Utility Week

UTILITY Week 3rd June 2016

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UTILITY WEEK | 3RD - 9TH JUNE 2016 | 19 Policy & Regulation This week 'Staying in EU will save energy £12bn' Lord Bourne says promoting a Leave vote would be tantamount to flouting Decc's responsibilities Writing for Utility Week (26 May), Lord Bourne, parliamentary undersecretary at the Depart- ment of Energy and Climate Change (Decc), endorsed remain- ing in the European Union, say- ing it would help control energy costs, provide security of supply and encourage investment (full piece online). Lord Bourne said: "If we stay in the EU, we're expected to more than double the amount of electric- ity we can import from the continent over the next five years, saving consumers nearly £12 billion in energy costs over the next two decades." Referring to evidence published by National Grid in March, Lord Bourne said leaving could cause energy costs in the UK to rise by at least £500 million a year. He said promoting a Leave vote would be to flout Decc's responsibility to make sure "our families and businesses have the certainty of secure, affordable and clean energy supplies". He also said that "£45 billion from across Europe was invested in our utilities sectors in 2014". Speaking at a recent meeting of the Energy and Climate Change Committee, professor of international energy and climate change policy at University College London, Michael Grubb, insisted that, even if the UK le the EU, it would still be "better off in the single energy market", despite the fact that it would probably mean giving up any control over relevant policies. Utility Week will be running special coverage of the EU referendum in its 17 June issue. ELECTRICITY Large-scale AD FIT could be scrapped The government has proposed scrapping the feed-in tariff (FIT) for anaerobic digestion installa- tions generating between 500kW and 5,000kW from January 2017, because many are economically viable without subsidy. According to the government, "market intelligence and anecdotal evidence" suggests an increasing number of instal- lations are taking the form of combined heat and power projects, which are also able to take advantage of the Renewable Heat Incentive (RHI). There has also been a rise in the number of installations being accredited for the both the FIT and the RHI. The govern- ment said a typical project of this kind could expect to gener- ate a return on investment of more than 9 per cent a year even without FIT support. It has also proposed reducing support for sub-500kW projects. HEAT ADE sets out heat policy roadmap The Association for Decentral- ised Energy (ADE) has set out a policy roadmap which would "level the playing field" for heat networks and make them subsidy-free from 2021. In a new report, the ADE called for: a guarantee on future heat connection capacity to reduce the risk for investors; lower business rates for heat networks to match those for electricity and gas networks; and an expansion of the role of the Department of Energy and Climate Change's Heat Networks Delivery Unit. It said the three measures would "help attract lower-cost investment by reducing heat network capital risk, lower net- work costs by creating a fairer tax regime, and provide local authorities with the support they need to move forward with new network investments". GAS Shale must 'prove itself ' in Yorkshire The decision by North Yorkshire County Council to allow fracking near Kirby Misperton has given the shale gas sector "a chance to prove itself ", according to the Energy and Utilities Alliance (EUA). Third Energy has been granted permission to conduct eight weeks of tests at its well. EUA chief executive Mike Foster said the decision was "massive in terms of the future of the shale industry". "I think Third Energy have got a huge amount of respon- sibility on their shoulders and at the same time it's a great opportunity for them as well," he said. Bourne: supply security threatened by Leave Political Agenda Mathew Beech "The Tories can agree about fracking, if nothing else" With the Conservative prime minister pairing up with the Labour mayor of London to take on the Tory ex-mayor and Ukip leader in the EU referendum, there is at least one unifying announcement the governing party can cling on to. Shale gas. North Yorkshire County Council approved Third Energy's plans to hydraulically fracture its well near the village of Kirby Misperton (see news, above) – something the Conservatives will undoubtedly be pleased anti-fracking brigade, calling it a "fantastic opportunity", reit- erating that the practise is safe because of the regulatory regime the UK has in place, and that the industry could create 64,500 jobs nationally. So, at a time when the Brexit battle is raging and party loyal- ties have been ( temporarily) abandoned, it is almost refreshing to know that political normality can be found by the government approving some- thing controversial. about, since they have long sup- ported fracking. Not only did it form part of their manifesto, but it has even got the EU-divided energy sec- retary Amber Rudd and energy minister Andrea Leadsom show- ing a genuine united front. The community around Kirby Misperton, and the opposition parties, are vocal in their hostil- ity to the planning approval – and to fracking in general. Even the council's planning committee appeared to approve the plans begrudgingly, referring to the national policy framework which sets out the importance of indigenous oil and gas reserves. Leadsom hit back at the

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