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UTILITY Week 16 05 14

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UTILITY WEEK | 16Th - 22nd MaY 2014 | 13 Policy & Regulation Political Agenda Mathew Beech "Retail exit is a step closer in the Water Bill's 11th hour" "We will not bow to pressure," cried the government as the Water Bill made its way through the House of Commons at the tail end of 2013 and in the early light of 2014. Water minister Dan Roger- son even told the Commons at the report stage that making provision for retail exit in the non-domestic sector "risks being a bad outcome for household customers" – and once again rejected the idea. Even as the Bill crawled Labour shadow water minis- ter Angela Smith criticised the government for dragging its feet, meaning the provisions could not receive "adequate scrutiny". A consultation will be launched on how retail exit will work, bringing it a step closer just before the legislative door slams shut. However, the amendment is only an enabling power, mean- ing the government has yet to set out exactly how retail exit will look. through the House of Lords, the government stubbornly stuck to its guns that the Bill it had draed was the Bill it wanted, and calls for legislation to allow voluntary retail exit were shot down. That should have been that. However, at the 11th hour – the third reading in the House of Lords – the amendment was finally accepted by peers. As ping-pong saw the Bill return to a virtually empty Com- mons, a grand total of four MPs debated the amendments made in the Lords. Retail exit was then written into the Bill and accepted by MPs – although Rogerson was keen to point out that the amend- ments "are enabling only". This week Subsidies to be cut for solar projects decc to close the Renewables Obligation regime to solar farms exceeding 5MW from 1 april 2015 The photovoltaic (PV) sector's subsidy cut fears were realised on Tuesday in a ra of announce- ments on renewable policy. In a move that will inhibit the growth of controversial solar farms, the Department of Energy and Climate Change (Decc) is closing the Renewables Obliga- tion regime to solar projects over 5MW from 1 April 2015. Developers will instead be forced to compete for contracts for difference (CfDs). For smaller-scale solar projects, feed-in tariff (FIT) rates will be cut faster for ground-mounted than roof-mounted panels. Explaining the policy change, Decc said large-scale solar was deploying "much faster than we expected". Industry projections show it exceeding the 4GW deemed "affordable" by 2017. The Solar Trade Association criticised the proposals as an "own goal", however, saying they would disrupt efforts to reduce costs in the industry. Decc also published details of the budget split for renewable CfDs. Onshore wind, large-scale solar PV, energy from waste, mid-scale hydro and landfill and sewage gas were confirmed as "established" technolo- gies. That means they will have to compete in auctions for subsidy from day one. Offshore wind, marine, anaerobic digestion, dedi- cated biomass with combined heat and power (CHP), geothermal and advanced conversion technologies are considered "less established". This means developers are expected to receive the administrative strike price first, before moving towards competition. MD ELEcTRIcITY New nuclear 'should be in CfD auctions' New nuclear power stations should be included in the con- tracts for difference (CfD) reverse auctions, according to a leading think tank. A report by Centre Forum said new nuclear was a "mature tech- nology" and therefore should be included in a CfD reverse auc- tion. It claimed this would help "ensure value for money" for UK electricity customers. The report added that this would have helped to increase competition for the development of the technology, which would have made it easier to show the strike price, of £92.50/MWh, represented value for money. Centre Forum also said gov- ernment procurement and opera- tion of a new nuclear plant, via an arms-length organisation, could have saved £12.4 billion over the 35 years, either by developing the project itself, or by providing competition to EDF. WaTER MPs accept changes to 'flawed' Bill MPs in the House of Commons have accepted peers' amend- ments to the Water Bill, despite claims from Labour that it remains "seriously flawed". Shadow water minister Angela Smith said the Water Bill was a "missed opportunity" for the government to introduce a "national affordability scheme" and set a UK-wide standard for social tariffs. Despite this, Labour MPs supported the amendments, including provisions for retail exit in the non-domestic market. Water minister Dan Rogerson said Defra would launch a full public consultation to establish the regulations for voluntary retail exit. See Political Agenda, below. Pan-UTILITY Stolen metal rules move trade overseas A crackdown on the sale of stolen metal in England and Wales has driven the illegal trade overseas, victims told MPs last week. While tighter regulations on scrap metal dealing introduced last year have helped reduce the problem, they have not stopped criminals exporting stolen metal, industry representatives said. Copper wires and manhole covers are common targets, and raids on electrical substations or water treatment works can have dangerous consequences. Discussing the problem at an all-party Parliamentary group, Energy Networks Association policy director Tony Glover high- lighted a rise in metal trading across the Scottish border. Scotland is due to bring its legislation in line with the rest of the UK aer its referendum. Controversial: large solar farms growing too fast

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