Weekend Press: Energy efficiency taskforce axed after four meetings

In our latest round-up of the weekend’s national news coverage, the government’s energy efficiency taskforce, charged with reducing the UK’s energy use by 15% by 2030, has been scrapped after just six months and four meetings. Elsewhere, the Renewable Energy Foundation (REF) alleges that consumers have effectively overpaid hundreds of millions of pounds for the Moray East wind farm in north-east Scotland, Southern Water faces legal action over floods and Bill Gates raises concerns that his nuclear firm is to be snubbed in the UK modular reactor race.

UK ministers scrap energy efficiency taskforce after six months

The government’s energy efficiency taskforce, charged with reducing the UK’s energy use by 15% by 2030, has been scrapped months after it was established.

The group, which was overseeing an initiative to insulate homes and upgrade boilers, was announced by the chancellor, Jeremy Hunt, in his autumn statement last year as part of plans to boost investment in energy efficiency.

Since it was set up in March, its membership – which included the UK’s infrastructure chief, Sir John Armitt – has met four times.

It was chaired by the energy efficiency minister Lord Callanan and former NatWest chief executive Dame Alison Rose.

Rose resigned from the banking group in July after a row over the closure of Nigel Farage’s accounts with the private bank Coutts.

She quit the taskforce the same month, after a request from then energy security secretary, Grant Shapps.

But, as first reported by the BBC, a letter was sent to members of the group on Friday in which Callanan said Rose would not be replaced and the group would be dissolved.

He told members their work had been “hugely valuable” but would be “streamlined” into other government activity.

Downing Street was directing inquiries to the Department for Energy Security and Net Zero.

In a statement, a spokesperson for the department said it would “like to thank the energy efficiency taskforce for its work in supporting our ambition to reduce total UK energy demand by 15% from 2021 levels by 2030”.

The move follows the decision by the prime minister, Rishi Sunak, to water down key green measures earlier this week.

In one of his biggest policy changes since taking office, Sunak confirmed he planned to push back the deadlines for banning the sale of new petrol and diesel cars and the phasing out of gas boilers.

His announcement was met with despair by climate scientists and environmental experts, who said it would cost consumers more in the long run and threaten the UK’s global leadership on the issue.

Confirming its formation in March, the government said the taskforce had been established to support “a step change in the reduction of energy demand through accelerated delivery of energy efficiency measures across the economy”.

It described its 15 members as “a stellar team of leading experts” who would “bring together a vast wealth of knowledge to deliver on the government’s ambitious commitments”.

As part of a press release, Callanan added that the government had “scoured the UK’s industry to amass a top team of the best and brightest”.

“We firmly believe the will of people and industry to drive down energy use is there, but we need to put in place the right mechanisms to channel this,” he added.

“That means smart investment, effective engagement, and building the right skills base – and this is precisely what the taskforce will be focusing on.

Alongside Armitt, members included head of housebuilder Barratt Developments, David Thomas, and experts from the University of Salford, the UK Green Building Council and National Energy Action.

It was set to devise a plan to reduce energy demand across domestic and commercial buildings and industrial process, while cutting down energy bills and helping to push down inflation.

This included accelerating household insulation and boiler upgrades.

The Guardian

Wind farm accused of using loophole to pull in £647m

An offshore wind farm in Scotland has netted £647 million through a net zero loophole and by receiving payments when not producing electricity, a think tank has claimed.

The Renewable Energy Foundation (REF) alleged that consumers had effectively overpaid hundreds of millions of pounds for the Moray East wind farm in north-east Scotland as a result.

Moray East comprises 100 9.5MW turbines in the Moray Firth and is majority-owned by Ocean Winds.

According to analysis by the REF, between June 2021 and July 2023 it received more than £1.1 billion.

However, the think tank believes that a substantial proportion of that income is likely to be derived from controversial features of the energy system.

Moray East was originally awarded a contract for difference (Cfd) with a guaranteed but capped price of 57.50 per MWh in 2012 prices – about £74.49 in current prices.

However, the wind farm has exercised a power granted by the Government to postpone the start of the contract, meaning it has benefited from much higher market prices following the invasion of Ukraine.

The REF estimates that had Moray East implemented its CfD and delivered electricity at the contracted price it would have received £350 million, with the consumer receiving the difference of about £460 million.

