Utility Week

UTILITY Week 13th May 2016

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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UTILITY WEEK | 13TH - 19TH MAY 2016 | 11 Policy & Regulation This week Labour scathing over early capacity auction Bringing forward capacity market auction will cause consumer bills to 'shoot up', says Labour Labour has slammed the Depart- ment of Energy and Climate Change (Decc) for bringing forward the capacity market auction, saying it will cause consumer bills to "shoot up". Decc said its March proposal to bring forward the capacity market received "overwhelming support" from industry stakeholders, and confirmed last week that it would proceed with the implementation of an early auction for delivery in 2017/18. In a letter of determination, energy secretary Amber Rudd also con- firmed that a four-year ahead (T-4) auction will be held aer 1 September 2016 for delivery in 2020/21. In a statement issued to coincide with Decc's confir- mation of the new timetable, shadow energy secretary Lisa Nandy slammed the government's decision, accus- ing it of "trying to bury the bad news" that the costs would be passed on to consumers. Decc said: "The government acknowledges the operational challenges faced by suppliers in manag- ing the previously unexpected costs associated with an early auction, and recognises that it is optimal to give suppliers as much notice as possible of policies that will have a bill impact." However, it argued that stakehold- ers, including suppliers, had acknowledged that an early auction is "a necessary step" to ensure the security of the UK's electricity supply in response to "previously unforeseen" market developments. Nandy said the auction was a "massive waste of money", adding: "It has been so badly designed it isn't getting new power stations built but instead is just lining the pockets of the big six and investors in highly polluting diesel generators." SJ GAS Governance must fill heat policy 'vacuum' An independent report has called for new governance arrangements to fill the "vacuum" for decision making and delivery in the heat sector. The report by the Imperial Col- lege Centre for Energy Policy and Technology said there is a need for "strong city and local author- ity level involvement" in heat governance, although resources for this do not currently exist. For the UK to meet carbon tar- gets agreed in Paris it will have to decarbonise heat in more than 20 million buildings, but there is "no one silver bullet" to do this, with a range of solutions having a role. These include using the existing gas grid for hydrogen, electrifica- tion through heat pumps, and district heating networks. The report said: "By starting now on the planning and prepa- ration and by spreading activity over 20 30-year infrastructure investment programmes, the task can be made much more manageable." ELECTRICITY Whitehead: Grid should stay as SO Shadow energy minister Alan Whitehead has backed plans for National Grid to continue in its role as system operator (SO), as long as the company can achieve more separation from the rest of its activities. Speaking to Utility Week, Whitehead said: "An SO that was National Grid would be a very good thing providing it actually operates properly as a system operator and sorts out a number of its potential contradictions." It was reported earlier this year that ministers are consider- ing stripping National Grid of its SO role in favour of an independ- ent body. But Whitehead said National Grid has acted in the best interest of the nation "when perhaps other people weren't". WATER Ofwat sets deadline for business plans Ofwat has revised the date by which water companies must submit their final PR19 busi- ness plans to 3 September 2018, bringing it more in line with the water resource management planning process. The regulator had previously proposed to bring forward busi- ness plans by about four months. However, respondents to its December consultation raised concerns about the potential mis- alignment of the water resource management planning process and the National Environment Plan with this longer timeline. In a joint letter to companies, Ofwat, Defra and the Environ- ment Agency said: "We have listened to the concerns raised about alignment and recognise the benefits that greater align- ment between the two planning processes will bring." Nandy: auction is a 'massive waste of money' Find out more hudsonenergy.co.uk/gas or 0330 088 2697 Hudson Energy is a growing supplier of B2B energy contracts in the UK. Benefitting from an exceptional understanding of the market, we provide our customers with fully fixed prices, choice and service. As of April 2016 we added gas to our competitive product portfolio. We've made it easy to find the right contract for your business. Simply choose from a variety of price options and fix your term from 3 months to 3 years. Choice is Power

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