Weekend press round-up: Octopus loses a friend over link to fracking and coal

In our latest review of sector coverage across the national newspapers, Friends of the Earth has ended its partnership with Octopus Energy after it took investment from Origin. Meanwhile, the group that claims to have hacked Elexon is now asking for a ransom from the company. There were also reports on water company responses to May’s unseasonably warm weather and on plans for the UK’s “first consumer-owned windfarm”.

Octopus loses a friend over its link to fracking and coal

A leading green charity has ditched its partnership with Octopus Energy after the supplier took investment from an Australian group with interests in coal and fracking.

Friends of the Earth endorsed Octopus in October last year because of its “100 per cent renewable electricity” offering, making it one of only three household energy suppliers to get the backing of the influential group.

Under the arrangement, the environmental charity gained a £30 “donation” — effectively a referral fee — from Octopus for every customer that signed up on its recommendation.

However, in a statement released online, Friends of the Earth said that it had “made the difficult decision to cease working with Octopus, after it accepted investment from an Australian energy company involved in coal power generation and fracking”.

Octopus Energy, which promises to offer “energy that’s good for the planet”, was founded in 2015 and has grown rapidly to have about 1.5 million customers. It is majority-owned by Octopus Group, a firm that backed Zoopla and Secret Escapes and is Britain’s largest investor in solar power.

At the end of April Octopus Energy sold a 20 per cent stake in the business to Origin Energy, an Australian power group, in a move that valued the business at more than £1 billion.

Greg Jackson, Octopus Energy’s chief executive, said at the time that he was “sure some people will question our choice of a partner with some serious fossil-fuel operations”, since Origin “owns a large coal-fired power station, and also exports liquid natural gas”. Origin is also seeking to frack for shale gas in Australia’s Northern Territories. Mr Jackson said that “almost every potential investor with deep enough pockets had some interest in fossil fuels” and that Origin had been “refreshingly upfront that they need to become greener”.

Friends of the Earth said: “Although we acknowledge that Octopus Energy is part of the largest group to invest in solar energy in the UK, the new investment is too much of a direct conflict with the vision and mission of Friends of the Earth. That’s why we took the decision to end our relationship with Octopus with immediate effect.” It said that it wished “Octopus well with its continuing mission to make green energy more accessible across the UK”.

Mr Jackson said that Octopus Energy had been founded to combat global climate change, which meant helping so-called brown companies to go green. “Origin’s investment allows us to devote hundreds of millions of pounds to accelerate the transition to renewables in the UK and around the world, whilst giving them access to our technology to make their own company greener, faster,” he said.

“Whilst we and Friends of The Earth have different approaches to turning the world green, we’ll continue to support each other in this mission.”

The Times

Boris Johnson considers giving drivers up to £6,000 in diesel and petrol car scrappage scheme

Drivers will be given up to £6,000 to swap their petrol or diesel cars for electric ones under plans being considered by Boris Johnson ahead of a major speech to relaunch the economy.

The move is designed to provide a shot in the arm for UK electric car manufacturing and for the car industry as a whole after it was devastated by the coronavirus lockdown.

Mr Johnson is understood to have pencilled in Monday, July 6 for the speech, in which he will set out his plans to get Britain back on its feet. Rishi Sunak, the Chancellor, is expected to make a statement on the economy shortly afterwards.

It comes as Business Secretary Alok Sharma announced the creation of five new business-focused groups to “unleash Britain’s growth potential and create jobs” as part of the bounce back plan.

The Prime Minister is determined to press ahead with the Conservatives’ manifesto commitments, including “levelling up” the country with investment in poorer areas and carrying out large-scale infrastructure projects such as HS2 and 40 new hospitals.

With the third phase of lifting the lockdown due to be announced on July 4, Mr Johnson wants to pivot the nation’s thinking from survival to recovery, and Government departments and business groups have all been asked to contribute ideas for the relaunch.

The Telegraph understands that one of the most eye-catching ideas currently intended for the speech is a new car scrappage scheme, inspired by Gordon Brown’s diesel scrappage drive but this time focused on electric vehicles.

