Utility Week

UTILITY Week 3rd February 2017

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8 | 3RD - 9TH FEBRUARY 2017 | UTILITY WEEK Policy & Regulation This week Brexit 'poses internal energy market risk' MPs warned there will be negative implications if UK loses its say on internal energy market rules The UK's exit from the EU raises risks for the UK's voice in the internal energy market, MPs were warned last week. Paul Hallas, regulation and strategy director at Centrica, told the business, energy and industrial strategy select com- mittee that there will be negative implications if the UK loses its say over how the internal energy market's rules operate as a consequence of Brexit. Giving evidence at the committee's opening session in an inquiry into the implications of Brexit for energy and climate change policies, he said: "It would be quite risky to put ourselves in a position where we are a pure rule- taker and have to adopt rules which are made in Brussels and the UK has less influence than it does today." Hallas added that in a "rational world", the energy industry would want to preserve as much as possible of the existing internal energy market arrangements. "We would not like current arrangements to be dismantled or undone. We want an outcome where the UK adopts the vast majority of technical internal energy market rules in order to make effective use of capacity and encourage investment." However, Hallas expressed fears that, although pres- ervation of the internal energy market's rules would be in the interests of consumers, energy policy risked being caught up in the politics of the wider Brexit negotiations. Other evidence presented to the committee raised concerns about the future of energy investment in the UK following Britain's exit. DB See analysis, p12 ELECTRICITY UK to withdraw from nuclear group The UK will leave the European Atomic Energy Community (Euratom) when it exits the EU, the government has confirmed. Plans to withdraw from the nuclear industry organisation were revealed in notes published alongside the bill giving the government the power to trigger Article 50. The news has disap- pointed industry representatives in the UK. Nuclear Industry Association chief executive Tom Greatrex said: "Our preferred position is to maintain membership of Euratom. The nuclear industry is global, so the ease of move- ment of nuclear goods, people and services enables new-build, decommissioning, R&D and other programmes of work to continue without interruption." Greatrex added: "If the UK ceases to be part of Euratom, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada." WATER Water firms' fines net £575k for charity Northumbrian Water and Anglian Water have been ordered by the Environment Agency to pay a combined £575,000 to environmental charities aer breaking environmental laws. They are among a group of firms that will pay a collective £1.5 million for projects benefit- ing wildlife and the environment, aer they broke environmental laws – either by polluting rivers, breaching permit conditions designed to protect communities or avoiding recycling. In total, 30 charities and projects will benefit. ELECTRICITY New interconnector approved in France A 1GW interconnector between the UK and France has been approved by the French energy regulator. The Commission for the Reg- ulation of Energy (CRE) made the decision following a consul- tation on the IFA2 interconnector that it began in December last year. The subsea link is being developed by National Grid and its French equivalent RTE. RTE applied for approval in April 2016 but did so on the understanding that the UK would remain a member of the EU. It was compelled to reapply following the Brexit vote. "In general, the various pro- moters believe that the economic fundamentals of the projects remain the same, whether or not the UK is in the European Union," said CRE. Select committee: heard evidence from Hallas Political Agenda David Blackman "Scots plan to generate 50% of energy from renewables" The new US president used to get extremely hot under the col- lar about windfarms in Scotland. In a now infamous letter exchange, Donald Trump harangued the then Scottish first minister Alex Salmond about his government's backing for a windfarm off the coast of a golf resort Trump had near Aberdeen. Trump has bigger fish to fry now but he would probably take a dim view of the Scottish gov- ernment's new energy strategy, published on 24 January, which a reserved matter for the UK government. The business department's industrial strategy, which appeared in the same week, shows Westminster is still com- mitted to curbing emissions. But the enthusiasm for renewables is much more palpable north of the border, where the government says it is "more important than ever" for Scotland to chart its own course. Perhaps we are seeing the first sketch of an energy strategy for an independent Scotland. includes support for more of those pesky windfarms. The strategy sets a target that 50 per cent of the country's energy needs will be generated from renewable sources by 2030 – ambitious considering that despite impressive progress in recent years, renewables cur- rently account for 13 per cent. A key plank of the strategy is to convert two million Scottish homes to low-carbon energy by 2030. But there are few figures on how much it will cost to upgrade the ageing, leaky hous- ing common in central Scotland. Another problem, as the document acknowledges, is that much energy policy remains

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