Utility Week

UTILITY WEEK | 3RD - 9TH NOVEMBER 2017 | 15 This week Onshore wind 'ban' could cost £1 billion Government's "effective ban" on onshore wind "looks increasingly perverse", says ECIU director The government's reluctance to support onshore wind could cost the UK £1 billion over the next four or five years, according to a new report. The report, published by the Energy and Climate Intelligence Unit (ECIU), argues that onshore wind is cheaper than offshore wind, nuclear and biomass plants. It put the cost of 1GW of new onshore wind at £30 million a year less than offshore wind, and £100 million less than a new nuclear or biomass plant. The numbers are based on currently available turbine technology and "almost certainly an underestimate", as turbines are becoming more efficient. The report also pointed to onshore auctions this year across Europe, where prices have gone as low as €43 per MWh. "In both Spanish and German auctions, there was a backlog of pent-up demand, as there is currently in the UK, and bidders were able to take advantage of the latest technology on the market," the report declared. It cited the Bright Blue think-tank study, published earlier this year, which showed that 59 per cent of Conservative voters back onshore wind, providing local communities have their say and there is no subsidy. The ECIU's director, Richard Black, said that the government's "effective ban" on onshore wind "looks increasingly perverse". He added: "For a government committed to making energy cheaper, this risks not only locking people into higher bills, but also runs contrary to its aim of having the lowest energy costs in Europe. These blustery isles have no shortage of wind." JH ENERGY DCC busts costs forecast by 48% The Data Communications Company (DCC) spent £210.8 million connecting smart meters with suppliers during 2016/17 – 48 per cent more than forecast last year, according to this year's Ofgem price control review. The forecast for total costs over the licence term has also soared by 27 per cent to £2,681 million. Ofgem said the rise resulted from moving to a two-stage release for live services, driven by updating meter specifications for security reasons, and capability expansion such as SMETS1 enrolment. The review raised concerns about resource efficiency and mistakes in external contract management. Ofgem has deemed £1.171 million of DCC's total costs for 2016/17 unacceptable and plans to refuse a £71.295 million hike in the forecast for the rest of the licence term. ELECTRICITY Vattenfall wind takes a dive in Q3 Swedish energy company Vattenfall has reported an underlying operating loss in the third quarter at its wind division. The company's interim results show the division made an underlying operating loss of 300 million SEK (£27 million) between July and September following "strong results" in the first nine months of this year. It blamed the downturn on grid outages and cable issues. The wind division has still made an underlying operating profit of 752 million SEK since January, compared with 480 million SEK in the same period last year. ENERGY Open Utility snaps up e-trade funding Open Utility has been awarded £412,500 by the Department for Business, Energy and Industrial Strategy to develop an online trading platform for local flexibility. The marketplace will facilitate the active management of local grids by distribution network operators (DNOs) – a key element in their transformation into distribution system operators (DSOs). "As the energy system evolves into one that is decentralised and decarbonised, the role of the local distribution companies will change fundamentally," said former SSE chief executive and Open Utility investor Ian Marchant. "Local and peer- to-peer energy and flexibility markets will play a leading role in this change." The company said the platform will help DNOs engage with customers and encourage flexibility tender participation. Onshore wind is much cheaper than alternatives Stock watch 805 795 785 775 SEVERN TRENT SHARE PRICE, TWO-DAY PENNON SHARE PRICE, TWO-DAY Shares in Severn Trent shot up to 2,126 pence per share at 10am on 31 October, aer closing at 2,087p the previous day, as Ofwat announced it would reward the company with £38.4 million for outperforming its outcome delivery incentives target on sewer flooding. Despite news of a hey £2.09 million fine for South West Water, shares in its parent Pennon also rose, from 786.50p at close of trade on 30 October to 803.50p at 8am on 31 October. 2,130 2,115 2,100 2,085 2,070 30 Oct noon 31 Oct noon 27 Oct noon Finance & Investment 30 Oct noon 31 Oct noon 27 Oct noon

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