Weekend Press: Miliband vows to scrap 2035 ban on new gas boilers

In our latest round-up of sector coverage in national media, the Labour Party defends its energy plans, there is concern about the planning process stalling renewables development and new figures show there were an average of five serious sewage spills into rivers or seas every day over the past decade.

Miliband vows to scrap 2035 Tory ban on new gas boilers

Labour will scrap the Tory party’s 2035 target to ban new gas boilers, Ed Miliband has pledged.

In an interview with The Telegraph, the shadow energy secretary said no one will “be forced to rip out their boiler” under Labour’s plans for reaching net zero targets.

Instead, Mr Miliband will focus on financial incentives to encourage more people to install heat pumps.

Home heating accounts for around 14 per cent of the UK’s emissions, with the vast majority of homes using gas boilers, which both parties want to see replaced with heat pumps.

Rishi Sunak said in September last year that most homeowners would “only ever have to make the switch when you’re replacing your boiler anyway, and even then, not until 2035”.

In contrast, Labour say they are less focused on dates for a ban rather than providing incentives for people to adopt heat pumps.

Mr Miliband said: “On home heating – as we said in our manifesto – no one’s going to be forced to rip out their boiler. We’re absolutely clear about that.

“We haven’t stuck with the Government’s 2035 target when you can’t replace your gas boiler. I know that we’ve got to show that heat pumps are affordable and are going to work for people.”

Mr Miliband said that the decline of the North Sea means the UK must find new ways to generate electricity, warm homes and power industry or risk becoming more dependent on foreign energy imports.

Claire Coutinho, the Energy Secretary, has warned that Labour’s pledge to convert Britain to clean power by 2030 – five years earlier than the Conservatives – risks blackouts and public unrest.

Britain consumes around 75bn cubic metres of gas a year, equivalent to 1,100 cubic metres per person. About a third of that is used to generate electricity and a similar amount for heating homes.

Mr Miliband said heat pumps, which run on electricity, had emerged as the key alternative to gas boilers – and he would seek ways of generating a surge in installations if Labour got into power.

Heat pumps work like a fridge in reverse, drawing energy from the air or the ground before it is compressed to heat water for radiators and taps. They heat up radiators at a slower rate than gas boilers, so work best if left on at a steady temperature. They are most efficient in homes that are well insulated, or with larger radiators, which can increase installation costs significantly.

He added: “I’ll be honest, I think one good thing the current Government did, among a number of bad things, was to increase the heat pump grant to £7,500.”

The Boiler Upgrade Scheme, introduced by Rishi Sunak, provides eligible households with up to £7,500 to cover the cost of installing a new heat pump. The Sunday Telegraph understands one way that Labour could encourage households to install a heat pump is by extending the existing grant to millions more homes.

Mr Miliband – who is standing for re-election in his Doncaster North seat, where he had a majority of just 2,370 in 2019 – said he had installed a heat pump, backed up by batteries, in his own home, but he recognised that many households were hesitant. The cost of a heat pump alone is an average of between £10,000 and £12,000, compared with a gas boiler which typically costs between £2,000 and £3,000.

The current subsidy system has just £450m of funding, covering the cost of only 90,000 homes, but the Climate Change Committee, the Government’s climate watchdog, says 600,000 heat pumps will need to be installed every year by 2028 in order to hit net zero targets.

However, expanding the scheme would be costly to the taxpayer so Mr Miliband said Labour is exploring ways to bridge the finance gap and sharply accelerate heat pump installations, as well as trying to build public confidence in low carbon technologies.

Alongside extending subsidies, Labour plans to back the creation of green mortgages, which could see homes granted more favourable rates for putting in insulation or heat pumps. Other ideas have included changes to stamp duty or council tax to reward householders who install energy saving or emission reduction measures.

Labour has also committed to doubling the current funding for green homes with an extra £6.6bn, including schemes to upgrade insulation in draughty homes, the installation of solar panels and home batteries.

