Weekend press: Pure Planet co-founders to receive £30m

In this week's roundup of national news, the co-founders of Pure Planet are set to receive £10 million each following its collapse, despite billpayers having to foot the bill; grid capacity could put green growth in limbo in the UK; and Scotland is lagging behind England and Wales for its river monitoring programme.

Failed Pure Planet’s founders to receive £30m

Pure Planet’s three co-founders and BP are each expected to receive more than £10 million from the ashes of the failed energy supplier, even as consumers foot a £154 million bill for its collapse.

The administration of Pure Planet’s parent company, Blue Marble Holdings, has resulted in a surplus of £43.7 million, documents filed at Companies House show. The vast majority of this is expected to be paid to shareholders, sources confirmed.

Holdings of just under 24 per cent are owned by BP and each of the co-founders: Andrew Ralston and Steven Day, both former telecoms executives, and Chris Alliott, a former City analyst. They are each expected to get more than £10 million. Tom Alexander, a former telecoms boss with a stake of almost 5 per cent, is in line for more than £2 million. When The Times first revealed the potential for such payments last year, BP promised that any money it received would be given to charity. No such commitments have been made by the other shareholders.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition said: “This is an absolute disgrace. Hard-pressed energy bill payers had to bail out this company’s failure in another example of Britain’s broken energy system.” Shareholders should “do the decent thing and return the money to the public or donate it in full to charity”. He said the government should try to recoup the cash if that did not happen.

Pure Planet had about 235,000 household customers when it failed in October 2021, one of dozens of suppliers to go under as wholesale gas and power prices rose. Blue Marble fell into administration, and Ofgem, the regulator, moved Pure Planet’s customers to Shell Energy. The cost of the failure, like that of others, was borne by bill payers. Blue Marble had already hedged, or contracted to buy, significant volumes of gas and electricity for Pure Planet customers through BP before prices soared. When it failed, the contracts were valuable, since the energy could be resold at higher prices.

The contracts remained with Blue Marble and were cashed out by BP, realising enough cash for the oil company to be repaid all its debts from the supplier and resulting in the eventual surplus.

Shell had to buy energy for Pure Planet’s customers afresh at high prices and Ofgem allowed it to recover these costs through a £141.6 million levy on energy consumers. Pure Planet also owed about £12.7 million to green energy schemes when it failed.

BP reiterated its commitment to donate the cash it receives to charity. Day, Ralston, Alliott and Alexander did not respond to attempts to reach them.

The Times

How our power grid is choking UK green growth 

The UK is in gridlock over its green growth. After years of a chronic productivity problem, politicians, industry, and the public all point towards a low-carbon economy as a beaming light at the end of a dark tunnel. Where investment grows, energy is clean, and well-paid jobs are dispersed across the regions.

This mission is not a silver bullet for solving the UK’s deep economic inequalities, but it is a critical part of a more prosperous future. One that is now slipping from reach.

This is a recent familiar narrative. The US Inflation Reduction Act (IRA) and the EU’s response in the race for green energy subsidies have unsettled UK industry leaders and senior politicians. The threat of key developers lured away to more attractive investment environments consumes headlines. The warning to government goes: follow suit or risk losing the UK’s competitive advantage in renewable energy and missing net zero goals. How the government chooses to respond to this is a bigger question for another day.

Meanwhile, the UK’s chances of achieving green growth hang in the balance of something less eye-catching but much closer to home — grid capacity.

A recent National Audit Office report found that the government lacks a long-term plan for decarbonising the power sector, putting government targets, security of supply, and affordability for households at risk. One crucial aspect of this (non-existent) plan is ensuring that the grid can keep pace with growing electricity generation.

The government’s ambition is that by 2035 all electricity should be generated using clean sources alongside a 60 per cent uptick in demand as people switch to electric vehicles and heat pumps. In the next eight years, offshore wind alone will need to nearly triple what has been achieved in the past two decades. Labour promises to move even faster with zero-carbon power by 2030. But the grid can barely cope as it is.

