Utility Week

Utility Week 23 06 17

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12 | 23RD - 29TH JUNE 2017 | UTILITY WEEK Policy & Regulation Reshuffle New climate change minister: Claire Perry New climate change minister Claire Perry is from the 2010 intake of MPs to Westminster. She is also a 'green Tory', calling climate change "one of the most serious threats that we face". In a blog post, published in February last year, Perry backed the inclusion of an "ambitious set of targets" in the fih carbon budget, prior to its adoption in July. To achieve those targets, she wrote that it was "only fair to expect bill payers to support low carbon power as long as costs are controlled". Perry is also supportive of the development of Hinkley Point C. E xactly one year ago the UK was plunged into political and economic uncertainty following a knife-edge EU referendum vote that delivered a destabilising outcome. Twelve months on, anyone could be forgiven for thinking that nothing has changed. So has the utility world ground to a halt? Far from it – it has very much kept turning, and the past year has seen many significant events or milestones reached, with a number of significant corporate transactions, the incessant rise of new technologies and an ever-changing generation mix. One of Theresa May's first acts as prime minister was to green light Hinkley Point C following EDF reach- ing its final investment decision. Two months later, in November, we saw the collapse of a UK energy supplier for the first time in years when GB Energy Supply ceased trading. The company's failure was apportioned to rising wholesale prices, which necessitated tariff increases, and now the looming prospect of a legislated price cap. The year saw Drax buy Opus Energy in the most significant acquisition of a retail business in recent times while many of the larger suppliers have expanded into broader energy services – EDF's acquisition of Imtech and Engie's acquisition of part of Keepmoat's business being prime examples. Overseas investors are clearly still comfortable invest- ing in the UK energy industry despite a rapidly chang- ing generation mix and political upheaval. The 21 April 2017 marked the first day since 1882 on which there was no coal generation on the UK power system, and just a couple of weeks ago the UK set a new renewable energy record as zero carbon power (wind, solar and nuclear) met more than 50 per cent of power demand for a period around lunchtime on 7 June. This was no doubt aided by installed UK solar capacity passing 12GW during the past 12 months, when five years ago it stood at barely 1GW. Meanwhile, figures released by the EU on 1 June 2017 noted that while UK greenhouse gas emissions fell significantly in 2015, those in the rest of the EU rose. Of course, none of the above are consequences of impending Brexit but they do paint a fascinating back- drop against which the UK's exit from the union will occur. The UK energy market in the past 12 months has reflected the momentum that has built up through policy interventions, technological advances and consistent financial investment in the preceding years. The system is becoming less predictable, increasing the need for plant that can deliver system services and leading to the rapid emergence of battery storage (for example in the December 2016 capacity market auction), and with wholesale prices that are increasingly volatile. However, the UK has plotted a course that is deliver- ing a more diverse, sustainable and innovative system, and in many respects it is in the vanguard of European action on market liberalism, investment and emissions reduction. Column Tony Ward, Head of power and utilities, EY The energy sector has so far not felt any ill effects from the Brexit vote. Who's in, who's out? L icking her self-inflicted wounds aer the June gen- eral election, Theresa May wasted little time initi- ating a reshuffle which attempted to rebuild her reputation with her party, and the public. For utilities, the reshuffle has brought one major change, but more junior job switches. Here's a brief review of who's in and who's out in key departments: Defra l Michael Gove became secretary of state, replacing Andrea Leadsom, who is now promoted to leader of the House l Theresa Coffey, remained as environment minister l Lord Gardiner of Kimble keeps his role as parliamen- tary under secretary BEIS l Greg Clark remains as secretary of state l Lord Prior of Brampton, stays as parliamentary undersecretary l Margot James keeps her role as parliamentary under secretary, small business, consumers and corporate respon- sibility l Claire Perry joined the department as minister for climate change, replacing Nick Hurd l Richard Harrington replaced Jesse Nor- man as BEIS minister Coffey Lord Gardiner Clark James

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