Beginning next week, Mr Sharma will chair the first meetings of new “recovery roundtables” bringing together businesses, business representative groups and leading academics.

The aim is to come up with measures to support economic recovery and ensure the UK is at the forefront of new and emerging industries. They will focus on industry, the green economy, supporting start-ups, skills, and investment.

Daily Telegraph

Hackers who hit grid taunt Elexon with dark web files

Hackers who shut down a critical part of the UK’s power grid in May are offering alleged stolen material on the dark web after successfully holding part of the network hostage.

REvil, the group allegedly responsible for the hack, has posted a number of confidential documents – including passport copies and financial records – to a dedicated site on the dark web, claiming they are from network middleman Elexon.

Elexon handles £1.7bn of transactions between power plant operators and electricity suppliers every year and is a key player in the power supply chain that keeps the lights on for British households.

After leaking a sample of the data it has allegedly stolen, which includes what it claims is a passport scan of one of Elexon’s most senior executives, REvil is now demanding a ransom from the company.

In a taunt posted alongside the documents, the group said: “We are waiting.”

REvil’s decision to publish some of the alleged Elexon data suggests that the company has opted not to pay the ransom being demanded by REvil, according to Brett Callow, a threat analyst at Emsisoft.

He said: “The fact that Elexon is still listed on the leak site and that REvil is publishing the company’s data indicated that it elected not to pay.

“Still, the group may be hoping to elicit a payment from the company by showing it is prepared to leak its data.”

The company has so far declined to say how much REvil demanded as payment for the data, or whether it has managed to regain control of all of its systems yet.

Elexon, which plays a critical role as a clearing house for Britain’s power generators, has not responded to multiple requests for comment.

Elexon said previously that it had identified the root cause of the attack, but did not provide any additional details.

According to cybersecurity firm Bad Packets, hackers may have got into Elexon through an old system.

Several experts said the company appears to have been running an outdated version of Pulse Secure VPN – software that allows employees to connect remotely – for a significant period of time.

Warnings about the vulnerabilities of Pulse Secure VPN have existed since last year, and customers have been urged to update their systems to a newer, more secure version.

Experts say that REvil may have previously exploited the same flaw to hack Travelex, the foreign exchange company, which was asked for a ransom of £2.3m to retrieve stolen data.

Daily Telegraph

Hosepipe ban threat: After the sun, here comes the drought

They are renowned as the wettest places but Wales, the Lake District and parts of Scotland and Yorkshire have become so dry that many areas are already in drought with some at risk of wildfires, scientists have warned.

The warning was echoed by water companies, several of which have called for a voluntary hosepipe ban, as the Met Office long-range forecast suggested the summer would be as unusually hot as the spring.

The alert comes despite the showers hitting some areas of southern England and Scotland this weekend. Though some were heavy they were too short to make much difference.

In southern England the soil is now so arid that there is a state of “agricultural drought”, risking widespread crop damage, according to the UK Centre for Ecology and Hydrology (CEH) research institute.

Some water companies are facing problems. Welsh Water said demand had surged from 800 million litres a day to more than a billion last weekend and asked customers to follow a voluntary hosepipe ban.

Anglian Water said the past two months had seen demand from its 4.3 million customers surging by 20% with an additional 200 million litres daily, equivalent to each customer drinking 80 cups of tea a day.

This week scientists from CEH will publish a national survey of UK rivers and soil moisture, with data showing water levels are among the lowest recorded in many areas.

Jamie Hannaford, principal hydrologist at the CEH, said: “River flows are far below normal from Cornwall to northeast Scotland. Some rivers in Wales, southwest England, northeast England and northeast Scotland are already at record low levels.”

The findings are a powerful contrast to February when a series of storms hit the UK with torrential rain resulting in record high water levels.

Last week the government convened its national drought group to prepare for possible shortages this summer.

The Times

First wind farm to be owned by its customers

An energy start-up is launching Britain’s first “consumer-owned wind farm”, offering people the chance to buy a share of a turbine in return for receiving the electricity it produces.