The party will also reintroduce requirements for all landlords to upgrade energy efficiency to at least the level of an Energy Performance Certificate C by 2028, a pledge that was abandoned by the Tory party.

The Conservatives have not yet put forward legislation on the 2035 date, meaning Labour would not have to scrap any existing laws, and the party has not ruled out introducing a ban in the future.

A key vehicle for Mr Miliband’s plans will be Great British Energy which will use £8bn harvested from taxing the UK’s offshore oil and gas industry to invest in green technologies – especially riskier ones such as tidal projects and floating wind.

In the full interview, Miliband discusses other Labour pledges, including planning reform to boost onshore wind development

The Daily Telegraph

Labour’s net zero grid will require ‘huge sacrifice’, warns energy chief

Labour’s plan for a net zero grid by 2030 is unrealistic and will require a “huge sacrifice” by the country, a leading power station builder has warned.

Javier Cavada, European boss of Mitsubishi Power, said the rollout of green energy schemes planned by Sir Keir Starmer and Ed Miliband, the shadow energy secretary, would have to move at an unprecedented speed to stand a chance of success.

He also warned it would be prohibitively expensive and questioned whether completely eliminating emissions from gas-fired power plants, which generated one third of Britain’s electricity last year, was a sensible immediate priority.

Asked whether the 2030 target was feasible, Mr Cavada said: “In my years at Mitsubishi and, frankly, my 48 years on the planet, this would be a speed that I have never seen anywhere else.

“Can you do it? You definitely can. But financially? Well, the cost is very large.

“Can the whole country invest into fully decarbonising and can all the industries invest in that? Is everyone so wealthy and so happy to increase the cost of everything?

“You need to create a path that is realistic, that is affordable and is achievable.”

Higher spending on the energy system raises the prospect of households and businesses shouldering increased costs through taxes or bills.

Labour has insisted its plans are deliverable and will ultimately bring energy bills down.

In an interview with The Telegraph, Mr Miliband said he believed the 2030 target was achievable and was a crucial part of the drive to net zero.

The Labour manifesto pledges to retain a strategic reserve of gas power stations “to guarantee security of supply” and says it will partly fund green investments by expanding the windfall tax on oil and gas companies.

Electricity demand is expected to rise from around 300 terawatt hours per year today to about 360 terawatt hours by 2030.

The bulk of Britain’s future supplies are forecast to come from weather-dependent renewables such as wind and solar farms, backed up by batteries and nuclear power, but gas-fired power stations will still be needed at certain times to keep the lights on.

However, instead of seeking to eliminate their emissions completely by 2030, Mr Cavada urged future governments to proceed more gradually by blending hydrogen into their fuel.

Mitsubishi Power believes existing gas turbines could burn gas that is 30pc hydrogen with only minor modifications.

Mr Cavada admitted that supplies of hydrogen were currently small and highly expensive as well, but argued that – as with wind and solar power – costs would fall as production was scaled up.

Daily Telegraph

Bulk of UK renewables projects fail to get beyond planning stage

The majority of Britain’s onshore renewable energy projects are failing to get beyond the planning stage, according to analysis that highlights the challenges the country still faces in hitting its clean energy targets.

Sixty-three per cent of the roughly 4,000 applications submitted for wind, solar and battery projects between 2018 and 2023 have been refused, abandoned, withdrawn, or had their planning permission expire, according to Cornwall Insight, an energy consultancy.

A further 18 per cent have been sent back for revision, leaving only a fifth of projects either waiting for a planning decision or ready to be built.

Both the Conservative and Labour parties have promised planning reforms ahead of the general election on July 4, with the Tories pledging to cut from four years to one the typical time it takes to sign off major infrastructure projects.

“The UK has set ambitious targets to boost renewable energy capacity,” said Lucy Dolton, assets and infrastructure manager at Cornwall Insight. “These figures reveal a substantial shortfall in meeting these targets, something which is largely driven by the slow pace of progress in deploying renewable energy projects.”

