Utility Week

Utility Week 9th January 2015

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UTILITY WEEK | 9Th - 15Th JanUarY 2015 | 15 Policy & Regulation This week Offshore wind sector faces 2020 'cliff edge' MPs claim developers are put off investing by a lack of long-term certainty in government policy Investment in the offshore wind sector faces a "cliff edge" in 2020 due to government policy failing to provide long-term certainty and clarity, MPs have warned. Speaking in a Westminster Hall debate on Tuesday, politi- cians said the lack of long-term support is deterring offshore wind developers from investing in the UK. Shadow energy minister Julie Elliott said the government was giving out "mixed messages on energy policy and continuing uncertainty" by not providing a CfD budget into the next decade. She also accused the government of "acts of hostil- ity" against renewable energy – by cutting subsidies to solar and attacking onshore wind – and called for a cross-party consensus to be re-established. Conservative MP Peter Aldous partially supported Elliott, agreeing that long-term clarity was needed for the sector, which faces a "cliff edge" by 2020. He added that the £235 million allocated to less mature technolo- gies in the CfD auctions was "lower than expected" and "sent the wrong signals" to developers. The SNP's Eilidh Whiteford said the CfD allocation – £155 million for 2016/17 and £80 million for 2017/18 – has le developers "scrabbling around for the crumbs" and would prevent investors coming to the UK because there is not a "real chance" of them securing a CfD. Ben Wallace, assistant whip at the Treasury, defended the government, saying that while it does sup- port offshore wind, a balance has to be struck between providing subsidies and protecting consumers. MB EnErgY Miliband reaffirms pledges on energy Labour leader Ed Miliband reiterated his promise to reform the energy market to make it more "competitive" at a party rally. In a speech in Salford on Monday, he promised to reform the energy market to ensure the energy companies "operate in a competitive way". Miliband said a Labour gov- ernment would ensure energy suppliers "play by the rules" and his party would make sure there were "no more broken markets". The market reform the oppo- sition leader was alluding to was his 2013 party conference pledge to freeze energy prices while changes to the market – such as introducing a trading pool – were implemented. EnErgY Ukip to repeal 2050 Climate Change Act Ukip will repeal the Climate Change Act binding the UK to reduce carbon emissions by 80 per cent by 2050 if elected in the general election in May. In an interview with The Independent, Ukip MEP Roger Helmer, Ukip's industry spokes- man, described predicted rises in global temperature as "climate alarmism" and said the link between global temperature and atmospheric CO2 levels was "hugely open to question". He added that subsidies for green energy were an expensive waste of money that increased the cost of electricity production. EnErgY UK is 'unprepared for blackouts' The UK is not adequately prepared to cope with a severe and prolonged power blackout, according to an intergovernmen- tal report leaked last week. A government spokeswoman confirmed to Utility Week that the results of the study, known as Exercise Hopkinson, were leaked to the Telegraph news- paper, but declined to comment further on the findings. The Telegraph reported that the UK's contingency plans were not fit for purpose in the event of a prolonged blackout across the southwest of the country. A widespread blackout would take out key infrastructure, including Hinkley Point nuclear plant. Transport networks would be paralysed and emergency services would struggle to cope as fuel required to run back-up generators could be inaccessible. According to The Telegraph, a report of the findings distributed privately last month said "popu- lations are far less resilient now than they once were… there is likely to be a very rapid descent into public disorder". CfD budgets after 2018 have not been confirmed Political Agenda Mathew Beech "The big three may have to adopt other parties' policies" Happy general election year! But, with four months to go, energy and water have fallen off the political agenda. Yes, the opposition is continuing to call for reform of the industries, but it is being drowned out by more emotive and headline-grabbing subjects: an immigration crisis; an NHS crisis; a cost of living crisis; a constitutional crisis. Next to these, the energy and water industries have got lost – but not because nothing is happening. Ofwat has imposed trumpeting energy efficiency and a transition to renewable energy projects. It is also pushing for increased water sustainability. Ukip has proposed repealing the Climate Change Act, urged a fracking hurry-up and attacked – again – renewable energy. With the big three seeking to secure their voter base, they may look to adopt some of these par- ties' policies before the election, or they risk of having to imple- ment them aerwards in the form of coalition concessions. a strict price control for water companies, while Ofgem has put DNOs on meagre rations. Plus, if Ed Miliband gets his way, utilities will have to tighten their belts even further as caps, reforms and freezes are introduced. However, the Greens, the SNP and Ukip are gaining increas- ing influence in Westminster. In Scotland, the pro-renewables, anti-nuclear SNP is predicted to do significant damage to Labour. It could hold the balance of power in the House of Commons if it abandons its England-only abstention. The Green Party is chipping away at the socialist le and

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