Ripple Energy is aiming to sign up about 2,000 households in the UK to crowdfund the £4.3 million construction of the pilot, one-turbine project at Graig Fatha Farm near Coedely, north of Cardiff.

People that buy shares in the Graig Fatha co-operative will be securing the right to a proportion of the electricity it will produce. Under an arrangement with Co-op Energy, run by Octopus Energy, when the turbine starts generating in 2021 the households involved will be supplied with that electricity at a cheap rate that covers the low running costs of the turbine.

Ripple argues that this should be substantially cheaper than if the supplier had bought electricity from other generators at commercial rates in the wholesale market.

The company says that the upfront cost for a typical household would be about £1,900 for a share of the wind farm, which should generate enough electricity to meet their needs for the estimated 25-year lifetime of the project, as well as a fee to Ripple. Households will still have to pay the network charges, levies and taxes that are on all domestic electricity bills.

Ripple estimates that in a typical year a customer could reduce their electricity bill by about 26 per cent and says that the savings should repay the upfront investment in about 14 years.

The proposition is not for the faint-hearted: as well as the capital at risk from the unsecured investment in the co-operative’s shares, Ripple admits that any savings will be “highly dependent on the wholesale price of electricity and the wind turbine’s yields”.

People wanting to buy shares will have to switch to Co-op Energy or be existing customers of either Co-Op or Octopus. After a year they will be able to switch only to approved supply partners. Those wanting to sell their share will have to wait at least two years and until another member of the co-operative wants to increase their stake.

The Times

Bradwell B: the only way is nuclear for Chinese deal to put reactor in Essex

The last time Britain got cold feet over China’s nuclear power ambitions, it nearly caused a diplomatic incident.

In July 2016, as dignitaries were en route from Beijing and Paris for a signing ceremony at Hinkley Point on the Somerset coast, then prime minister Theresa May announced a surprise review of China’s role in building the nuclear power station.

A marquee had been erected and a menu planned: Cantonese-style pork, Somerset brie and mackerel ceviche with crème fraîche.

It took two months, security concessions and a golden share deal before May reluctantly agreed to allow China and France to proceed with the £18bn project, Britain’s first new nuclear power station in a generation.

An uneasy peace followed. Hinkley Point C is years late and its budget has risen to £22.5bn, but its hulking form continues to rise slowly, fuelled with cash from France’s EDF and China General Nuclear Corporation (CGN), which own two-thirds and a third respectively.

After Hinkley will come Sizewell C in Suffolk, where EDF has submitted plans for another £18bn power station, with CGN a 20% partner. However, the ultimate goal is Bradwell B on the Essex coast. As part of its “Belt and Road” initiative to gain dominance with money, technology and diplomacy, China wants not just to fund Bradwell, but to build its own reactors there.

CGN intends to install a version of its HPR1000 nuclear reactor at Bradwell and be two-thirds owner, with EDF the junior partner. With a seal of approval from the UK — home of the strictest nuclear regulators — China can then sell the reactor round the world.

The design of the HPR1000 is being pored over by the Office for Nuclear Regulation and cyber-security officials. Approval is edging closer — probably late next year. That makes Bradwell an intensely political decision. Letting China bankroll Hinkley is one thing; putting its reactors 40 miles east of London quite another. If Huawei’s involvement in the UK’s 5G network caused a storm, this will be a hurricane.

Former Conservative Party leader Sir Iain Duncan Smith said last month that Sizewell would be “the next Huawei”. Sceptical Tory MPs have formed the China Research Group to scrutinise the communist state, heaping pressure on Boris Johnson to review Huawei’s role.

Having rolled out the red carpet for CGN — encouraging it to spend £3.5bn so far — ministers risk embarrassing China for a second time, either by overruling the nuclear watchdog or delaying final approval for Bradwell.

Beijing has made its thinking clear. In a meeting with business minister Nadhim Zahawi last month, Zheng Dongshan, CGN’s UK chief executive, is understood to have demanded clarity on its involvement in the UK’s nuclear power programme, warning that financial support for Hinkley may be at risk — particularly if, as expected, the plant’s budget balloons further. CGN is also considering investing in Sizewell only at the planning stage, and then switching focus to getting its reactor regulated.

