Utility Week

UTILITY Week 16th October 2015

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8 | 16TH - 22ND OCTOBER 2015 | UTILITY WEEK Policy & Regulation This week Government softens blow to onshore wind Industry says changes to Renewables Obligation scheme closure may restore investor confidence The government has soened its stance on the closure of the Renewables Obligation (RO) support scheme to allow almost 3GW of onshore wind capacity to move forward through an amended grace period. The government originally offered the grace period to those projects with planning permission, a grid connection and land rights. This, the government estimated, would allow 2.9GW of capacity to move ahead. But the govern- ment is now offering an extra nine months to projects that have struggled to secure financing to achieve the same total. Projects will have to demonstrate that they had plan- ning consent on 18 June, that they successfully appealed against a planning refusal made on or before 18 June, or that they successfully appealed aer not receiving a plan- ning decision due by 18 June. Also, they must demon- strate that they have struggled to secure finance. Industry groups said the government's admission that investor confidence has been damaged, and should be allowed time to recover, will help improve trust in the sector. "It is clear that government has sought to address some unintended consequences of the decision to close the RO," said Michael Rieley senior policy manager for Scottish Renewables. Renewable UK's deputy chief executive also wel- comed the government's acknowledgement of "the financial uncertainty caused by these changes" and said the extra time "will help rebuild investor certainty". JA ENERGY UK licenses coal gasification trials The UK government is set to push ahead with underground coal gasification work despite rising safety concerns. The process, which is similar to shale fracking, has been ruled out in Scotland pending a public health impact assessment. But the Westminster government has issued more than 30 licenses for developers to plan pilot projects. Underground coal gasi- fication, deemed "risky and experimental" by environmental campaigners, involves blasting underground coal seams with enough heat to cause gas to be released and extracted through a separate well. The process has not been tested at commercial scale in the UK, but the Scottish government has said that no further work will be allowed until it has car- ried out a public health impact assessment set to last until sum- mer 2016. WATER Southern expects Three Oaks approval Southern Water is expected to be awarded planning permis- sion for its proposed wastewater treatment works at Three Oaks aer a recommendation from East Sussex County Council. Southern Water is propos- ing a gravity system to connect properties to a new public sewer – households currently rely on private drainage systems. Rother District Council applied to Southern Water in 1996 to provide a public sewer- age system but that was rejected. Southern Water's re-assessment in 2005 confirmed its decision. However, the district council lodged a dispute with the Environment Agency, which con- cluded that a public sewerage system should be constructed to address the risk of pollution. ENERGY Networks 'must not rely on regulation' Despite being natural monopo- lies, the energy networks must take responsibility for their own customer performance, without "relying on regulation", accord- ing to the head of Electricity North West (ENW). Speaking at a Utility Week fringe event at the Conservative Party conference, ENW chief executive Steve Johnson said the networks were in a position to deliver for customers "as if in a competitive market". Minister for constitutional reform John Penrose, said the strong regulation of energy net- works would remain "crucial", but suggested the competitive parts of the energy industry, such as the suppliers, could benefit from a "lighter-touch". Nearly 3GW of capacity will move ahead Political Agenda Mathew Beech "It's a loss of face for Sturgeon and the SNP" Saving money is not usually a cause for political embar- rassment. However, when the Scottish government awarded a £320 million contract to Anglian Water Business rather than state-owned Business Stream, it was just that. At Holyrood the move has been called "deeply regrettable", "embarrassing", and "a real mess" by the SNP's opponents. It's a matter of national pride. When the tender for the water and wastewater contract was in March this year, three delays have pushed the start of the deal back to the end of December. It missed the general elec- tion, which was an SNP success story, and the announcement will be long forgotten before the Holyrood elections. If it is raised as an issue, the SNP can always blame Tony Blair for the 1998 UK-wide competition act, which water competition in Scotland has to comply with, rather than their handling of the tender. launched in August last year, the minister for infrastructure and cities at the time, Nicola Stur- geon, said she wanted to "ensure that Scottish Water continues to be a public success story". Scottish Water goes from strength to strength, and will supply water to 100-plus public sector organisations, but it will not be the retailer. That's a loss of face for Sturgeon and the SNP. Even the Scottish govern- ment appeared less than keen to award AWB the deal: "This is the best deal for Scotland under the rules that bind us," it said. The timing of the announce- ment has caused intrigue. Originally due to be awarded

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