The findings, shared with the Financial Times, come as the UK is under pressure to rapidly increase renewable energy capacity to meet its legally binding goal of cutting carbon emissions to net zero by 2050, and decarbonising the electricity system well before then.

The low rate of successful projects partly reflects a surge in speculative applications, according to researchers at Cornwall Insight, as developers submit multiple plans on the expectation that not all will succeed.

Developers complain that the planning system does not have enough resources to deal with the rising number of applications, while lengthy waits to get connections to electricity grids can stall projects’ progress through the approval process.

Nathan Bennett, at trade group RenewableUK, added: “There is a UK-wide resourcing challenge, a lack of people able to process consents in a timely manner.”

The analysis, which covers England, Scotland and Wales, showed a sharp annual rise in planning applications for renewable projects in recent years, with 66 per cent more applications in 2023 than in 2022.

At a regional level, 37 per cent of battery projects that applied for planning permission in the north-west were either waiting for a decision or ready to be built, compared with 19 per cent in the south-east. For solar projects in the south-west, the figure was 68 per cent.

The Financial Times

Water company plans £89m shareholder payout despite sewage conviction

One of Britain’s biggest water companies is planning to pay shareholders a near-£89m dividend despite being convicted earlier this month for failing to provide records related to its sewage works.

Anglian Water, which has more than 6m customers in the East of England and Hartlepool, announced the payout in its latest results earlier this month, just weeks after it was convicted by the Environment Agency.

The supplier was found guilty by Peterborough Magistrates’s Court of not complying with a requirement to provide financial records for its wastewater treatment works, with sentencing to be confirmed next month.

A spokesman for the Environment Agency confirmed that Anglian’s maximum punishment is an unlimited fine.

The verdict came after Anglian Water was fined £2.65m in May last year for allowing untreated sewage to overflow into the North Sea in 2018. However, the fine was later reduced to £300,000 by a judge.

Despite this, Anglian Water has laid out its plans to reward investors with an £88.6m dividend this month, which is higher than the £79.9m handed out in 2023.

Details of the payment were contained in the latest filings for the foreign-owned business, which is divided across a sprawling network of different entities.

The board said it had approved the dividend after assessing a range of matters, including “service delivery for customers and the environment”.

Following its conviction, the Environment Agency said it had brought the case against Anglian as part of a “wider criminal investigation involving all 10 water companies into potential non-compliance with environmental permit conditions at over 2,000 wastewater treatment works”.

This forms part of a broader clampdown on the water sector, which is under increasing scrutiny amid rising sewage spills and leakage problems.

To tackle the problem, water companies are currently seeking to increase household bills to boost investment. This includes Anglian, which has asked regulator Ofwat to increase annual household bills by 29pc to £682 over the next five years.

The chief executive of Anglian Water, Peter Simpson, confirmed earlier this year that he will waive his bonus this year in recognition of the supplier’s ailing environmental performance.

An Anglian Water spokesman said: “We’re pleased the judge has said our course of action and time taken to respond with data to the Environment Agency was reasonable. These were the two most serious allegations for obstruction.

“On the third count, we have received the judge’s draft sentencing remarks and will now take the opportunity to review the basis of the sentence.”

Daily Telegraph

Revealed: the ‘catastrophic scale’ of sewage spills in England and Wales

Water companies in England and Wales have averaged five serious sewage spills into rivers or seas every day over the past decade, the Observer can reveal.

Analysis of Environment Agency data has found that the 10 firms recorded 19,484 category 1-3 pollution incidents between 2013 and 2022, the most recent year recorded, an average of one every four and a half hours.

Campaigners accused the water industry of “polluting our rivers and seas at a catastrophic scale”, while Labour said the government had “folded their arms and looked the other way” as the crisis worsened.

Thames Water was the worst offending company according to the Environmental Performance Assessments analysed by this newspaper, recording some 3,568 incidents in that time, followed by Southern Water (2,747), Severn Trent (2,712) and Anglian Water (2,572).

Most of the incidents recorded were category 3, the least severe of those collected and a type that is supposed to have only a localised effect.