Sunday Times

Ofgem under fire over scrapping of cheaper gas tariffs for industry

Some of the biggest names in industry have attacked the energy watchdog Ofgem after it bowed to EU pressure to axe cheap gas tariffs and left them facing tens of millions in extra costs.

Heavy gas users in Teesside such as Ineos and BOC have benefitted from cheaper transmission charges for more than 20 years, as they are close to terminals where gas is piped ashore.

Ofgem is ending the so-called “short-haul tariff” from Oct 1 to comply with EU regulations on harmonised prices, which companies warn may result in a 25-fold rise in transmission costs just as they face up to Covid-19 and Brexit.

Ben Houchen, the Teesside mayor, also waded into the row, calling the looming hike “extremely damaging”, while critics added that the move contradicted Government ambitions on “levelling up” the regions.

The chemicals sector supports an estimated 32,000 jobs in the area.

CF Fertilisers, based in Billingham, is the biggest user of gas in the country, taking around 1pc of the UK’s gas imports everyday – equivalent to the amount used by Liverpool and Manchester.

The company said its bill is likely to soar from around £250,000 a year ­under the current tariff to £5.6m.

David Hopkins, CF’s managing director, said Ofgem’s move would impose “unfair and highly detrimental new costs on our Teesside facility, as well as other businesses in the region”.

David Mitchell, senior energy executive at the Chemical Industries Association, said 37 short-haul users paid almost £29m a year in charges, which could surge to more than £150m without the reduction. That could prompt bigger firms to build their own connections and shun the National Grid network, forcing up costs for other users.

Mr Mitchell said: “They don’t see the wider levelling up agenda, economic prosperity of the north or rebalancing coming into their equation. That’s a Government policy, not an Ofgem policy.”

Mr Houchen, an architect of Boris Johnson’s freeport policy pushing to turn Teesside into a tax-friendly enterprise zone, said he would press the Government to scrap the “unnecessary and damaging” EU regulations following the end of transition next January.

He said: “These unelected bureaucrats in Brussels pass laws we have no say on, which could be extremely damaging to Teesside industry, right at the time when we are looking to unleash the potential of the South Tees Development Corporation site.”

Andrew Large, chairman of the Energy Intensive Users Group, also questioned the regulator, adding: “I’m concerned that Ofgem is not meeting its mandate to represent the interests of all energy consumers.”

Ofgem insisted higher tariff charges would be partially offset by lower gas and electricity bills, although the firms dispute this. Ofgem said: “A small number of businesses that are directly connected to the transmission network will face an increase in their tariffs for gas transmission on average. However, this increase will be largely mitigated by a decrease in the price of gas and electricity they consume.”

Sunday Telegraph

Covid-19 relief for fossil fuel industries risks green recovery plans

The failure of governments and central banks to set out a green recovery from the coronavirus crisis is threatening to derail vital UN climate talks aimed at staving off global catastrophe, campaigners have warned.

On Friday, the UK and the UN attempted to revive the stalled Cop26 climate talks, with a coalition of businesses committing to a Race for Zero, signing up to reduce their emissions to net zero by mid-century. Close to 1,000 businesses have joined the campaign, including household names such as Rolls-Royce and the food and drink majors Nestlé and Diageo.

Mark Carney, former governor of the Bank of England and UN special envoy for climate and finance, said: “The transition to net zero is creating the greatest commercial opportunity of our time. Net zero targets must be underpinned by transition plans so that investors can assess which companies will seize the opportunities in the transition and which will cease to exist.”

But rhetoric is not enough while central banks are still pouring money into propping up “business as usual”, according to campaigners.

“It’s been great to hear the government’s warm words about the green recovery, but what really matters now are the policies and investments needed to make it a reality,” said Morten Thaysen, green recovery campaigner at Greenpeace UK.

“The UK has a chance to lead on the world stage next year with Cop26, and set an example of what building back better actually looks like. Committing to this ahead of the climate talks will show international leadership on what a truly green recovery looks like.”

