Weekend press: Octopus Energy closes in on Shell deal

Coverage of the utilities sector in national media over the bank holiday weekend included speculation that Octopus is poised to mount a takeover of Shell Energy Retail. Elsewhere Michael Gove is expected to rip up nutrient neutrality rules for housing developments and Cadent has warned the government it risks a public backlash if it forces heat pumps on customers. And a woman awarded a payout of £360,000 from National Grid after being harassed by her manager tells her story

Octopus Energy closes in on Shell deal as Big Six dominates the market

Octopus Energy is closing in on a deal to snap up Shell’s household energy business – which could be finalised as soon as this autumn.

The takeover would make the supplier the second largest energy firm with over 6m customers.

It would also confirm the Big Six’s stranglehold on the energy market, taking its share of the country’s customer base to well over 90 per cent.

Octopus emerged as the leading candidate to snap up Shell Energy Retail, nearly three months after the division was put up for sale, according to Sky News.

Any potential acquisition would follow less than a year after it bought Bulb Energy – with its 1.6m customer base – which powered the supplier from fifth to third in the retailer rankings.

Taking on Shell’s 1.5m household customers also edges Octopus closer to Centrica-owned British Gas, the UK’s largest energy firm, which supplies 10m homes and businesses.

Meanwhile, Shell calculates that selling the unit would remove about $300m (£238m) in its annual operating expenses.

Lazard, the US investment bank, is handling the auction on Shell’s behalf.

The news agency understands other parties remain in the mix to buy the business from Shell, and that a superior offer could still emerge, but that Shell expects to sign a sale agreement during the autumn.

Ovo Energy has previously been linked as an interested party, with British Gas reportedly submitting an offer earlier this year.

While Octopus is expected to offload Shell’s 500,000 broadband customers, which are also being sold as part of the arrangement, it is unclear whether the company would retain the 125,000 customers across Shell’s retail businesses in Germany and the Netherlands.

Octopus, Shell, Lazard and Ovo declined to comment when approached by City A.M.

Centrica did not respond at the time of publication.

City AM

Shapps risks backlash by forcing ‘luxury’ heat pumps on households, warns energy boss

Forcing British households to adopt “luxury” heat pumps risks triggering a backlash akin to a rebellion by Germans over the country’s boiler ban, the UK’s biggest gas network operator has warned.

Angela Needle, director of strategy at Cadent Gas, warned that ruling out the option of using hydrogen for heating homes risked leaving consumers with just one option, heat pumps, which remained far too expensive for most households.

She pointed to controversy in Germany over a ban on buying new gas boilers from 2024, dubbed the “heat hammer” by critics, adding: “Heat pumps are a luxury product for folks who’ve got £13,000 in the bank.

“Forcing one solution on everybody will be politically very difficult and I think you’ve seen with Germany, with the heat hammer, that it’s not going to be a vote winner.

“You can see how it’s happening with the off-grid issue at the minute, people being told that from 2026, they can’t have an oil boiler anymore.

“I would argue that the cost of hydrogen will have to come down significantly to be affordable. But I think there’ll be a combination… Just flicking to a binary answer is not going to be helpful.”

She also insisted that hydrogen was a practical option, pointing to tests carried out by Cadent which have looked at using both existing and new gas pipelines to carry hydrogen to homes and found that only “small” changes would be necessary.

Cadent, which serves the North West, West Midlands, East Midlands, East of England and north London, is already undertaking a multibillion-pound programme to replace metal gas pipes with plastic ones that are suitable for carrying hydrogen, subject to approval from the Health and Safety Executive.

Ms Needle said: “We want to be able to use the existing infrastructure that we’ve all paid for, which silently delivers energy all day, every day, without a huge amount of disruption.

“And we do worry that the gas network is being ignored.”

Her comments come after Grant Shapps, the Energy Security Secretary, said he was not convinced that piping hydrogen into millions of British homes, instead of natural gas, was a practical option.

In another blow to companies such as Cadent, which want existing gas infrastructure to be used for hydrogen, ministers have also abandoned a planned hydrogen trial in Whitby following a backlash from residents.

Another trial, in Redcar, may still go ahead but has not yet been confirmed.

Some energy experts have also dismissed hydrogen as an overly expensive solution for residential heating, because of the relatively high energy requirement to produce it and the low efficiency of burning it.

