Utility Week

UTILITY Week 26th May 2017

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4 | 26TH MAY - 1ST JUNE 2017 | UTILITY WEEK National Grid sees strong profits growth National Grid reported strong profit across most business areas in its financial results for the year ended March 2017. £4.6bn Adjusted operating profit for the group. £1.4bn Adjusted operating profit for electricity transmission. £551m Adjusted operat- ing profit for gas transmission. 53% The dip in adjusted operating profit from "other activi- ties", including its Kent LNG terminal and Anglo-French interconnector. See news, p15 £4.5bn Record annual capital expendi- ture recorded in 2016/17. STORY BY NUMBERS Seven days... National media Energy shares jump on Tories' probe promise Conservative plans for a probe into energy costs boosted the share prices of power companies last week and triggered warnings that the proposal could backfire by help- ing to justify price hikes. British Gas owner Centrica and the other major stock market quoted power firm SSE both saw their shares jump aer the Tory manifesto was published. Despite at first appearing to be a crackdown on energy groups, the Conservatives' plans for a review of "the cost of energy" were cheered by executives and City analysts who believe an independent review will be a vindication of price rises. Daily Mail, 21 May Switching water could save firms £200m Businesses in England could collec- tively cut their water bills by nearly 10 per cent or £200 million a year by switching their suppliers, according to consultant Utilitywise. It said that since the water market was deregulated on April 1, it had had more than 50,000 enquiries from businesses about switching supplier, an increase of 740 per cent from the months prior to the changes. Sunday Express, 21 May Shale drilling could become a 'permitted development' Local authorities would be stripped of powers to block drilling for shale gas in the countryside under Conservative plans to copy the US and make Britain less reliant on imported energy. Shale companies could under- take "non-fracking drilling" under permitted development rights, the party's manifesto said. They would not need to make a formal planning application and could start drilling more quickly. The Times, 19 May Energy UK welcomes Tories' diluted price cap pledge E nergy UK chef execu- tive Lawrence Slade has welcomed wording in the Conservative manifesto which suggested the party's threatened energy price cap would be lim- ited to specific customer groups. "Targeting support for vul- nerable customers and making sure the market works fairly for everyone are the right priorities, and the industry is absolutely committed to working with government and the regulator to achieve this," he said. Before the publication of the manifesto, senior Conservatives had suggested that price regula- tion in the domestic energy mar- ket would extend to 17 million consumers and result in a £100 annual saving per household. The manifesto commit- ment was considerably soer, however, pledging to "introduce a safeguard tariff cap that will extend the price protection cur- rently in place for some vulner- able customers to more custom- ers on the poorest value tariffs". For other consumers, the Conservatives will "maintain the competitive element of the retail energy market by supporting initiatives to make the switch- ing process easier and more reliable". Energy UK's relief at the ton- ing down of threatened market interventions was echoed by many energy suppliers, although one big six executive told Util- ity Week they were concerned about the implications of plans to extend a price cap to micro - business customers. With regards to other energy commitments in the manifesto, Energy UK urged a Conservative government to be swi in carrying out a promised review of energy costs in order to "provide policy clarity to the investment community". It also pleaded for "an honest debate around the costs of decarbonisation, tackling fuel poverty, how to target support for the vulnerable and deliver security of supply – and how these are to be paid for". JG "Labour's policy pledges could reduce much- needed investment in the sector" Phil Grant, energy partner, Baringa Partners

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