At the same time, the wind farm has received payments for cutting its output at times when its electricity cannot be used locally or transmitted to other areas of the country because of grid congestion.

However, the Government has said that grid constraints are a natural part of an efficient electricity system and that “constraint payments” are used around the world.

Dr John Constable, the REF’s director, said: “The UK’s approach to renewables has resulted in unjustifiably high costs to consumers, but the multitude and complexity of the revenue streams available to generators has concealed this fact. Government needs to be honest with the public.”

A spokesman for Ocean Winds said: “Moray East remains on course to start its CfD within the contractual terms set by the process and has always acted in accordance with this agreement.”

A spokesman for the Department for Energy Security said: “It is not in the spirit of the scheme for generators to delay their start date to increase revenue.

“We have made changes to the scheme to ensure this is not possible for projects from round five and beyond.”

The Telegraph

Water companies ‘need single social tariff in England and Wales’

Ministers and under-fire water companies are facing renewed pressure to introduce a single social tariff to support vulnerable households as struggling consumers face an “unfair postcode lottery” when paying their bills.

At present, water companies in England and Wales all offer their own social tariffs, which provide discounts to hard-up consumers. However, some schemes are far more generous than others.

The Consumer Council for Water (CCW) on Sunday argued that a “fairer and more consistent” scheme with a central pot of funding – contributed to by all water companies – would help a greater number of people.

The cost of living crisis has put pressure on every element of household finances, from groceries to energy bills. Water bills are expected to rise over the next five years as companies tap consumers to recoup investment to improve crumbling infrastructure.

Analysis shows up to 2m households could benefit from the introduction of a standardised scheme to cut water bills for consumers in poverty. The CCW argued that such a move would eradicate water poverty, which is defined as anyone spending 5% or more of their household income on water bills after housing costs.

Water companies are preparing to submit their business plans for 2025 to 2030 to the industry regulator, Ofwat, early next month. Ofwat will then examine the plans to determine how much water suppliers can charge customers, and publish its final decision on the “price review” in December 2024.

It had been hoped a single social tariff could be introduced before the price review was complete. That now appears unlikely. Industry sources said the government had cooled on the idea – which had the backing of most water companies – since moves to examine how it could be implemented began last year.

The water industry is under intense scrutiny over a series of issues, including sewage dumping, leaks, executive pay and debt levels.

It is understood that some companies resisted a uniform social tariff as it would effectively mean subsidising companies in other regions that need to make larger investments.

Separately, calls for social tariffs in the energy industry have received support from campaign groups, regulators and suppliers but the government appears to have abandoned the idea.

Andy White, senior leader for social policy at the CCW, told the Guardian: “Customers want to see investment from water companies but that has got to come hand in hand with a stronger safety net for low-income households that will not be able to afford these looming [bill] increases.

“A fairer and more consistent single scheme with a central funding pot would allow financial support to flow to where it’s needed and not be constrained by water company boundaries. The existing postcode lottery is unfair and unsustainable and it should not be for water company boardrooms to determine financial assistance for an essential utility where people have no choice over their supplier.”

A study by economics consultancy CEPA showed that 12% of customers served by supplier Hafren Dyfrdwy, which covers north-east and mid Wales, are in water poverty, with 10.5% for United Utilities, which covers north-west England. Thames Water, the heavily indebted supplier to London and its surrounding area, had 3.6%.

Last week, Lord Hollick, chair of the industry and regulators committee in the House of Lords, said members of the committee were “disappointed” that the government had not advanced plans for a single social tariff.

In a letter to the environment secretary, Thérèse Coffey, he said the current system meant that the differences between social tariffs offered by water firms meant that “support remains a postcode lottery at a time when financial pressures on households are increasing”.

Hollick said the committee was “concerned” that “the government will only be providing standardisation through guidance, especially given low levels of public trust in water companies”. He urged the government to announce its proposals on social tariffs “as soon as possible”.

A Defra spokesperson said: “Water companies should assist customers through social tariffs and other measures and we’re working with industry to explore options to make improvements, including on consistency and fairness across existing regional social tariff schemes.

“We have also been clear with water companies that we expect them to deliver the necessary improvements to tackle pollution and secure supplies for the future, without unduly impacting customers’ bills.”

Guardian

Hastings council may seek compensation from Southern Water over floods

Hastings Borough Council is considering asking Southern Water for compensation for several flooding incidents in the last two years.

