Utility Week

UTILITY Week 5th September 2014

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UTILITY WEEK | 5TH - 11TH SEPTEMBER 2014 | 13 Policy & Regulation This week Annual DSR auctions will 'represent value' Annual auctions for demand-side response will ensure the best value for money, MPs are told The decision by the Department of Energy and Climate Change (Decc) to hold annual auctions for demand-side response (DSR) measures in the capacity mecha- nism will ensure the best value for money for billpayers and taxpayers, MPs have been told. Appearing in front of the Energy and Climate Change select committee, energy minister Matthew Hancock dismissed fears that annual auctions beginning in December would stunt the development of the DSR sec- tor. He said the yearly contracts would allow the sector to "flourish" while ensuring the best value for money for consumers and the taxpayer. Hancock told the committee: "We have to see this as a technology that is maturing rather than the finished article, and we've got to drive value for bill payers." He added: "We have put in place transition arrange- ments to support and encourage the DSR market to get it moving before the capacity market comes in in full." Despite Hancock's reassurances, there remain con- cerns in the sector that annual contracts will hamper the industry's growth. Yoav Zingher, co-founder of demand- side management company Kiwi Power, told the commit- tee that, while the capacity market was a "great place" for DSR, it would "remain marginal" without support. He said: "At the moment, power stations can get long- time contracts but DSR is the only kind of asset that can only get one-year contracts. That's quite a big disincen- tive for businesses to invest and for customers to partici- pate not knowing what will happen year on year." MB ELECTRICITY Lib Dems pledge to ban unabated coal The Liberal Democrats have pledged to ban electricity genera- tion from unabated coal in their 2015 general election manifesto. The junior coalition partner has stated that its manifesto will include plans for five new laws to protect the environment. The party would introduce a "Zero Carbon Britain Bill", which would introduce a decar- bonisation target for electricity generation, expand the powers of the Green Investment Bank, and ban electricity generation from unabated coal. Alongside this are pledges to introduce a "Heating and Energy Efficiency Bill", which would create a national programme to raise the energy efficiency stand- ards of all Britain's households; a "Green Transport Bill", which would only allow low-emission vehicles on the roads from 2040; a "Nature Bill", which would set legal targets for biodiversity, clean air, clean water and access to green space; and a "Zero Waste Bill". ENERGY CMA panel member has £50k in shares One member of the Competition and Market Authority's (CMA) energy panel has about £50,000 worth of energy shares. The CMA's disclosure document revealed that Lesley Ainsworth has 565 shares in Royal Dutch Shell and 51,250 units in Foresight Venture Capital Trust, which focuses on investing in solar energy projects. The CMA said it did not believe the interests of those sitting on the panel would preju- dice its impartial investigation. The CMA also revealed that fellow panel member Roger Wit- comb was a non-executive board member of small energy supplier Utilita between 2005 and 2009. Two members of CMA staff are also named as having previously worked in the energy sector. ENERGY Election priority call for decarbonisation A group of ten charities has called on the UK's political parties to make setting a 2030 decarbonisation target a general election priority. The organisations, which include Greenpeace, WWF and the National Trust, have called on the major political parties to commit in the 2015 general election manifestos to setting a 2030 decarbonisation target of 50gCO2/kWh. A document published by the charities stated: "Decarbonis- ing the power sector would be £23 billion cheaper to consum- ers, compared to increased dependency on gas generation." Hancock: 'We've got to drive value for billpayers' Political Agenda Mathew Beech "Will the Tories look to adopt more Ukip policies?" Douglas Carswell is a name that, up until last week at least, would have meant nothing to most people. Then came Ukip's grand unveiling. The Eurosceptic (former) Tory backbencher had defected and was planning to stand at a by-election in his Clacton constituency – the seat he held as the incumbent Con- servative member of Parliament. Ukip leader Nigel Farage crowed that this was the start of a shi in politics, with the party something similarly jingoistic. But with so much time and effort, and even more money, spent on slowly embracing low- carbon technology, bending to Ukip on this may be a compro- mise too far. Much more likely is a tougher stance on immigration and UK border controls. And how long will it be before Farage vocally joins the cheaper bills for hardworking British families debate, and demands cheap (ie coal) energy sources are used? hoping to secure more disillu- sioned Tory backbenchers. David Cameron, who has been seen as tolerating those to the far right of his party by promising an in/out referendum on Europe in 2017, said the defection was self-defeating – and wanted to appear unruffled by the incident. But if the rumours of further defections are true, will the Tories lean further to the right, and look to adopt some more Ukip policies to appease those vocal dissenters? A disregarding of European regulation, as Farage's party would favour, could see the UK rely on "cheap" coal – British coal for British power, or

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