Utility Week

UTILITY WEEK | 8TH - 14TH DECEMBER 2017 | 11 Policy & Regulation This week Concerns for energy security after Brexit Supply worries centre on the ability to finance 16GW of new gas and electricity interconnectors More than half of the organisa- tions in the UK's energy sector expect the country's energy security to be undermined fol- lowing withdrawal from the EU, according to a new survey. A report into the sector's perceptions of Brexit's impact, carried out by law firm Shake- speare Martineau, says supply security concerns centre on worries about financing the 16GW of new gas and electricity interconnectors planned between the UK and the EU. "Depending on what the post-Brexit future looks like, it could become more difficult to access power from Continental Europe," the report said. Nearly three-quarters (72 per cent) of energy organi- sations surveyed said they believe investment in UK- based renewable energy projects and other low-carbon technologies will decrease aer Brexit, with only 9 per cent expecting it to increase. A bigger proportion (76 per cent) said they expect investment in UK-based clean technology research and development initiatives would also suffer following the UK's withdrawal from the EU. Overall, the research shows UK-based energy organi- sations are pessimistic about Brexit, with 74 per cent thinking it will have a negative impact on their organisa- tions, compared with 19 per cent of respondents from the non-UK panel. Only 7 per cent of UK organisations think Brexit will have a positive effect. The report said: "Despite potentially freeing them from EU regulatory controls and reducing red tape, UK-based organisations are concerned that Brexit will threaten EU and private sector capital funding for existing and future energy projects." DB WATER Productivity higher since privatisation Productivity in the water sector has seen a 64 per cent improve- ment between 1994 and 2017, according to a new report commissioned by Water UK. Water UK engaged Frontier Economics, working with profes- sor David Saal of the Centre for Productivity and Performance at Loughborough University, to "assess what has happened" to productivity since privatisa- tion. The study found water and sewerage company productivity in England grew annually by an average of 2.1 per cent, "based on relatively cautious" assump- tions on the improvements in the quality of service provided. While annual productivity was shown to fluctuate from year to year, the report suggested "estimated cumulative produc- tivity" depicted an upward trend "over almost the whole period". Water UK chief executive Michael Roberts said: "Produc- tivity growth matters, since it determines both the level of bills people pay and the quality of services they receive." ELECTRICITY No timetable given for tidal lagoon Greg Clark has refused to com- mit to when the government will press ahead with delayed plans for the Swansea Bay tidal barrage and a new fleet of mini- nuclear reactors. When pressed last week on the timing of both initiatives while being cross-examined by the House of Commons Busi- ness, Energy and Industrial Strategy select committee about the industrial strategy, the business and energy secretary admitted the department did not "have a particular date in mind". Clark said the announcement "won't be much longer" and "dis- cussions are proceeding well". ENERGY Aim to boost heat networks in capital New developments in parts of London earmarked as Heat Network Priority Areas should be designed to hook up to future connections, according to the capital's new plan. The London Plan says where schemes are currently beyond the reach of existing heat networks, connections to future extensions should be facilitated. This could include allocating space in plant rooms for heat exchangers, safeguarding suitable routes for pipework and making provision for con- nections at the site boundary, according to the blueprint for the capital's development that has been put out for a three- month consultation by London mayor Sadiq Khan. Brought down: majority pessimistic about Brexit Political Agenda David Blackman "Retaining membership of the IEM would be welcome" Let's hope the lunch was of a high standard, because Theresa May got little else out of her meeting with European Com- mission president Jean-Claude Juncker in Brussels on Monday. Hopes had been high that the lunch would see resolution of the Irish border issue, which had emerged as the main point standing in the way of agreement over the UK's EU divorce deal. However, as Utility Week went to press, Northern Ireland's Democratic Unionist Party was This in turn would open the prospect of the UK being able to retain its membership of the internal energy market (IEM). This outcome would undoubt- edly be welcome to utilities. However, participation in any aspect of the single market, of which the IEM is a part, is intimately linked to continued freedom of movement across the trading bloc. Given that May has vowed to withdraw the UK from this regime, it is hard to see how she could accept this outcome. sticking with its insistence that Ulster and the UK should con- tinue to enjoy the same trading relationship with the EU. This matters for energy because it is one of the areas covered by the Good Friday peace agreement. May's problems have been further complicated by the leaders of the other devolved administrations in Scotland and Wales demanding that Northern Ireland should not be given special treatment. One possible solution, which has been touted since Monday's breakdown, is for an alignment of the regulatory frameworks in the Good Friday areas between the EU and the UK as a whole.

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