A report being presented to the council’s cabinet on 2 October suggests legal action against the water company if there was not a satisfactory reply to its concerns by 31 December.

The report said the floods have harmed the town’s reputation with tourists.

Southern Water said it was committed to improving its performance in Hastings.

The council’s report highlighted incidents in Bulverhythe in 2021, at the Pelham outfall in 2022 and in the town centre in January.

The report calls on the Southern Water to publish details of its plans for Hastings, and “to financially compensate the council for the infrastructure failures which have had a significant impact on the reputation of Hastings as a tourist destination.”

The report said that if “a satisfactory response is not received by 31 December” the council will “consider what action might be taken, to include the consideration of legal action”.

Priory Meadow shopping centre was closed after being flooded in JanuaryIn July 2022 the Full Council passed a motion calling for the authority to hold Southern Water to account.

Paul Barnett, leader of the council, said: “Over the last few years there have been several serious incidents involving Southern Water which have caused considerable concern to our residents.”

A spokesperson for Southern Water, said: “We understand the concerns of customers and stakeholders in Hastings and know there have been areas of our performance in this area which have not been good enough.

“We are fully committed to improving our performance and communications with customers and stakeholders in Hastings.

“As part of this we’re organising a community drop-in event in October where we will have a number of our teams in Hastings on hand to talk to customers and stakeholders about any issues they have.”

BBC

Bill Gates’ nuclear firm Terrapower fears falling behind in SMR race

A row is brewing between a nuclear energy company founded by Bill Gates and the UK government over fears it may be sidelined from a £1 billion competition to build new small power plants.

The billionaire philanthropist is the chairman of Terrapower, which fears exclusion from the race to build the next generation of reactors over questions about its fuel source, according to people familiar with the matter.

In May, The Sunday Times revealed that Terrapower had joined the likes of Rolls Royce, GE-Hitachi and Bechtel in the running to manufacture Britain’s future nuclear infrastructure.

But Terrapower is concerned that the government is prioritising so-called small modular reactors designed by its rivals, rather than Terrapower’s model, which uses more innovative technology and is classed as an “advanced modular reactor”, sources said.

Terrapower’s reactor, called Natrium, uses high-assay low-enriched uranium (HALEU) as fuel. Officials are said to be concerned that it does not have reliable supplies to import at scale, as most of it is produced in Russia.

The company, which has won US government funding, says it is developing supplies in America. Terrapower said: “Truly next-generation reactors, like Natrium, will use HALEU fuel because of its efficiency and lower volume of spent fuel waste. Investing in last-generation technology prohibits realising these significant advances.”

A government spokesman said: “Great British Nuclear is assessing the bids received as part of the latest phase of the competition launched earlier this year and will announce an update in due course.”

Gates will meet Rishi Sunak next month to discuss climate change, but will not be acting on behalf of Terrapower.

The Times

Cheltenham gas leak shows dire state of energy sector – Green Party

A gas leak that could be seen from space is an example of the “dire state of the UK’s energy sector”, the Green Party says.

The methane leak occurred at a gas main operated by Wales and West Utilities in Cheltenham in March.

The amount leaked could have powered 7,500 homes for a year.

Green Party representatives in Cheltenham said it could have been avoided if energy firms prioritised repairs over shareholder dividends.

The leak was detected by University of Leeds in March with the help of specialist satellites.

Daniel Wilson, the Green Party’s parliamentary candidate for Cheltenham, said the methane leak was “just another example of the dire state of the UK energy sector”.

“The people of Cheltenham pay ever higher energy bills just to see failures like this happen in our area,” he added.

“Such events could be avoided if repairs were conducted before energy company shareholders were paid dividends. Why are those companies not being forced to invest in the supply infrastructure?

“This in turn would create jobs and stop events like this being repeated. It is time to consider, as the Green Party proposes, renationalising our utilities.”

A Wales and West Utilities spokesman said: “We are driven by quality and safety improvements, and since 2002 have committed to investing in a 30-year programme to upgrade old metal pipes at a cost of £1.4m every week which so far has removed 3m tonnes of carbon.

“With over 35,000km of pipes, our mains replacement programme is a significant undertaking but it is necessary to sustain and improve the integrity of the network and to prepare for the future delivery of greener alternatives to natural gas including biomethane and hydrogen.”

BBC

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.