First, getting new projects connected to the grid is fraught with painful waiting times of up to 15 years and perverse incentives around project viability. This is partly due to planning delays and a queuing process that is not fit for purpose. But what captures fewer headlines is the poor quality of the grid that keeps our answers to growth, net zero, and energy security waiting in line.

Insufficient capacity within the grid means that it cannot transmit all the power from where it is generated to where it needs to be. The most common case of this is when the network overheats and generators are paid by the National Grid electricity system operator (ESO) to “switch off”. Last year, these payments (“constraint costs”) totalled £1.94 billion, up from £0.51 billion in 2018, partly inflated by wholesale energy prices.

This presents an urgent catch-22 for policymakers to resolve, particularly in an era of volatile prices. That is because constraint costs are ultimately paid for by households via a levy on their bills. As more power (slowly) comes online, continued underinvestment in upgrading the network’s capacity will only lead to higher constraint costs for billpayers.

Read the full article at The Times

Newcleo to raise £900m to build fleet of small nuclear reactors in UK

A British-based nuclear company backed by Italy’s Agnelli family plans to raise nearly £900 million to advance a plan to build a fleet of small nuclear reactors in Britain.

Newcleo, based in London, has an ambitious scheme to build one plant a year in the UK up to 2050 and eventually generate 4 gigawatts of electricity, more than will be produced by the large new nuclear plant being built at Hinkley Point in Somerset by EDF.

Its reactor will use fuel made in part from plutonium. Britain has one of the world’s largest stores of plutonium, a waste product from traditional nuclear plants.

Newcleo could be a contender in the competition announced last week by Jeremy Hunt, the chancellor, for designs for small modular reactors (SMRs) to be built in the UK. Details of the contest are expected at the end of the month, but industry sources said it was expected the Treasury would co-fund development of a prototype, and perhaps also eventually commit to buying power from the first commercial plants at an agreed price.

Stefano Buono, Newcleo’s chief executive, said the company was happy with the competition and was waiting to see the details. He said, however, that Newcleo would press ahead regardless of the outcome. “For us the ideal situation is that a government gives us a contract to produce power at a certain price, then leaves us to do the rest,” he said.

Newcleo has already raised about £350 million from investors including Exor, the investment vehicle of the Agnelli family, the business dynasty with its roots in the Fiat motor company. It plans to build prototype plants in France and Italy, and is close to a final submission to Britain’s Office for Nuc

lear Regulation to have its reactor design approved, a process expected to take about four years. Newcleo’s design is unusual in that it uses lead as the coolant for the reactor, and a mixed-oxide fuel partly made from plutonium.

“The point of building these two prototypes is to help with the approval process in the UK. We will be able to produce evidence that we have a proven and reliable technology,” Buono said.

The Times

Scots paying unacceptable price for Westminster failure on energy bills – SNP

Scots are paying an “unacceptable price for Westminster failure”, the SNP Westminster leader has said amid the UK Government’s decision to freeze the energy price guarantee.

Chancellor Jeremy Hunt delivered his budget on Wednesday where he set out that annual energy bills would be capped at an average of £2,500.

The £400 energy bill support scheme, however, is to be scrapped.

Following the budget, analysis from the Office for Budget Responsibility (OBR) estimated that typical household energy costs would remain in excess of £2,000 until at least winter 2024/25.

Stephen Flynn has said Scottish families will be left to pay more than double their energy fees in 2021, when the price cap was £1,138.

The OBR forecast also warned real household disposable income (PHDI) in the UK is expected to fall by 6% between 2022/23 and 2023/24.

The SNP leader in Westminster has now urged the Chancellor to cut the energy price guarantee.

Mr Flynn said: “Scotland is a wealthy, energy-rich country but families are paying an unacceptable price for Westminster failure – with sky-high energy bills set to last for years under Westminster control.