But the figures are also likely to be an underestimate. The number and severity of sewage spill incidents are self-reported by water companies themselves.

The incidents, and their actual severity and impact, often go unverified. The Environment Agency, which regulates the sector, has faced staff shortages and major budget cuts that have forced it in the past to tell its inspectors to not investigate less serious incidents in order to cut down on costs.

The state of the UK’s rivers and seas has become a major campaign issue in the general election.

Labour’s shadow environment secretary, Steve Reed, told the Observer that the Conservative government had “just folded their arms and looked the other way while water companies pumped a tidal wave of raw sewage into our rivers, lakes and seas”.

He said that Labour, if elected, would give regulators the power to ban bonus payments and even levy criminal charges for “law-breaking water bosses”.

The Liberal Democrats’ environment spokesperson, Tim Farron, whose rural Westmorland and Lonsdale constituency is one of the 25 worst affected by sewage releases, said the issue was a “national scandal which has gotten worse and worse under the Conservatives’ watch”.

“The Conservatives’ record is one of rising sewage levels and water firms stuffing their pockets with cash,” he added. “The Liberal Democrats have led the campaign against sewage, with plans for a new water regulator, an end to disgraceful bonuses and profits, and new sewage inspectors.”

A Conservative spokesperson said the government had been clear that “water companies need to be held to account” and that they had “introduced unprecedented levels of transparency with 100% monitoring, and applied the largest ever fines to law-breaking water companies”.

A spokesperson for Water UK, the organisation that represents water companies, said that numbers of the most serious pollution incidents had fallen over the last decade, and stressed that the industry plans to invest £100bn into its network that will come into action once it receives approval from the regulator, Ofwat.

The Observer

UK risks missing out on nuclear supply chain, Rolls boss warns

The boss of Rolls-Royce has issued a stark warning that Britain is at risk of missing out on creating a homegrown industry for mini-nuclear reactors, repeating a failure to capitalise on its lead in offshore wind, if the first projects are not approved before the end of the year.

Tufan Erginbilgic said the UK had the chance to gain a “first-mover advantage” by becoming one of the first nations in the world to award government contracts for small modular reactors, but it needed to “action it fast” to ensure that the parts required for construction would be manufactured domestically.

“The UK has missed the opportunity to develop the offshore wind supply chain,” Erginbilgic said. “This will be in that category.”

Britain is second only to China in terms of installed offshore wind capacity, but most of the critical components for wind turbines are made overseas. “Only as the first mover will [you] enable the supply chain,” the Rolls-Royce chief executive said.

Six designs for small modular reactors, including one from Rolls-Royce, have been selected to compete for up to £20 billion in taxpayer funding. The deadline for competitors to submit details of their bids, including costs and timeframes for the projects, was pushed back by two weeks, to July 8, at the request of one of the American candidates.

The selection process is being led by Great British Nuclear, an arm’s-length body set up by the government last year to drive the deployment of nuclear power. Great British Nuclear is planning to whittle down the contenders to a list of four later this summer, before selecting the final two developers by the end of the year. It had been hoped previously that contracts with developers of small modular reactors would be signed this summer. The first small modular reactor is not expected to be up and running before 2035.

The outspoken FTSE 100 chief executive is leading a turnaround of Rolls-Royce, including cutting its debts and improving margins, calling the 118-year-old British company “a burning platform” whose future had been in doubt upon his arrival.

Erginbilgic, 64, said he was “very confident” that Rolls-Royce’s design would be picked as one of the first to be given the go-ahead. The company had already held early talks with suppliers, including some in Britain, he said. If selected, it would look to make a final investment decision towards the end of the decade.

The Times

At least $10tn of insurance cover needed to reach net zero, report says

Insurance cover will be crucial for more than half of the $19tn of investment already committed to financing the transition to net zero, putting “unprecedented structural pressures” on the sector, according to a new report.

Insurance broker Howden and Boston Consulting Group have concluded that at least $10tn of new cover will be required for the energy, road transport and building sectors between 2023 and 2030, including for huge infrastructure projects such as offshore wind, solar farms, as well as the insulation of existing housing stock.

