Utility Week

UTILITY Week 28th April 2017

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Cutting the embedded benefits of the winners of the first two capacity auctions would cost consumers £590 million, analy- sis by Aurora Energy Research has concluded. Ofgem has decided to slash the triad avoidance payments enjoyed by distributed genera- tion to level the playing field with transmission- connected plant, and has proposed applying this change retrospectively to winners of the first two capacity auctions. However Aurora's research, commissioned by peaking plant developer UK Power Reserve, claims the £800 million of embedded benefits that Ofgem is seek- ing to have removed from distributed generation would be more than offset by reduced prices on the whole- sale power market and higher costs in future capacity auctions, which would ultimately cost consumers £590 million. UK Power Reserve won a large number of contracts for distribution-connected reciprocating engines in the four-year-ahead (T-4) capacity market auctions in 2014 and 2015. It argues that moving the goalposts now would damage investor confidence and push up the cost of future capacity auctions. Aurora estimated that up to 20 per cent of the plant that won capacity contracts could be scrapped if their embedded benefits were reduced because the economics would no longer stack up. This lost capacity would have to be replaced in future auctions, at a higher cost. TG Finance & Investment This week 'Embedded benefits are saving money' Moving the goalposts for capacity contract winners would cost consumers in the long run ELECTRICITY Greensolver and Infinergy form JV French renewables company Greensolver has teamed up with developer Infinergy to create a joint venture to strengthen its position in the UK. Greensolver UK will combine Greensolver's technical experi- ence and Infinergy's knowledge of the British markets to provide a complete management service for wind and solar assets. The JV will be specifically concerned with technical and commercial management of oper- ational plants, with technical due diligence, construction project management and an advisory service being provided indepen- dently by the French firm. Greensolver chief executive Guy Auger said the partnership with Infinergy was a natural choice: "We already operate six windfarms they [Infinergy] developed, and experienced first-hand how professional they were and how well they under- stood the UK market dynamics." ELECTRICITY Hinkley at threat of strike over bonuses Construction work at Hinkley Point C could be delayed aer unions threatened to strike in a dispute over bonus pay. The GMB and Unite unions have accused contractors of failing to pay the bonuses predicted in the construction agreement for the new nuclear plant in Somerset. The unions argue that the rate offered by the BYLOR con- sortium – made up of Bouygues TP and Laing O'Rourke – is not sufficient to attract the calibre of workers needed to ensure that the £18 billion project is built on time. They said the other employer, Kier Bam, is not cur- rently at the negotiating table. The unions will hold a consultative ballot on industrial action among the 700-strong workforce preparing the ground- works for the nuclear plant between 2 and 5 May. ELECTRICITY Batteries deployed at ten solar farms Battery storage systems have been deployed at ten solar farms in Britain owned by infrastruc- ture investor Ancala Partners. The portfolio, which was installed with the help of stor- age provider Anesco, can store 12MWh of power and has a maximum output of 11MW. As well as being used to store surplus energy from the sites until it is needed, the batter- ies will provide balancing and frequency response services to National Grid. Anesco this month revealed plans to develop the largest bat- tery portfolio in the UK by 2018. Distributed generation: unfair advantage Stock watch SSE SHARE PRICE, FIVE DAY Shares in SSE and Centrica – the big six suppliers with the greatest exposure to the UK market – took a tumble on Monday aer work and pensions secretary Damian Green confirmed that the Conservatives would introduce a cap on standard variable tariffs if the party won the upcoming election. In the opening hours of trading, SSE's share price dropped nearly 4 per cent to 1,393 pence, while Centrica's fell more than 5 per cent to 197p. Both have made recoveries since. 1,460 1,440 1,420 1,400 1,380 20 Apr 21 Apr 24 Apr 25 Apr 16 | 28TH APRIL - 4TH MAY 2017 | UTILITY WEEK CENTRICA SHARE PRICE, FIVE DAY 215 210 205 200 195 20 Apr 21 Apr 24 Apr 25 Apr pence pence

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