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UTILITY Week - 12th February 2016

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UTILITY WEEK | 12TH - 18TH FEBRUARY 2016 | 17 Policy & Regulation This week Competition nod for onshore transmission Decc claims move could deliver £380 million of savings to consumers in 'operational costs alone' The Department of Energy and Climate Change (Decc) has backed the introduction of competitive tendering for future onshore transmission licences, despite concerns from industry. Decc said the new rules, proposed in the dra legislation on energy presented to Parlia- ment in January, could deliver £380 million of savings to consumers in "operational costs alone" over the 25-year lifetime of the licences. It also said the rules would "encourage new players into the energy market, foster greater innovation and competition, and create a diverse and flourishing network sector". Under the proposals for competition for onshore licences, bidders would compete to build onshore trans- mission infrastructure valued at more than £100 million. But in response to a consultation by Ofgem that closed in January, National Grid Electricity Transmission (NGET) said the proposals have an "over-reliance on analogies to the offshore transmission owners' (Oo) regime" and do not take into account differences between offshore and onshore assets. NGET said the financial benefits to consumers require "further assessment" and expressed concerns over the impact of competition on the overall reliability of the transmission system. Distribution network operators echoed the concerns, saying the wider network impact has not been fully addressed, and they have not been adequately engaged with the process. Ofgem said it expects to run the first competitive tender for onshore transmission in 2017. LD ELECTRICITY Wales stymied on new renewables The Welsh government will be unable to bring forward renew- able generation in the country, despite being given new devolved powers, Plaid Cymru MP Liz Saville Roberts has warned. Saville Roberts said there is not sufficient capacity on the grid in Wales for new renewables pro- jects, particularly in mid Wales. The Welsh government cur- rently has the power to approve projects up to 50MW, but this is set to increase to 350MW under the Wales Bill. However, grid infrastructure and planning will remain with Westminster. Saville Roberts told Utility Week: "I welcome the fact that we are talking about devolving greater powers over generating electricity to Wales, but effec- tively for many areas of Wales, particularly rural Wales, it won't be possible to realise these pow- ers, because the Welsh govern- ment will have no say over [the grid, which is not devolved]." ELECTRICITY Peers vote to keep lower feed-in tariffs The House of Lords has voted to keep new feed-in tariff rates due to come into effect this week. A motion to repeal the changes was defeated last week by more than two to one. The motion was tabled last month by Lib Dem peer and former coalition minister, Lynne Featherstone, following wide- spread criticism of the new rates, particularly those for solar. The tariff for small solar installations of less than 10kW will be cut by 63 per cent, from around 12p/kWh to 4.39p/kWh. The rate for larger installations of between 10 and 50kW will fall from 11.3p/kWh to 4.59p/kWh. ELECTRICITY ENA moves to free up network capacity The Energy Networks Associa- tion (ENA) has laid out a set of prescribed points that developers must hit, or risk losing their con- nection to the distribution net- work, in ongoing efforts to release unused capacity and avoid costly network reinforcement. These milestones would allow distribution network operators to withdraw and reallocate capacity to other customers when the capacity is not being, and is unlikely ever to be, used by the customer holding the connection. Customers would be required to hit the prescribed points dur- ing the development of the asset being connected, or risk losing the connection. A consultation will be held in March and the ENA will then report to Ofgem, with a view to enacting the milestones by the end of June 2016. Bidders would compete to build infrastructure Political Agenda Mathew Beech "Even Tory MPs raised concerns about fuel poverty" Rumblings of discontent were heard yet again in Westminster from members of all parties over how the government and indus- try should tackle fuel poverty. Led by energy spokesman Cal- lum McCaig, the SNP once again called for a national transmission pricing structure to help those in more remote areas pay less. Former shadow energy minis- ter Jonathan Reynolds slammed the Energy Company Obligation as "not fit for purpose", while his Labour colleague Clive Lewis pay more under a national trans- mission pricing system. She added the government is "absolutely focused on tackling fuel poverty" and that the new energy efficiency programme will "tackle the root cause" of fuel poverty. The message was that the government is aware of the problems being raised, and is addressing them. We will find out just how well when the details of the new energy effi- ciency programme come to light. attacked the government for lowering its ambition on energy efficiency. More than five million homes had energy efficiency measures in the last parliament, he said, while the government is planning for only one million between 2015 and 2020. Even Conservative MPs raised concerns with the level of fuel poverty and the effect it can have on the health and wellbeing of the most vulnerable. Tory David Warburton said "progress seems rather overdue" on the issue. However, energy minister Andrea Leadsom basically swatted away their arguments – especially that of McCaig – stating 1.8 million homes would

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