Greg Jackson, the chief executive of Octopus Energy, has compared it to “flushing the toilet with champagne”.

Instead, the Government is urging households to get electrically powered heat pumps, with ministers aiming for 600,000 of the devices to be installed per year by 2028.

However, uptake remains relatively low, with only 33,000 installed last year, largely due to an average cost of £13,000 for installation – a figure that can be reduced by £5,000 with a government grant.

Ms Needle said the setback in Whitby was disappointing but insisted that residents had not only rejected hydrogen boilers but heat pumps as well.

She urged the Government to provide more clarity to gas operators about the potential future of hydrogen for heating and to consumers about the proposed switch to heat pumps.

She added: “It’s a huge ask of people. And I can understand concerns, because you’re really talking about changing their home.”

Phil Hurley, chief executive of the Heat Pump Association, said the cost of heat pumps would fall over time as demand for them ramped up and more plumbers were trained to install them.

For example, he said the ban on off-grid oil boilers would stimulate sales as well as a ban on installing gas boilers in new-build homes from 2025.

Mr Hurley added: “The reality is that the Government is committed to reducing carbon emissions and at the moment, heat pumps are an established technology that can deliver that.

“Costs are an ongoing challenge and we also need to fix the disparity between the electricity and gas prices.

“But as demand for heat pumps grows, and more [plumbers] are trained, installation costs will come down.”

The Daily Telegraph

Slash hidden charge adding £300 to gas and electricity bills for prepayment customers, Government told

The Government has been urged to scrap a hidden energy charge for customers on prepayment meters amid fears it is plunging them into fuel poverty.

The “cruel and disgraceful” standing charges are used to maintain the energy network, but add around £300 to every gas and electricity bill each year, regardless of the amount of energy that is used.

But for prepayment customers, the charge comes out before any energy is used, with warnings it could push people into debt even if they ration their energy usage – or lead to their supply being cut off altogether.

Standing charges, which cost up to 80p a day for electricity and up to 60p a day for gas, have increased by 60 per cent in the past two years to cover the cost of electricity suppliers going bust.

Energy minister, Andrew Bowie, on Friday declined to answer when asked on BBC Breakfast if he thought it was right that they are rising.

The price of the charge is set by Ofgem, but charities and campaigners are urging the Government to work with the energy regulator to scrap the hidden fee and help those worst hit by the energy crisis.

“Standing charges mean you have to pay every day for the right to buy energy,” Jonathan Bean, spokesperson for Fuel Poverty Action, a group campaigning to end both the use of prepayment meters and standing charges, told i.

“It’s like being charged £5 at the door of your supermarket, for the right to buy food – it’s cruel and disgraceful.”

Mr Bean said that many households are forced to stop using their gas boilers completely to cut costs and that there had been cases of people developing potentially fatal hypothermia because they were unable to switch on their heating due to the charge.

Energy companies offer a small amount of credit on prepayment meters for unpaid standing charges but this is subtracted from future top-ups, leaving customers with less to spend on their energy.

Adam Scorer, chief executive of National Energy Action, told i that low-income households on prepayment meters were “hit the hardest” by the charge because it makes up a bigger proportion of their bill.

“As a charity, we have seen the impact this can have. Households who ration their energy use or even self-disconnect completely can rack up unmanageable standing charge debt,” he said.

It comes after Octopus Energy boss, Greg Jackson, said standing charges “disproportionately impact lower-income households” and should be slashed.

“It’s hard to justify a meter racking up hundreds of pounds a year, even when there’s hardly any usage,” he said.

“We’d like to see the regulator fix this by moving more costs from standing charges onto unit rates so that those who use less don’t get penalised.”

iNews

England’s rivers at risk as Michael Gove rips up rules on new housing

Michael Gove is planning to rip up water pollution rules that builders have blamed for exacerbating England’s housing crisis but which environmental groups say are essential for protecting the country’s rivers.

The housing secretary, alongside Thérèse Coffey, the environment secretary, will announce the move on Tuesday, according to several people briefed on the plans, alongside hundreds of millions of pounds’ worth of extra funding to mitigate the potential impact on England’s waterways.