“The SNP has urged the Chancellor to save households £1,400 by slashing energy bills but instead the Tory government has chosen to scrap the £400 energy rebate and keep bills at extortionate levels – leaving families hundreds of pounds worse off.”

The Aberdeen South MP also took aim at the Labour Party, which he said gave its “full support” to the energy cost freeze.

He added: “It’s not too late for the UK Government to U-turn and slash bills.

“At a time when energy companies are making record profits, and the wholesale price of gas is falling, it’s inexcusable that Westminster is forcing Scottish families to pay through the nose.

“People in Scotland shouldn’t be footing the bill for Westminster’s mistakes.”

A Department for Energy Security and Net Zero spokesman said that “scaremongering will not take away from the fact that billpayers in Scotland are receiving unprecedented support from the UK government”.

Evening Standard

Putin’s gas blackmail has failed in Europe, but the battle is not over yet

The spring equinox falls on Monday, marking the traditional end of the winter season. In eras past, it would be a moment for festivities, and this year, Europe could revive the tradition, having survived the winter relatively unscathed. The reason for the cheer: beating Russia’s energy blackmail scheme.

To understand this achievement, some context is needed. A year ago, Russian President Vladimir Putin had just ordered the land invasion of Ukraine, and the European Union responded almost immediately with a swathe of sanctions against the Kremlin war machine.

Russian pipeline gas was still flowing westwards, but would soon be cut, while the EU worked to end imports or Russian oil and coal. The key question, though, was whether European countries could endure without Russian fuel, which by then, accounted for around one third of its energy imports.

We now know the answer. Europe has won the energy battle to wean itself off Russian gas imports. The mild winter helped a lot, but EU governments also took effective action, scrambling to find new gas suppliers, speeding up the renewable energy rollout, cutting energy consumption, and stocking up on gas storage. At the onset of spring 2023, the EU’s gas storage capacity was at 55 per cent, up from 25.7 per cent this time last year.

In terms of consumer prices, while results varied from country to country depending on the levels of government subsidies and energy sources used, Europeans have tended to pay lower prices than those in the UK, according to a monthly energy price index carried out by Austria and Hungary’s energy regulators.

For example, figures for February 2023 put the UK near the top of European nations when it comes to what users pay for electricity in capital cities, measuring 48.48 €/kwh – just below 49.85 €/kwh in Ireland and 49.45 €/kwh in Germany and above 48.01 €/kwh in Italy. However it’s significantly higher than the 26.29 €/kwh recorded in France, 24.08 in Spain €/kwh and 21.14 €/kwh in Portugal.

Overall, British users paid 48.48 €/kwh compared to an average of 28.26 €/kwh among the 27 EU nations.

“Europe weathered the energy crisis of 2022 much better than the most people had feared,” says Noah Gordon, the Acting Co Director, for Sustainability, Climate, and Geopolitics at the Carnegie Endowment for International Peace.

“The economy didn’t suffer as badly as many expected, there wasn’t a recession for the most part, and, although gas costs more than twice as much as before the war, it’s way better than things were in the summer of 2022. I suspect Putin had a bit of a nasty shock, as he thought that Europe was reliant on Russian energy.”

Moscow’s threat to turn off its gas taps had long hung over European countries, many of whom have relied on it for years to heat their homes and power their factories.

Before the invasion of Ukraine, Russia was the EU’s largest gas supplier, providing 45 per cent of its bloc’s imports and almost 40 per cent of its total consumption in 2021.

Read the full article at iNews

No new sewage monitors on Scottish rivers, more than a year after promise was made

Scotland’s publicly owned water company has yet to install a single new river sewage monitor more than a year after promising 1,000 would be fitted by the end of 2024.

In December 2021, Scottish Water announced plans to dramatically increase the number of monitors on combined sewer overflows (CSOs) on the national sewage network.

But in response to a Freedom of Information request from i, the company admitted that as of 1 March this year, not a single new device had been installed.

CSOs are designed to drain excess water during periods of heavy rainfall to avoid flooding people’s houses, but often lead to sewage being discharged directly into rivers.

