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UTILITY Week 18th December

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UTILITY WEEK | 18TH - 24TH DECEMBER 2015 | 9 Policy & Regulation This week Centrica wants tax breaks for batteries Adding batteries to a list of products that attract Enhanced Capital Allowances will boost investment Centrica has called on the government to add batteries to the list of technologies given a one-year tax break to boost investment in energy storage. Chris Morrison, head of energy construction services for distributed energy and power, made the call during an evidence session of the Energy and Cli- mate Change Committee on low-carbon infrastructure. Asked whether the government is prioritising energy storage, Morrison said Centrica would like the govern- ment to add batteries to the list of products that attract enhanced capital allowances (ECAs). ECAs let businesses that invest in certain energy- saving equipment write off the entire cost against their taxable profit in the year the equipment was bought. He said adding batteries to the list would increase returns for companies looking to invest in the storage market. The enhanced capital allowances scheme is run by the Carbon Trust on behalf of the government. Morrison said adding storage to the list would not reduce the tax take for the government over the life of the installation. Morrison said the price of batteries is coming down rapidly as electric vehicles become more popular. He added that Centrica is talking with industrial and com- mercial customers about installing batteries for PV sys- tems. "We will start to see battery storage as a commer- cial option for our customers in the next year," he said. Scottish Power Energy Networks said the UK energy storage market would also benefit from installation targets similar to those in the US. LD ENERGY Climate ambitions in question after Paris The UK's climate policy ambi- tions have come into question aer the global climate deal signed in Paris over the week- end, with green groups calling for tougher targets. The global deal binds all 195 nations to limiting global warm- ing to "well below" 2°C, which could mean the UK's Committee on Climate Change will advise government to be more ambi- tious. But according to media reports, the administration is unconvinced that policy changes are needed. In its fih carbon budget the CCC urged government to reduce UK emissions by 57 per cent in the period 2028-32, and by at least 80 per cent by 2050. On Monday the CCC said this was based on the least-cost path and on a global ambition to keep temperature rise close to 2°C. But with the Paris agree- ment calling for more ambitious targets, the CCC's recommenda- tions could call for the UK to toughen up further. WATER Ofwat to ditch RPI for CPI in PR19 Ofwat is to use a "more legiti- mate" consumer price index when it sets price controls, to allow for cost recovery inflation. Currently Ofwat uses the retail price index (RPI), but says it is increasingly discredited as a reliable measure of inflation. The regulator plans to gradu- ally move to the consumer price index (CPI) starting in PR19. "To help companies man- age this change, at the start of the next control period we will apply a transition mechanism that ensures half of the RCV continues to be indexed by RPI for PR19," it said. ENERGY Ofgem to investigate meter services costs Distribution Network Operators (DNOs) face questions from the regulator aer a national media report claimed that thousands face an "energy price rip-off " over meter services. The Times reported on Satur- day that the huge discrepancy between DNO charges means some customers are being charged up to £5,400 for their meters to be moved. The regulator said it plans to ask network companies to explain the price differences. The regulated regional monopolies are allowed to recover costs but are not expected to make a profit. But the newspaper reports that meter-moving charges vary from £653 for customers with Western Power and as much as £5,400 for those with UK Power Networks. Battery storage for PV may be viable within a year Political Agenda Jillian Ambrose "Rudd may be committed to business as usual" Amber Rudd's mission to make energy policy "boring" is noth- ing if not resilient. The energy secretary first set out her bizarre ideal in her recent energy "reset" speech, and it seems her support of the dull will persist – even in the face of the historic Paris climate deal. The global decarbonisation pact may have been described as a "major leap for mankind", but press reports this week have suggested that Rudd may still be committed to business as usual. nalled her intent to work along- side transport and heat indus- tries in a bid to meet the UK's 2020 renewable targets. There was cause for cautious optimism aer the Autumn Statement, with support for the Renewable Heat Incentive and an increased focus on heat networks, energy efficiency and green gas could cut carbon further. Could decarbonising heat emerge as a Tory-friendly step in the right direction? It certainly wouldn't be boring if it did. Rudd may have described the deal as a historic moment – but when it comes to implementing new policy it's likely she's refer- ring to the other 194 countries. You know, the ones that don't already find themselves shack- led to a legally binding commit- ment to cut carbon by 80 per cent from 1990 levels by 2050. The UK's Committee on Climate Change has set out an ambitious path ahead, and it's possible Rudd will maintain her focus on customer costs and put her foot down on further carbon cuts. But perhaps this is too cynical a view. At a recent select committee hearing, Rudd sig-

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