The decision will spark anger among environmentalists, who say it will further add to water pollution, as water companies are already dumping raw sewage into rivers and seas. Political advisers say water pollution has already become a major political issue in coastal areas, and has the potential to cost the Conservatives important seats at the next election.

However, it will please major developers, who say the rules are being applied so strictly that they are unable to build new homes in large parts of England. Building industry projections say housebuilding in England is forecast soon to fall below levels not seen since the second world war.

Doug Parr, policy director at Greenpeace UK, said: “Who would look at our sickly, sewage-infested rivers and conclude that what they need is weaker pollution rules? No one, and that should include our government. Scrapping or weakening limits on chemicals from sewage and farm run-offs would be a sure sign that ministers have completely given up on saving our great waterways and the precious wildlife they host.

“Instead of allowing housebuilders to cut corners, the Sunak administration should make sure we have the right infrastructure to handle our sewage so we can build new homes without sacrificing our rivers’ health. But that would require them to do what they’ve spectacularly failed to do so far – forcing water firms and housebuilders to invest their profits in upgrading treatment plants and pipes to a standard that a modern, functional country would expect.”

However, one source in the housebuilding industry said: “This is undoubtedly good news for Britain’s housing supply. The only question is why it has taken so long for the government to get round to doing something about this.”

The nutrient neutrality rules were put in place in 2017 when the UK was still a member of the EU. They say that in dozens of protected areas across England, local authorities should not give the go-ahead to any new development that is projected to add to river nutrients such as phosphates and nitrates, either through wastewater from new homes or run-off from building sites.

The regulations were first enacted by the EU in an attempt to prevent damaging buildups of algae and other plants, which can choke off aquatic life.

Developers, however, say they are being enforced by Natural England in such a strict way that they have been forced to put as many as 120,000 new homes on hold, and argue that farmland is a far bigger contributor to the pollution in question.

Under the existing rules, builders have to mitigate new nutrient loads caused by new populations in housing either onsite or elsewhere within the same catchment. They can do this by investing in new wetlands or by creating buffer zones along rivers and other watercourses. Builders have complained that doing so was costly and time-consuming.

In response to developers’ complaints, ministers launched a mitigation scheme in 2022 under which builders were allowed to buy “credits” to gain approval for their schemes. But those developers say that the process of purchasing such credits has occasionally led to unintended consequences, such as buying up farmland to take it out of use in an attempt to reduce water run-off.

Despite these changes, ministers say there is still a problem. Gove recently told the Sunday Telegraph that the rules should be changed as they get the “balance wrong”. In his announcement on Tuesday he will say the repeal of the rules is a “Brexit bonus”.

Those briefed on the plans say the government will try to change the law through an amendment to the levelling up and regeneration bill, which is currently in the House of Lords. Ministers might yet find it difficult to secure enough support for the bill, which must pass by the autumn or have to be reintroduced in a new bill in the King’s Speech in November.

The Guardian

I was harassed by my boss at the National Grid — then denied a day in court

When Emma Tahir started her job at National Grid she had hoped to be treated like “one of the lads”.

She knew it was a male-dominated industry — there were just two women in her team of 12 — but she enjoyed it, and her work on an electricity substation gave her a sense of purpose.

Her manager, however, did not treat her like the male employees, instead subjecting her to a persistent campaign of sexual harassment that left her suffering anxiety attacks, unable to go to work and eventually jobless.

At an employment tribunal in May, Tahir, 28, was awarded £360,000 for sexual harassment, victimisation and constructive wrongful dismissal.

She is telling the full story of her ordeal for the first time after being denied the chance to do so in court. Days before her hearing was scheduled to go ahead last year, National Grid pulled its defence, meaning the case was concluded in a private session. “It felt like just another way to hurt me, because they knew how much I was relying on saying my piece for closure,” she said.

When she started at National Grid at the age of 25, Tahir was elated to join the training scheme. She met Colin Higgins, who was in his fifties, on her first site visit, in July 2020. He was “really well-liked”, she said, and told her he had a wife and children “her age”.

Her initial impression was that he was “really friendly and keen”, but she noticed he made “the odd comment”, calling her “bonny lass” or “pretty”.

