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UTILITY Week 14th October 2016

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18 | 14TH - 20TH OCTOBER 2016 | UTILITY WEEK Operations & Assets Country profile ENERGY Scotland is a renewable force to be reck- oned with. Renewables were the single larg- est contributor to electricity generation in Scotland in 2015 – higher than nuclear gen- eration (33 per cent) or fossil fuels (28 per cent). The government wants to go further, generating the equivalent of 100 per cent of its electricity consumption and 11 per cent of heat consumption from renewable sources by 2020. Onshore wind has seen huge success, exceeding the country's energy demand on two days in September. The country also boasts 25 per cent of Europe's offshore wind resources and is home to 100 per cent of hydroelectric plants with planning permis- sion in the UK. Despite the prosperity of the country's renewable resources, Scotland's energy sys- tem is not without its challenges. Energy Action Scotland (EAS) is calling on the Scot- tish government to negotiate a better deal for rural consumers through regulation. In the north of Scotland customers face higher prices because the area's rural and remote nature means they pay higher distribution costs. The EAS claims the difference between here and elsewhere is 2p/kWh. EAS director Norman Kerr tells Utility Week: "This is not a new problem. It's one we've had for the past 50 years, so it may be that we need a new and innovative solution to it." Fuel poverty is a major issue and in June 2016 the Scottish government admitted it would not meet its target of ending fuel poverty in Scotland. The Scottish govern- ment has a statutory duty under the Housing (Scotland) Act 2001 to "ensure, so far as rea- sonably practicable, that people are not liv- ing in fuel poverty in Scotland by November 2016". But the most recent official figures, for the year 2014, show that around 35 per cent of Scottish households are in fuel poverty. For huge parts of Scotland, particularly along the west coast and the highlands, there is no gas infrastructure. Many homes have electric heating, and therein lies another issue. The calculations of energy efficiency schemes assume that electric heating is 100 per cent efficient, so no improvements can be made and the consumer is unable to switch over to gas to get the carbon saving. So what's next for Scotland's energy system? The EAS is urging government to shape regulation for the private rented sector and place an energy efficiency standard on it. A similar standard is in place in England, which requires a property to be above a cer- tain level of energy efficiency before it can be let. The organisation "applauds" the govern- ment for committing funding to the national infrastructure priority and strategic fuel poverty policy, but says it must now "draw a route map" about what it can reasonably suggest to the Scottish public for the next fuel poverty targets – and commit the fund- ing to achieve that. A WWF Scotland report concluded that Scotland could be free of gas, coal or nuclear power stations by 2030 and "maintain and even build on its position as a net power exporter". The government will need to push through new policy to resolve the energy dilemma in rural Scotland, but the future for renewables looks bright and with govern- ment support, renewable sources in Scot- land can continue to be harnessed. Focus on Scotland Scotland has bold ambitions for renewable energy, while the water sector has a seven-year march on competition. Utility Week takes a look at what is going on in the Scottish energy and water sectors. WATER The water sectors in Scotland and England face many of the same challenges, such as climate change, population growth and ageing assets. However, there are also some stark differences. One of the biggest is that while England is served by 21 commercial companies, in Scotland there is only publicly-owned Scot- tish Water. Unmetered domestic customers pay for their water via their council tax bill. Competition exists in the non-domestic retail market, and has done since 2008. Scottish Water is the incumbent whole- saler, while retailers compete for custom- ers. The largest supplier is Business Stream, Scottish Water's business retail arm. There are a number of other retailers in the Scottish market, including Castle Water and Clear Business Water, as well as some of the English incumbents. target to reduce emissions of all greenhouse gases by 42 per cent by 2020. In July, Scottish environment secretary Roseanna Cunning- ham announced that the country's emissions had fallen by nearly 46 per cent between 1990 and 2014, surpassing its target earlier than expected. Scottish Water requires around 440GWh of electricity annually to operate its 2,000 treatment works and 60,000 miles of pipes. In the past two years, the company has dou- bled the amount of renewable energy that can be generated at its treatment works and in its water mains. Several of its treatment works can be considered self-sufficient. Another big challenge facing many water companies is population growth. The UK's population is expected to rise by ten mil- lion by the 2030s and another ten million by around 2050. Boosting the resilience of the network and The Central Market Agency is Scotland's version of MOSL, and facilitates the transfer of customer information between suppli- ers. It also calculates the money owned by each supplier to Scottish Water for wholesale services. There are more than 130,000 business customers in Scotland eligible to choose their supplier, while the soon-to-open Eng- lish market will have more than 1.2 million eligible customers. Many believe that switch- ing in England will happen at a much higher rate than it currently does in Scotland. The economic regulator for the Scottish market – Wics – has much the same task as Ofwat in England and Wales. Wics chief executive Alan Sutherland says he does not necessarily agree with introducing lots of markets into the sector in the same way as Ofwat wants to in England and Wales. Scotland as a whole has an ambitious

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