Utility Week

10 | 18TH - 24TH MARCH 2016 | UTILITY WEEK Policy & Regulation This week Lack of new nuclear would leave 'big hole' Ex energy minister warns of the consequences for nuclear if EDF does not go ahead with Hinkley There will be a "whopping great big hole" in Britain's energy policy if new nuclear plants can't be built affordably, according to a former energy minister. Charles Hendry told delegates at an event on investor confi- dence in London last week that the consequences for nuclear would be "very challenging" if EDF didn't press ahead with the Hinkley project. "It doesn't mean that other companies couldn't come forward, but if state-owned entities couldn't make it happen then what are the prospects for private compa- nies?" he added. "If nuclear was found to be unafford- able to invest in, in the United Kingdom, there [would be] a whopping great big hole in energy policy." Hendry said he thought Hinkley was likely to be built a‰er the British and French governments reaffirmed their commitment to the project last week: "The battle between whether this is an economic or political decision has been won by the politicians." Chief executive and co-founder of consultancy Quercus Investment Partners, Diego Biasi, questioned why the government is still keen to build a nuclear plant when other countries, such as Germany, are phasing out nuclear. He argued that a combination of renewable energy and new energy storage technology will make nuclear plants redundant by the time Hinkley is built. However, former chair of the World Energy Council, Sir John Baker, said baseload generation remains "essen- tial". "For baseload generation, nuclear is the best bet, even if the Hinkley Point reactor isn't." TG ENERGY Policy 'unmatched in uncertainty' Britain's energy policy is unmatched in terms of "uncer- tainty" and "chaos", according to a former chair of the World Energy Council. Speaking at an event on inves- tor confidence in London last week, Sir John Baker said: "What has happened is at every decade, or every change of government, the priorities have changed, the support system has changed, the structure of bringing things into the market has changed." The current government has implemented a ra‰ of reforms to energy policy since coming to power, among them axing the competition to develop carbon capture and storage and bring- ing an early end to the Renewa- bles Obligation for onshore wind and solar. A recent report by the Energy and Climate Change Committee said such changes had le‰ investors "spooked". "Where we are today is pretty well unmatched across the energy universe that I know in terms of uncertainty, and I would even use the word chaos, in relation to energy policy," Sir John said. WATER Firms to report AIM performance Water companies must report their performance to Ofwat for individual sites under the abstraction incentive mecha- nism (AIM) on an annual basis, starting in the next financial year (2016/17). The regulator has published its final guidance for compa- nies on the AIM, which aims to encourage water companies to reduce the environmental impact of abstracting water at environmentally sensitive sites. The regulator will publish AIM performances a‰er companies have submitted their annual performance reports a‰er July 2017. ELECTRICITY Milestones met by eight CfD projects Eight of the 27 projects to be awarded contracts for differ- ence (CfDs) in the first auction have passed their milestone requirements, according to the Low Carbon Contracts Company (LCCC). In February, the LCCC announced that four of the projects had met their require- ments. It has now announced that a further four have met theirs, too. They are: BH Energy Gap's 26MW energy from waste plant in Walsall; Energy Works' 25MW energy from waste plant in Hull; CGN Europe Energy's 45MW Brenig onshore windfarm at Denbigh in Wales; and Cam- bridgeshire County Council's 9.9MW Triangle Farm solar park. Hendry: 'The battle has been won by politicians' Political Agenda Mathew Beech "Energy minister will look at ways to help new entrants" The Competition and Markets Authority has dominated the energy debate in the Palace of Westminster over the past week, but buried amid the talk of prepayment meter price caps, assisting vulnerable consumers, and increasing consumer engagement was something else that could give smaller suppliers a boost. In a Westminster Hall debate, Labour MP Matthew Pennycook pressed energy minister Andrea Leadsom on what else Ofgem "massive challenge" to inject competition into the energy sec- tor, which is seen as a route to increasing customer engagement and lowering consumer bills. On the subject of cost to consumers, Leadsom added that the price cuts made by the major energy suppliers to their stand- ard variable tariffs were "good news", but cautioned, "we want to see much more effort" by the suppliers in continuing to cut customer bills. They have been warned. can do to help new suppliers to enter the retail market. In particular, he cited the work of Ofcom with the telecom- munications sector to "help new entrants better to understand the regulatory environment". Leadsom appeared to take on board Pennycook's comments, despite saying, "it is something Ofgem is very aware of ". The energy minister added she will "certainly take that point away and look at it again", potentially paving the way for Ofgem to assist new entrants to the market, adding to the 35 existing suppliers. This all ties in with the government's plan to tackle the

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