A few weeks after they met, Tahir was on site with Higgins on an unusually cold August day. She was wearing a hoodie underneath her PPE, but started to overheat as she worked. When Higgins suggested she remove her hoodie, she explained it was her only layer of clothing. She says he responded: “Just take it off. I’ve seen it all before, I’m not going to jump on you.”

Tahir tried to walk away but said Higgins put his hand on the back of her neck and asked: “What kind of men do you like?” She said: “I was completely ignoring him, and then he said: ‘If I was younger, would me and you be getting it on?’ ”

She did not report the incident, but mentioned it to a colleague, who told her: “He’s not worked with a woman before.” Tahir then told Higgins his actions had made her feel uncomfortable, adding: “I just want to be treated as one of the lads.” He replied that he was sorry and asked how she thought she was progressing compared to the other trainees. “It sounded like he was saying: ‘You don’t want to rock this boat, Emma,’ ” she said.

A couple of months later, Tahir received a WhatsApp message from Higgins, saying: “Check out this CV.” Listed under extracurricular activities, the profile had an explicit sexual act. On another occasion, he showed her a photo of himself in his boxer shorts and began calling her, telling her he “fancied” her. When she could not ignore his calls, he told her missed her, and in one text message said: “Marry me!”

She developed insomnia. “After Christmas, I wasn’t coping with the situation any more,” she said. “I initially asked for permission to work from home, so I could have space from him. I hadn’t told my family or anyone apart from two friends what had been happening, because I’d sort of decided I needed to just tolerate it to keep my job.”

In February, the offer of her first solo project felt like a “life vest”. “I knew he’d be really angry if he found out from anyone else, so I messaged him,” she said. Tahir says Higgins rang her immediately, screaming and swearing down the phone that he was “losing his girl”. He spoke to her manager about the opportunity and it was withdrawn. “It felt like that life vest had been pulled away from me, so I finally told my family and asked them for help,” Tahir said.

Without mentioning Higgins by name, Tahir told her training-scheme manager she had been subjected to inappropriate behaviour by a member of staff, and asked to be moved to another team.

She received a text from Higgins in which he said his “world caved in” when she told him about her new project. He said he saw her as “more than a friend” and “couldn’t stop thinking about” her, from “the first minute I get up to the last minute I go to bed”.

This message convinced her that she needed management to understand the urgency of the situation, so she read the text aloud to training-scheme manager. “Everything started to go downhill from there,” she said.

In a meeting with HR and the head of one of National Grid’s compliance branches, she was told there would be an investigation, and Higgins was suspended for two months. She was given a new Sim card so he could not contact her, and, after handing over her texts and emails, was moved to another team. Seven weeks later, the investigation concluded most of her claims were unsubstantiated, although it did find she had experienced harassment.

The obscene CV, the investigating officer concluded, was relevant because Tahir had helped Higgins with his own CV four months earlier. Higgins had made comments about the closeness of their relationship because he thought of her as a daughter, they said.

In the process of the investigation, Tahir alleged that Higgins had used the phrase “worth a wank” in a team call. He said he did not recall using the phrase but conceded such language may have been used on site, though he said it would not have been directed at anyone. Although he admitted showing Tahir the photo of him in his boxer shorts, he said it was to demonstrate his weight loss.

He told the internal investigation that his behaviour was reflective of their friendly relationship and that messages such as “marry me” were intended as a joke, or to communicate that he was impressed with her work, and that he had no inappropriate intention.

“I think they thought that because I was young and vulnerable, I would disappear quietly so they could just cover it up,” Tahir said. But she appealed and submitted a grievance for victimisation. She was not given any work for months as she waited for a response.

Tahir resigned in June 2021, feeling she had no choice after receiving an automatic notification that her pay would stop after a prolonged period of sick leave. She began her tribunal claim in April. Shortly afterwards, the internal appeal she had made found that the majority of her allegations were substantiated. “I can’t say for certain if [the tribunal action] influenced it, but my opinion is that it did,” she said. The company began a disciplinary process against Higgins but he resigned.

“I was in a grieving process, because I’d loved my job and I worked really, really hard to succeed at it,” said Tahir. “After losing that I ended up just fleeing, because I couldn’t cope with what was happening. I went abroad and I ended up staying there for several months. I felt like I was in a position where the future didn’t exist any more.”

She has not been able to find another job in the construction industry since, and now works in financial services.