The most recent data shows that between 2017 and 2021, sewage has overflowed directly into Scottish rivers and other water courses 54,289 times – or almost 30 times per day.

Campaigners fear the problem could be much worse due to a lack of monitoring. Of the 3,614 overflows in Scotland’s 31,000-mile sewer network, only 4 per cent (144) are monitored.

This in contrast to England, which has 14,470 overflows of which 89 per cent (12,700) are monitored, with 100 per cent coverage expected to be reached by the end of this year.

In an attempt to close the gap, Scottish Water announced in December 2021 that it would boost the number of monitors, but progress has been slow.

In its FOI response, Scottish Water said it anticipated that the project would start “within the next few months” and that it had thus far been focusing on deciding which CSOs to prioritise.

Conservationists said it was “vital” that the project went ahead as soon as possible.

Jonathan Louis, interim director of the Forth Rivers Trust said: “It is disappointing that despite Scottish Water publishing their Urban Waters Route Map in 2021 and committing to installing 1,000 new sensors on polluting outflows, they have not managed to install a single new sensor as of yet.

“Scotland is in the midst of a biodiversity and wild salmon crisis and all users of the water environment need to do more to monitor the impact they have and ensure the loss or degradation of habitats and wildlife is halted.

“It is vital that CSOs are monitored so that the full extent of the sewage problem in Scotland’s rivers is realised and action taken to protect our iconic wildlife such as Atlantic salmon, otters, eel and lamprey.”

Craig Macadam, convener of Scottish Environment LINK’s freshwater group, said it was “pleased” that Scottish Water had identified the sites for the new monitoring points.

But he added: “We know from existing information that sewage discharges from overflows are happening across Scotland – until this additional monitoring in place we won’t know how big the problem is.

“With the increasing pressures on our seas and rivers, it is vital that this infrastructure is put in place as soon as possible.”

Simon Parsons, director of strategic customer service planning at Scottish Water, said: “We remain firmly on track to deliver on our commitment set out in the Improving Urban Waters Routemap to install 1,000 new monitors and have three intelligent waste water network programmes in place by the end of 2024.

“Our programme of investment and improvement builds on progress made over many years to further enhance the quality of Scotland’s water environment, which remains high – 87 per cent of the country’s water environment is in good or better condition.”

iNews

England’s second most polluted river hit by ‘off the radar’ unrecorded sewage leaks

The River Calder is officially the second most sewage-polluted in England, with sewage flowing into the river and tributaries for 27,901 hours in 2021. Yet, like most of Britain’s rivers, the West Yorkshire watercourse is being further blighted by unrecorded sewage spills and leaks due to ageing infrastructure.

Thanks to efforts to install monitors on every storm overflow, the legal discharge of sewage into the river is better documented than it ever has been. This also remains the main source of sewage in the river.

But ageing infrastructure combined with the public’s propensity for putting wet wipes, sanitary products and cooking oil down drains mean that sewage ends up bursting out of pipes and manholes in unmonitored sites.

Dr Andy Bray of the Calder Rivers Trust told i: “We’re the second most-polluted river but that’s based on where [water companies] know that their outfalls are and doesn’t consider the impact of unknown sewage spills and leaks in the system.”

Although lesser in quantity, such spillages can be more dangerous for wildlife than storm discharges because if they happen outside periods of rain then the sewage will not have been diluted by rainwater. Campaigners have accused water firm CEOs of playing “Russian roulette” with the environment by being slow to upgrade ageing systems.

It’s a nationwide problem, but campaigners say that outside of major spills, it often goes unnoticed. Ashley Smith, the founder of Windrush Against Sewage Pollution, told i: “Often the people are just getting used to it. Their kids are cycling through it as manhole covers just seep or spew out sewage into the streets.”

In two of the Calder’s tributaries, the River Ryburn which runs through a picturesque Pennine valley and Hebble Brook which flows alongside Halifax, there are sewer pipes directly in the river course which Dr Bray says have leaked.

