Utility Week

Utility Week 10th January 2014

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

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Policy & Regulation This week Bradford Council takes legal action after cuts to funding force it to drop energy-from-waste project Council challenges government over EfW Bradford Council is taking the government to court over the shock withdrawal of infrastructure credits last February, which led the authority to shelve an energy-from-waste scheme. Bradford was one of three authorities hit by the cuts to support for meeting PFI payUK landfill targets on target anyway ments, which were worth a total of £200 million. Council leaders warned they would struggle to afford the projects without the support and unsuccessfully appealed to environment minister Lord de Mauley to reconsider. The Department for Environment, Food and Rural Affairs justified its decision to slash the funds by saying the UK could meet EU landfill targets without the projects. Ian Bairstow, Bradford Council's strategic director for environment and sport, said: "The council has been granted leave to challenge the government's decision by way of a judicial review. The council has suspended the project pending the outcome of the judicial review." Another of the affected schemes is going ahead despite the cut, however. Merseyside Waste Disposal Authority has awarded a £1 billion contract to a group led by Sita UK to handle waste recovery for 30 years. Sita UK is leading the building of an energy-fromwaste plant that will divert more than 92 per cent of residual waste in the region from landfill. The third affected scheme, led by North Yorkshire Council, is still under development, but contracts have yet to be awarded. MD water First look at open market proposals The ability for business customers in England to be able to choose their water supplier came a step closer this week, when initial market plans were published. The "Market Blueprint" outlines high-level design proposals for the Anglo-Scottish market, which is due to open in April 2017. This, the first output of the Open Water programme, sets out how to ensure there is a level playing field between incumbent water companies and new entrants, join up England's system with the existing Scottish market and reflect customer expectations. In Wales, only the biggest water users will be eligible to switch supplier, because the devolved government opted not to extend competition. Open Water programme director Keith Fowler said: "It is critical that we have a resilient sector, in which water companies are more efficient and customer focused and where water is appropriately valued." energy Competition audit to focus on five areas Ofgem will look at vertical integration and barriers to entry and expansion as part of its competition audit of the energy market, it said in a framework for the assessment published before Christmas. The regulator set out five categories on which it would focus. The other three are: "unilateral effects" arising from incumbents' former monopoly positions; weak competition between the big six; and weak customer response. nuclear 75GW upper limit for new nuclear The government is pondering a 75GW new-build nuclear programme, enough to provide almost 90 per cent of the UK's electricity requirement. The option to build 50 nuclear power stations emerged from a submission to the Department of Energy and Climate Change by government advisory body the Committee on R adioactive Waste Management (CRWM). In its response to Decc's consultation on the siting of nuclear waste disposal facilities, CRWM queried a Decc estimate of waste generated that was based on 16GW of new-build nuclear. It wrote: "16GWe is only the 'first tranche' figure and substantially below the 75GWe upper limit being examined in Decc. There is a need for clarity that any data given for, for example, 16GWe, are an example rather than either an expectation or a limit." Political Agenda Mathew Beech The new year has traditionally been when train fares rise and Labour blames the government for hitting the hard-pressed commuter. However, Caroline Flint was keen to grab the early January headlines and keep the pressure on the big six, Ofgem, and those of blue and yellow persuasion at Westminster. The shadow energy secretary accused the energy majors of ripping off customers to the tune of around £4 billion. "It looks like they have been deliberately inflating prices" Having examined figures from First Utility, Flint stated: "It now looks like they [the big six] have been deliberately inflating prices to boost profits." She even put a figure on how much the big six had overcharged households because they paid over the odds to themselves for their own power: £150. "The only way to get proper transparency is to stop energy companies selling power to themselves," Flint said. Ofgem was once again accused of failing consumers, as shadow energy minister Tom Greatrex repeated the party line that a "tough new regulator" was needed. However, Labour got return fire from the industry. Energy UK chief executive Angela Knight said the analysis contained "two fundamental errors". She said the big six wholesale price is not a "pure" price but contains "lots of other costs". She also said Labour had compared First Utility's prices with an average of the big six's costs. Regardless, it looks like the shadow Decc team will continue to grab the headlines in 2014 when it comes to energy prices. UTILITY WEEK | 10th - 16th January 2014 | 13

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