The tribunal award was calculated based on her loss of earnings as an employee who was “likely to progress quickly”, according to former colleagues. The tribunal judges concluded that National Grid’s initial investigation was “perverse”. It upheld all 26 allegations of sexual harassment and eight instances of victimisation, and concluded that National Grid should have dismissed Higgins “when the facts were understood . . . given the undisputed and exceptional evidence base in this case”. Euan Lawrence, her legal representative, of Blacks Solicitors, said: “The award of aggravated damages is only made in rare situations, where an employer is adjudged to have acted in a high-handed, malicious, insulting or oppressive manner.”

Tahir said that, despite the mental toll of pursuing legal action, she does not regret it, and would encourage others in similar situations to speak up. “Once you understand the process, it’s not that scary, and you can survive.”

National Grid said: “This should never have happened and we apologise unreservedly. There is no place for misconduct in our business. We have taken steps to ensure that people know how to report anything that makes them feel uncomfortable or unsafe, that all grievances are handled appropriately.”

The Sunday Times

Hundreds more rapid charging points installed in UK to help drivers go electric

Charging companies are plugging the gaps in the UK’s high-speed charger network, with hundreds added this year outside London in a shift that will help end the “range anxiety” that holds back some would-be electric car buyers.

The capital and the south-east still have far more chargers of all speeds – ranging from slow to rapid and ultra-rapid – than the rest of the country. But the presence of high-speed chargers, generally used for quick recharging on longer journeys, is increasing in other regions as electric car sales surge.

The West Midlands, east Midlands, the south-west of England and Wales all installed more rapid or ultra-rapid chargers than London during the past year, and their networks have grown more rapidly than the south-east of England, according to data from ZapMap, which maps UK public charging points.

Nine out of 12 regions of the UK installed more than 100 rapid chargers during the past year, ZapMap’s data showed.

Long journeys are relatively rare occurrences for most households, but perceived difficulties in finding chargers for the occasional long drive – such as the 14m trips expected over the August bank holiday weekend – have been one factor putting people off electric cars.

Most of the UK’s 46,000 public chargers are described as either “slow”, with a trickle of energy used for charging a car on the street overnight, or “fast”, capable of charging an average car in two to four hours. But “rapid” and “ultra-rapid” chargers are important for the UK’s transition away from petrol and diesel engines to cleaner electric cars because they allow drivers to recharge on longer journeys.

Melanie Shufflebotham, chief operating officer at ZapMap, said: “In 2023 the pace of installation of the critical ultra-rapid charging network has really picked up, with 42% more chargers versus the beginning of the year. Essential for supporting electric vehicle drivers on longer journeys, it is encouraging to see that they are being installed across the country, particularly in erstwhile poorly served areas of Wales, Northern Ireland and the north east.”

Quentin Willson, a former motoring presenter who founded the campaign group FairCharge, said range anxiety was not as big a problem as before, because of improving charger numbers.

“People are managing to cope as long as they plan,” he said. Range anxiety is “certainly not the force it was”, he added, given that most new electric cars have between 200 and 250 miles of range, more than enough for most daily journeys.

The overall pace of charger installations has also picked up, with total charger numbers up by 23% in the first seven months of the year. During the first half of 2022 an average of 891 charging devices were installed each month, but that nearly doubled to 1,622 a month in the first six months of 2023, ZapMap found.

However, Willson said there were “blockages in the system” preventing a faster rollout of chargers, including electricity grid connections, which are lagging far behind demand.

London still far outstrips the rest of the country in terms of the total number of public chargers. That is partly because a higher proportion of households in London do not have private parking, but it also reflects the fact that the more affluent London market is more attractive to charge point operators.

Nevertheless, Willson warned against seeing London as one bloc, because of the variations between local authorities. Some parts of Greater London and the south-east of England have poor access to public chargers, he said.

The Guardian

BESS: The charged debate over battery energy storage systems

Huge battery storage plants could soon become a familiar sight across the UK, with hundreds of applications currently lodged with councils.

In one corner of West Yorkshire locals are fighting plans to site two facilities within a mile of their homes.

They cite concerns over the safety and environmental impact of the technology but the firms behind them say the processes are safe.

BBC Yorkshire spoke to those on both sides of the highly charged debate.

Read the full article here

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.