“On the River Ryburn… there’s a sewer running down most of the channel and sequentially along it there are a type of pressure release structures [for gas release], and if the sewer gets backed up, it’s like an uncapped straw that allows sewage release.”

Spillages can also erupt from damaged manholes or pipes that have shifted under the force of flow.

In rural areas, these can go undetected for long periods of time, unless someone happens to pass by and report the incident. Once water companies are aware of such a spill, they are obliged to report them to the Environment Agency.

“I don’t think it is well known,” said Dr Bray. “It’s often in places that people don’t commonly go. The middle of a river is not where most people are hanging about, particularly during a flood event when there is a lot of rain water and sewage and flowing down into a sewer.”

Dr Bray told i that often the only way such spillages are known about is from the debris left behind, such as wipes and sanitary products.

Senior water company figures elsewhere in the country have told i that in the past, they have often been reliant on dog walkers and ramblers to report these spills to them.

iNews

‘Very sensitive subject’: plan to take Welsh water for London stirs painful memories

On a February night 60 years ago, three young men battled through blizzard conditions to plant a bomb at a construction site in a lonely Welsh valley. Their target was a dam being built by an English privatised water company to supply water for Liverpool.

To provide million of litres a day for the English city, the people in the small Eryri (Snowdonia) village of Capel Celyn were to be evicted and their homes, farms, post office, school, chapel and cemetery flooded to create a reservoir.

The bomb attack by the newly formed Mudiad Amddiffyn Cymru (Movement for the Defence of Wales) on the electricity transformer powering the development on 9 February 1963 was an act born of intense opposition to the village drowning; people boarded buses to Liverpool to march through the streets.

Despite the protests, in October 1965 Alderman Frank Cain, of the Corporation of Liverpool, pulled a lever to sink Capel Celyn for ever under tens of millions of litres of water to create the Llyn Celyn reservoir.

Today, as climate breakdown pushes more regions into drought conditions, privatised water companies are again turning to Wales for more water – this time for London and the south-east of England.

Thames Water wants to abstract up to 155m litres of water a day from Wales to boost supplies for the most populous part of England in the coming years. It is working with United Utilities, which has a licence to abstract water from Lake Vyrnwy, a reservoir in Powys, and with Severn Trent. But as the graffiti across north Wales in memory of Capel Celyn show, water continues to be an emotive subject in the country.

Politicians in Powys are arming themselves for tough negotiations on access to water in the years ahead. The county council wants the British and Welsh governments to set up the necessary legislative frameworks to enable its communities to get a financial benefit from the use of its water. The council wants a levy raised on water supplies that are not for the direct benefit or consumption by the people of Powys.

Elwyn Vaughan, a Plaid Cymru councillor on the county council, said there had been Thames Water officials in the Lake Vrynwy area over the past 12 months. “The drought last year seems to have really focused minds,” Vaughan said. “But before Thames Water look to our water here, my argument is that they should plug their own leaks first – 600m litres a day – rather than putting all this effort into taking water from here.”

Vaughan added: “Water is a very sensitive subject. It is a fallacy to assume that plentiful supplies will be here for ever.”

The proposal by water companies is for water from Lake Vyrnwy, now abstracted by United Utilities to supply Liverpool and north-west England, to be redeployed to supply London and the south-east. Water from the reservoir would be released into the River Vyrnwy and on into the River Severn, where it would be abstracted near Gloucester before being taken to the south-east of England via a new pipeline or restored Cotswold canals.

Environmental concerns focus on the release of huge volumes of water into the River Vrynwy and Severn, and the impact on other Welsh rivers of replacing the water being taken for the south-east.

Ceri Davies, of Natural Resources Wales, said: “This release to the Vyrnwy would need to be carefully controlled to balance other vital requirements such as managing flood risk and ecological impact. We will need to be satisfied that the proposals would not have a detrimental impact on communities and wildlife in Wales before agreeing to them.”

Read the full article at The Guardian

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.