Rowan Douglas, chief executive of Howden’s climate team, said the report was meant as a “wake-up call” on the vital role of insurance coverage in the energy transition and the challenges this presented. The stresses on the market would be “ubiquitous”, he added.

“We are going to be having this energy transition globally, at pace and scale, all at the same time.”

Executives and policymakers have increasingly focused on the enabling role of insurance in building the infrastructure and technology required for the energy transition, and questioned whether there is sufficient capacity in the industry to underwrite these sprawling and complex risks.

Insurers already provide extra cover in a range of areas from hydrogen-powered and electric vehicles to offshore wind and hybrid building materials, and plan to expand into newer technologies. But there is also a pressure on insurance firms to be cautious about how much new risk they take in areas where there is a lack of historical data on losses.

“The new energy technologies are pressing the envelope in terms of innovation, and therefore riskiness, and [so] are harder to underwrite,” Rowan said. “If there is going to be a shortage of capacity, it is likely that capacity will flow to areas that are more understood and more profitable.”

The Financial Times

Grounded flights rearranged after airport powercut

Some passengers whose travel plans were thrown into chaos by a power cut at Manchester Airport face further delays as airlines rearrange grounded flights.

Airport bosses said all flights scheduled for Monday “were expected to run as usual”.

But it said airlines would be in touch with travellers whose flights had been cancelled on Sunday.

More than 90,000 people were affected when the outage caused problems with security and baggage screening. The airport has apologised.

From the early hours of Sunday, outbound flights were grounded and scheduled arrivals were diverted to other UK airports.

By lunchtime, 66 outbound flights (25% of all departures) and 50 inbound journeys (18% of all arrivals) had been cancelled, according to aviation analytics company Cirium.

At about 19:30 BST, airport bosses said flights had resumed and vowed to hold an investigation into what happened.

Chris Woodroofe, the managing director of the Manchester Airport, said he was sorry for the delays and that staff were “making sure the impact [did] not carry on” into the coming days.

The disruption was caused by a “fault” with a cable at the airport, which sent a surge of power across the electrical network, he said.

BBC News

British Gas sorry for pursuing man over wrong £2,500 bill

British Gas has apologised after it told a customer it was sending his details to a debt collector for a £2,500 bill which the energy supplier had charged in error.

John Spink received a letter in April saying he owed the large sum following months of seeing his gas and electricity bills spiral after he had a smart meter installed in his home.

Despite several letters, emails and phone calls with the help of a neighbour objecting to the bill, British Gas told the 79-year-old his details had been passed on to a debt collection agency.

But after being contacted by BBC Money Box, the energy supplier apologised and confirmed Mr Spink, from south-east London, did not in fact owe any money and would be compensated £500.

“This has now been resolved and we can see from Mr Spink’s smart meter readings that his gas usage is very low,” a spokesman said.

“We’ve confirmed that his account balance is currently zero, he won’t receive any further reminders, and a goodwill gesture is on its way.”

British Gas was at the centre of a scandal last year when it emerged debt agents working for the energy supplier had broken into vulnerable people’s homes to force-fit prepayment meters.

The revelation led to a public outcry before all suppliers were told to halt such practices by the energy watchdog, before being given permission to resume forced fittings under stricter rules in April.

Mr Spink first received a bill of more than £4,000, which jumped to £6,700 by Christmas last year.

It dropped down in April, but was still £2,500 when he received a message from British Gas which said his details had been passed on to a debt collection agency because he had not paid it.

The pensioner does not have access to the internet or a phone, but was helped by his neighbour Angela to complain to the company.

“I was absolutely astounded (by the bill),” Mr Spink told BBC Money Box.

“I have lived in this house now for nigh-on 30 years now but I have never had bills for more than £60 or £70 for a quarter.

“They said in one letter they were going to come round to my house to see what the situation was and if anyone had come round I was going to read the riot act to them… what the hell do you think you’re playing at?”

BBC News

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.