Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/453358
UTILITY WEEK | 16Th - 22nd JanUarY 2015 | 9 Policy & Regulation This week Capacity market may change to boost DSR Energy minister tells MPs there may be changes to the capacity market before the next auction Changes could be made to the capacity market to give demand- side response (DSR) measures a boost in future auctions, the energy minister has suggested to the Energy and Climate Change select committee. Giving evidence to MPs on Tuesday morning, Matthew Hancock said "there could be changes" made to the capacity market auctions over the summer ahead of the next auction later this year. He told MPs that the Department of Energy and Climate Change (Decc) has had "extensive discussions with the DSR fraternity" and that the concerns raised – including the length of the contracts available to DSR measures in the capacity auctions – "will be part of the review over the summer". Hancock added: "We are going to look at the make- up of DSR that has been successful and DSR that bid [in the capacity auction]. If there are technical changes that are needed, of course we will consider making them." The energy minister refused to rule out the inclu- sion of "diesel farms" as a form of DSR that can bid into future capacity auctions. Hancock also rejected calls from groups including the Renewable Energy Association for more frequent capa- city auctions, saying a single auction a year would allow them to be "liquid enough to get the best possible value for money". He accepted that more auctions could help independent generators, but said if the capacity market was "too burdensome" they should seek subsidies under the feed-in tariff regime "designed for small players". MB Gas No fracking near aquifers, says Labour Labour is seeking to ban frack- ing from taking place on land close to drinking water aquifers. The opposition has tabled an amendment to the Infrastructure Bill that would prohibit shale gas extraction in groundwater protection zones. This was due to be debated in the House of Com- mons on Tuesday (13 January). Shadow energy minister Tom Greatrex said: "Despite clear flaws in the existing framework, David Cameron's government have repeatedly sidelined genu- ine and legitimate environmen- tal concern and seem prepared to accept shale gas at any cost." Other amendments tabled by Labour include requiring shale gas operators to individually inform residents of activity rather than publishing a generic notice. EnErGY Network is 'feeling the strain', MPs told The Energy Networks Asso- ciation (ENA) director of policy, Tony Glover, told the Environ- mental Audit Committee (EAC) that areas of the UK distribution network are already "at satura- tion point" due to greater use of microgeneration such as solar panels by smaller businesses – encouraged by government. The comment came in response to The Federation of Small Businesses' Allen Creedy, chairman of the environmental and policy unit, saying there is a growing desire by micro-busi- nesses in remote areas to gener- ate heat and power for their own needs and where possible sell it back to the national grid. Creedy said this was spurred by "inequitable access to the grid, excessive pricing, a lack of transparency and a lack of com- petition" in the energy industry. WaTEr Connection guidance 'anti-competitive' The government's service stand- ard guidelines for connecting new developments to the water mains are "anti-competitive", according to the self-lay organisation (SLO) group Fair Water Connections. Fair Water Connections man- aging director Martyn Speight told Utility Week a double stand- ard in the government's guide- lines was "anti-competitive". He said the government's Better Connected document compels water companies to connect new developments to the water mains within 90 days, but no such deadline existed when completing connections for self- lay companies. This meant SLOs were prevented from offering developments the same guar- antees for water connections as the incumbent water companies they compete with. Blue sky thinking: auctions could change Political Agenda Mathew Beech "If the Greens are included, Cameron's excuse has gone" The TV debate argument could reveal just how clever the Con- servatives and David Cameron are being. The prime minister said he will not take part in any televised debate unless the Green Party – which despite polling more than the Lib Dems is not considered a major party because it has only one MP – is included. At face value, Cameron's calls for Green leader Natalie Bennett to join the Tories, Labour, the Lib Dems and Ukip – which is but now that an ultimatum has been issued, if the Greens are included, his excuse has gone. And should we see a five-way debate, the Greens may trump the Tories and their "greenest government ever" claims on the environmental front. Cue Green shouts of fossil fuel subsidies, expensive nuclear, onshore wind blocking, and fracking pollution. Cameron has a high risk, but potentially a high reward, strategy. One that could mean he keeps the keys to Number 10. now considered a major party because it has two MPs – seem valiant. A cry for inclusivity. However, knowing that Ukip is hunting Tory votes, that Ed Miliband is an accomplished orator, and Nick Clegg's 2010 performance took him into gov- ernment, the PM's motives are more likely less noble. The Greens are likely to trump Labour on the le and the Lib Dems on the environment. Plus, having them involved will limit the time Nigel Farage gets on camera to outflank the Tories on the right. It'd be a win-win. But this is a gamble. Not only does Cameron face calls of cowardice for backing out,