Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/606960
6 | 27TH NOVEMBER - 3RD DECEMBER 2015 | UTILITY WEEK Policy & Regulation This week MPs question Grid after Calon windfall Generator secured a £2,500/MWh payout hours after removing its plant from the market The Energy and Climate Change Committee (ECCC) questioned National Grid on its plans to keep the lights on, aer a generator secured a £2,500/MWh payout hours aer removing its plant from the market amid a National Grid supply crunch alert. The one-off hearing examined the transmission operator's plans to balance the market over this winter and the next, including spiralling payments for generating assets at times of peak power demand, which earlier this month reached £2,500/MWh. Bloomberg market analysis shows that Calon Energy began to reduce output from its plant in the mid- aernoon aer National Grid issued its first Notice of Inadequate Supply Margin (NISM) since 2012, but then agreed to return the unit during peak demand hours for a market-topping price of £2,500/MWh. But National Grid's head of real-time market opera- tions, Duncan Burt, told the Committee that it is not unusual for generators to reduce power output depend- ing on the amount they have sold into the market. In a separate statement aer the hearing, Calon Energy echoed Burt, saying its Severn power plant "was contracted to run until 3pm. Accordingly, at 3pm it started to ramp down as is consistent with normal market procedure". National Grid's director of UK market operations, Cordi O'Hara, told the Committee that it has given a large amount of data to Ofgem relating to 4 November market activity, and that a "constant feedback loop" is in place to ensure appropriate use of its market balancing tools. JA WATER Firms must 'tackle barriers' to reuse Barriers to water reuse and recy- cling must be addressed so they become an "obvious solution" for water companies in tackling water scarcity and resilience, according to the European Union. At a meeting of the European Parliament Water Group, envi- ronment commissioner Karmenu Vella said although sound water management is "oen regarded as a cost", it is always an "excel- lent investment". The cost of investment, he added, could be "drastically reduced" once investment barriers are removed. Vella said it is "critical" that the water sector addresses issues around water recycling. "Reus- ing water isn't just an opportu- nity to address the issue of local scarcity," he said. "This is also an economic opportunity." ENERGY Ofgem warns over changes to codes Ofgem has warned that changes to industry codes and systems that the Competition and Markets Authority (CMA) may recommend could have a more "profound" and "long-lasting" effect on industry than the pro- posed safeguard tariff would. The regulator said it wel- comed the CMA's provisional findings that Balancing and Settlement Codes (BSC) and industry systems are having an adverse effect on competition, saying it has already seen "ten- sions rise" due to the process. Ofgem senior partner for mar- kets, Rachel Fletcher, said this week: "It could be that remedies that they introduce in this area are more profound, more impor- tant for consumers, and have a more long-lasting effect on the industry than the safeguard tariff that is currently gaining so much attention." WATER Charges schemes do not need Ofwat nod Water firms will no longer have to submit their customer charges schemes to Ofwat for approval, as the regulator announced it has moved to a rules-based approach to regulating such schemes. In line with provisions in the Water Act 2014, companies must instead make sure their scheme complies with "all their legal obligations", including rules set out by the regulator. Under the new rules, each company must consult the Consumer Council for Water on their proposed charges scheme. They must also offer a rebate for customers where they know that surface water does not drain to a public sewer; and provide "reasonable choice" as to the times and methods of payment of charges. Under control?: Grid's plans to keep the lights on Political Agenda Jillian Ambrose "We need energy policy to be progressive, not boring" "Fundamentally, I want energy policy to be boring." Energy secretary Amber Rudd has made great strides towards this goal in her long-awaited reset speech, offering up a subtle refocus that sticks with what we know and expect. In short: it's conservative. The Tories have never found energy policy too inspiring, so it's perhaps little surprise that in a majority government the party is set on trying to convince us all that we should these things if government was prepared to offer a genuine reset for an industry on the brink of a seismic technological shi. By framing energy as some- thing "people going about their daily lives don't need to worry about", Rudd misses the point that consumers are increasingly engaged with energy – from their bills, to their suppliers and where the energy has come from. Boring is not what we need. Fundamentally, we need energy policy to be progressive. find this trilemma talk dull. Utility Week memorably reported that Tory MP Phillip Lee took to a pre-election industry debate to say that the Con- servatives "have no clear energy policy". When it did emerge, the Tory manifesto rehashed its own version of acceptable Liberal Democrat lines, accented with a bit of foot-stomping over renewables. Few would argue that energy policy should be a cause for concern. But the point Rudd is missing is that the alternative to instability need not be boring. What about exciting, inspiring, world-leading? The UK's energy policy could be all of