The vast majority of the stimulus money so far announced by governments around the world is set to prop up the fossil fuel economy, according to analyst company Bloomberg New Energy Finance. More than half a trillion dollars worldwide – $509bn (£395bn) – is to be poured into high-carbon industries, with no conditions to ensure they reduce their carbon output.

Only about $12.3bn is to go towards low-carbon industries, such as renewable energy, and a further $18.5bn into high-carbon industries provided they achieve climate targets.

The current and former governors of the Bank of England, Andrew Bailey and Mark Carney, joined François Villeroy de Galhau, governor of the Bank of France, to write in the Guardian of the need for a green recovery. They said: “The economic recovery plans being developed today offer the chance to build a sustainable, competitive new economy.”

However, the first disclosures from the Bank’s Covid Corporate Financing Facility this week showed that billions of pounds of taxpayer support are being funnelled to fossil fuel companies. Airlines have taken up about £1.8bn of the £16bn already allocated from the funds, which could top £67bn when fully disbursed, while carmakers have benefited by more than £1bn so far and two oil service companies, Baker Hughes and Schlumberger, are taking £600m and £150m respectively.

Britain’s role as president of Cop26 means the UK government has a crucial role to play if these trends towards a bailout of the high-carbon economy are to be reversed and the world is to reach net zero emissions. The vital UN summit, postponed by a year to November 2021, is seen as the last chance to put the world back on track to meet the Paris agreement on climate change, and avoid catastrophic levels of global heating. For Cop26 to be a success, the government must lead by example in setting out a green recovery, experts concluded.

“The clock is ticking for the UK to show it’s serious about a green recovery,” said Chris Venables, head of politics at the Green Alliance thinktank. “We’ve heard bold and ambitious words from Boris Johnson and other ministers, but with the first stimulus package only weeks away we need to see the government’s plans to support its ambitions. We need to take some big steps. Let’s fire the starting gun on a real green recovery.”

The Guardian

Ed Miliband launches Clement Attlee-style green rescue plan

Ed Miliband is unveiling plans for a green economic rescue from the coronavirus crisis, in his first major policy initiative since his comeback to front line politics.

The former Labour leader, who was appointed shadow business secretary last month, is proposing a recovery plan focused on retraining a “zero-carbon army” of young people who lost their jobs to work in green industries.

And he claims the economic damage caused by coronavirus and the need to tackle climate change requires ambition on the scale of Clement Attlee’s post-war Labour government.

It has been estimated that 600,000 young people could become unemployed this year because of COVID-19 and Mr Miliband wants to “kick-start a green recovery”.

He is proposing a scheme in which the government pays the wages of young workers on eco-projects such as planting trees, insulating buildings and working on green technologies.

Mr Miliband told Sky News: “There are of course very big financial pressures as a result of this crisis.

“But I agree with the government on this – not acting costs more than acting.

“Because if we don’t act now to save jobs, to put people back to work, we will pile up large benefit spending for the future, we will reduce our tax revenues and we’ll have a smaller economy.

“That will make our debt harder and not easier to finance.”

Highlighting the UK’s commitment to reach net-zero carbon emissions by 2050, he added: “We’re going to have to do this anyway because, by 2050 at the latest, we’re going to have to have zero emissions as a country.

“So it makes financial sense too.”

Mr Miliband, appointed back to Labour’s front bench by new Labour leader Sir Keir Starmer, is launching a consultation on the policy with Labour’s shadow chancellor Anneliese Dodds.

Labour is seeking proposals on:

How jobs can be retained, supported and created in the green economy of the future

Helping businesses transition to a green economy as part of the recovery

Focusing public and private investment on green technologies, research and innovation

Redeploying and retraining people from industries where people have lost their jobs

Rewilding, reforesting and restoring natural spaces

Labour says it wants to encourage businesses, unions, workers, green campaign groups and the public to submit ideas on what a green recovery should look like.

The aim is to come up with a green jobs plan to reduce unemployment, stimulate the economy and invest in green industries of the future.

Sky 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.