within the Commission of the need for such significant levels of support for what is a mature and controversial technology. Almunia's directorate is expected to give an initial verdict on the UK's Electricity Market Reform programme, including the Hinkley deal, in January. The final decision must be approved by a majority of commissioners. MD Energy Decc to fight single amendment to Bill The government was preparing to push back against tighter curbs on coal power generation when the Energy Bill returns to the Commons on Wednesday, as Utility Week went to press. The Bill emerged unscathed from the House of Lords apart from an amendment to limit the running hours of old coal plants. A spokesman for the Department of Energy and Climate Change said the amendment was unnecessary and "could risk unintended consequences". The addition extends the Emissions Performance Standard to existing coal plants that undergo "significant upgrades". The restriction would make it less worthwhile for coal generators to invest in the NOx abatement kit that will allow them to stay open beyond 2023. Steve Riley, chief executive at independent generator GDF Suez Energy UK-Europe, said a restriction could harm security of supply. "We understand the need for decarbonisation, but believe coal can continue to play an important role," he said. Water Ofwat warns against 'licence to build' The new duty of resilience for Ofwat proposed in the Water Bill could be seen by companies as a "licence to build", chief executive Cathryn Ross told the Public Bill Committee on Tuesday. Ross, in her first public appearance in post, said the new duty could undermine the regulator's efforts to steer companies away from focusing on capital expenditure. She said: "Our concern is that a resilience duty might lead to a conversation that was concentrated on capital investment. This might be seen by companies in particular as a licence to build, which is precisely what we have been trying to move away from." Ross said a new duty was unnecessary because Ofwat was already taking steps to ensure water companies were resilient. RENEWABLES Review of anaerobic digestion FIT slated A review of the feed-in tariff (FIT) for small-scale anaerobic digestion (AD) plants has been confirmed by the government. Climate change minister Greg Barker has confirmed in a letter that the government will "consult on measures, including a tariff review" in January. The review comes after "unintended consequences" of the FITs degression model for AD has resulted in larger plants contributing towards the trigger point – after which the FIT will fall by 20 per cent. Political Agenda Mathew Beech The battle for the high ground in the energy bills debate has continued with the Tories and Lib Dems fighting back. The coalition is offering bill payers £50 off their energy bills this winter, after lengthy discussions with the suppliers to ensure the savings are passed through. The cut – which is "not a reaction" to Ed Miliband's price pledge, according to energy minister Michael Fallon – comes as the Energy Company Obligation (Eco) has undergone a shake- "The cut is 'not a reaction' to Ed Miliband's price pledge" down. Almost a year after the energy efficiency scheme came in, the Department of Energy and Climate Change has decided now is the right time to "streamline" it to target the fuel poor and more vulnerable households. At the same time, the Warm Home Discount has been moved into general taxation. The net result is that energy bills will have gone up by slightly less than the suppliers originally said. Also, to celebrate the £12 rebate, ministers are said to have asked suppliers to make a note on bills that the reduction has come directly from the government. The coalition's message is that it is helping to reduce bills now, while Labour's "con" of a price freeze is still two years away. With the coalition ghting fi back, and a sense that the #Freezethatbill campaign had lost momentum, shadow energy secretary Caroline Flint tried to regain impetus in the debate, saying the government had let the big six off "scot-free" with its reforms. She said David Cameron and Nick Clegg were "wrong" to do "what the energy companies ask of them", adding that bills are still going up for consumers. UTILITY WEEK | 6th - 12th December 2013 | 13

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