Weekend press round-up: EDF to submit Sizewell C planning application within weeks

In the round-up of this weekend’s press coverage: EDF is weeks away from submitting a planning application for its Sizewell C nuclear project in Suffolk; Ofwat is facing its biggest battle since privatisation after four companies revealed plans to appeal their final settlements; and Scottish Power launches a new tariff that guarantees customers electricity from its own renewable projects.

EDF poised to submit planning application for £20bn nuclear power plant

EDF is poised to submit a formal planning application to build a new £16bn nuclear power station at Sizewell in Suffolk within weeks.

The French state-controlled electricity giant is putting the final touches to the paperwork required for a so-called Development Consent Order for the new station, Sizewell C, from Britain’s Planning Inspectorate, the final stage in the planning process.

If approved, the new station, on the coast between Ipswich and Lowestoft, would include two new EPR reactors – making it an identical twin of another plant under construction at Hinkley Point in Somerset. Sizewell C, which is also backed by CGN, a Chinese government-controlled company, would generate 7 per cent of UK electricity, enough for 6 million UK homes.

Sources familiar with the project said EDF hoped to file the application as soon as the end of this month although it could be delayed until March. EDF said: “Work on the DCO application is continuing”.

EDF has been working to address concerns about the suitability of the site, where an existing nuclear plant, Sizewell B, has been generating electricity for 25 years. Its low-lying coastal location has raised concerns about flood risks, especially with forecasts of rising sea levels.

At 79 acres (32 hectares), the Sizewell site is significantly smaller than the 111 acre (45 hectare) site at Hinkley Point, fuelling concerns about congestion during construction as well as the environmental impact.

Sizewell is surrounded by protected marshland and bird habitats including RSPB Minsmere to the north.

The NIC is expected to take about a year to approve or reject the application. However, a government funding package for the plant has not yet been finalised, raising doubts over how quickly it will proceed. The government is determined to avoid the mistakes made with the funding for Hinkley, where EDF was awarded a guaranteed “strike price” for the electricity generated for 30 years.

The Telegraph

Ofwat faces biggest battle with water companies since privatisation

A number of papers have reported on plans by four water companies to appeal their final settlements with the Competition and Markets Authority, including the Financial Times:

Ofwat is facing its biggest fight with the regional water monopolies since privatisation three decades ago, after four companies said they would take the regulator’s latest industry price review to the competition authorities.

Northumbrian Water, Anglian Water, Yorkshire Water and Bristol Water are appealing Ofwat’s financial settlement, which sets out how much water companies can charge customers and how much they should invest in infrastructure over the next five years.

Thames Water, England’s largest water company, had been sharply divided as to whether to also appeal but decided to accept the settlement on the grounds that fighting it would lead to “significant management distraction”. The company, which has become a lightning rod for criticism of the sector, is still searching for a chief executive after Steve Robertson was forced out by the board nine months ago.

The scale of this year’s appeal to the competition authorities is unprecedented in the water industry and comes as Ofwat seeks to respond to accusations that it has failed to protect consumers adequately since water companies were handed to private companies almost free of debt in 1989.

The watchdog, led by former Anglian Water boss Jonson Cox, has demanded the companies cut water bills by an average of £50 over the five-year period and slashed their permitted return on investment from about 3.75 per cent to 2.96 per cent, potentially lowering dividends.

The regulator believes the settlement will allow water companies to deliver adequate infrastructure and service improvements. At the same time it wants to reduce their ability to “outperform” financially, or carry out the investments for less money, which under the complicated regulatory system means they could retain a portion of the excess for distribution to shareholders.

The water companies are accusing Ofwat of a short-term approach that prioritises bill cuts over investment and will leave them exposed to increasing public anger over leakage and pollution incidents. They also believe the regulator is penalising current investors for previous shareholders’ past excesses.

Rachel Fletcher, chief executive of Ofwat, said: “We have been clear that shareholders’ rewards will only be earned through a new standard of operational excellence. Some investors have accepted this scale of ambition and change, but others need to face up to the new reality.”

Financial Times

Scottish Power launches 100% green energy tariff

Scottish Power is launching a new tariff in which it guarantees that 100% of the electricity will come from its own renewable energy projects, to mark it out from so-called “greenwashing” energy deals that are not as clean as they seem.

The consumer group Which? found that many suppliers are misleading eco-conscious customers by claiming to offer renewable energy tariffs without ever investing in renewable energy projects.

Which? said that “pale green” suppliers are boasting green credentials by exploiting an industry loophole enabling them to buy cheap renewable energy certificates to match the electricity they supply to customers, while buying the power from another source.

Ofgem, the energy regulator, said earlier this month that it was aware of growing concerns about greenwashing in the energy market and would take action to ensure consumers were not misled.

Keith Anderson, the chief executive of Scottish Power, said: “With an increasing number of green tariffs in the market, it’s important that consumers understand how ‘green’ their tariff is in terms of supporting the UK renewables industry.”

Green energy developers typically sell renewable certificates alongside their electricity supply deals so that buyers can prove the origins of their energy. But industry rules mean the initial buyer is free to sell the certificates, without selling the green energy, to a second buyer.

“There are lots of suppliers running around, slapping a bit of green paint on their logo and trading bits of paper to claim they’re green. But buying and selling certificates doesn’t help tackle climate change – building wind farms and solar projects is what we need to do,” Anderson added.

Scottish Power sold off all its fossil fuel projects in 2018 to focus on growing its stable of onshore and offshore wind farms, and developing a portfolio of solar power projects.

The Guardian

British Gas scraps rise in minimum meter top-ups after public outcry

British Gas has scrapped an increase in the minimum top-up amount for its pre-pay energy meters after a public outcry over the move which opponents argued forced some vulnerable families to choose between eating and heating.

More than 90,000 people signed a petition calling for the UK’s biggest energy supplier to reverse their decision to raise the minimum top-up amount from £1 to £5 which was put in place on 1 January this year.

Activist group 38 degrees, which helped to spearhead the campaign, said the hike meant homes that rely on small top-ups to ration their heating costs between pay days were forced to choose between staying warm and buying food.

British Gas, which recently revealed its worst ever full-year profits for 2019, justified the hike by pointing out that only a small number of its pre-pay customers would regularly top-up their meter with less than £5 at a time. The supplier added that rivals at Ovo Energy and Bulb Energy have set a £5 limit to keep costs low.

Sarwjit Sambhi, the boss of British Gas, said “customers are always at the heart of the decisions we make” and the “aim of this move was to keep our costs down in order to offer our customers the best value”.

“But I am happy to change this decision whilst we continue to look at ways that we can help our most vulnerable customers,” he said.

About 91,000 members of the public signed a petition set up by Preet Kaur Gill, the MP for Birmingham Edgbaston, which called on British Gas to reverse their decision. Hundreds of people also contacted the supplier to share how they were affected.

Trevor, a British Gas customer from Stafford who signed the online petition, said: “I am disabled and so rely on benefits to get by. Sometimes you just haven’t got that fiver to top up the meter – because you’re not getting paid until the end of the week – so you can’t. It means choosing between things like food, and heat – and in cold weather it’s even worse.”

Gill said the British Gas U-turn is “a vital win for the thousands of people affected by British Gas’s decision to raise the minimum pre-pay top-up”.

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