Weekend press round-up: Bulb boss mulls float

In our latest review of sector coverage across the national newspapers, Bulb founder Hayden Wood sets out his ambitions for the energy retailer. Meanwhile, a new report has found a dramatic fall in water pollution prosecutions over the past decade. There is also an investigation into the use of solar panels made by Chinese companies accused of exploiting forced labour camps in Xinjiang province in projects run by UK utilities.

Bulb boss mulls float

Bulb Energy has enjoyed a rocket-fuelled trajectory since launching six years ago – and its chief executive does little to dampen speculation that he’s eyeing up another growth spurt.

When asked to confirm rumours the green energy firm is considering a further multi-million-pound fundraising, Hayden Wood says he has ‘plans to continue Bulb’s mission and to grow rapidly’.

And he even hints he could float the company on the stock market through an initial public offering in the future. ‘It’s something we would consider,’ says Wood, 37, who poured his life savings into Bulb in its start-up phase and owns a fifth of the business.

‘It’s not something we are planning to do right now. But I would love to give Bulb members [customers] the opportunity to buy shares in Bulb if they want to. That’s all I’ll say.’

Wood, a former management consultant, co-founded Bulb in 2015 with his friend Amit Gudka, a former Barclays energy trader. They felt the energy market had become broken under its dominance by the old ‘Big Six’ energy suppliers and set out to provide a cheaper, greener and simpler alternative.

Over the past year, Wood says Bulb has won ‘hundreds of thousands’ of customers who have mostly switched from firms such as British Gas and EDF, making it the sixth biggest energy supplier in the UK behind Scottish Power. It has 1.7million customers globally, up from 15,000 in 2017, and has just hit 50,000 international customers after expanding overseas last year to France, Spain and Texas.

Wood admits the rapid expansion has been stressful, saying it has sometimes felt as though ‘we had to be building the plane while we are flying it’. He was ‘gutted’ when the pandemic hit last March because the workload meant he couldn’t take paternity leave to spend time with his baby daughter.

The pressure has also led to allegations of a bullying culture at the firm – issues that Wood says are now firmly in the past.

But the pace shows no sign of slowing for Bulb, which was named as Europe’s fastest-growing startup in March and hired 400 staff over the pandemic, swelling its employee ranks to 1,000.

Under Wood’s ambitious ten-year plan he wants to supply 100 million customers globally by 2030. Bulb aims to make a £50 profit per household, on average annual energy bills of around £1,000, taking turnover to around £1.8billion.

He calls the climate crisis ‘a race against time’ and says he has to expand Bulb’s green energy supply to help hit net zero targets. ‘If we deliver our plan we think we will be able to save around £60billion on people’s energy bills and around 800 million tons of carbon dioxide,’ he says.

‘Without setting these really ambitious goals we are just not going to get there.’

Bulb has received £67million investment to date, with the bulk from hedge fund Magnetar Capital and Russian billionaire Yuri Milner’s firm DST Global, an early investor in Deliveroo, Facebook and Twitter. Wood sees Bulb as much as a tech start-up as an energy firm. And like many young tech companies, Bulb has run up large losses as it invests heavily in expansion, with a £63million loss over the year to the end of March 2020.

Wood will not confirm whether it moved into profit this financial year because the company is in ‘growth mode’. His overall vision for Bulb is to transition from an energy supplier to an ‘energy manager’, offering technological solutions and products such as home batteries for solar panel owners and smart electric vehicle charging.

Mail on Sunday

UK solar projects using panels from firms linked to Xinjiang forced labour

Solar projects commissioned by the Ministry of Defence, the government’s Coal Authority, United Utilities and some of the UK’s biggest renewable energy developers are using panels made by Chinese solar companies accused of exploiting forced labour camps in Xinjiang province, a Guardian investigation has found.

Confidential industry data suggests that up to 40% of the UK’s solar farms were built using panels manufactured by China’s biggest solar panel companies, including Jinko Solar, JA Solar and Trina Solar.

These firms have been named in a recent report on the internment of more than 1 million men and women from the Muslim Uyghur community, in what UK MPs on Thursday voted to describe as genocide.

Companies with factories or major suppliers in Xinjiang produce about a third of the polysilicon material used to make the world’s solar panels, according to a detailed report by the US consultancy Horizon Advisory. China is the world leader in polysilicon production.

The report found that Chinese solar companies had ties to indicators of forced labour in Xinjiang, where Uyghur are interned, via this polysilicon production.

China’s repression of the Uyghurs is believed to have developed into systematic detention about 2016, with reports of forced labour emerging from the region in the years since.

While many were built before 2016, the Guardian has found a string of more recent deals that raise questions about how carefully UK businesses and government agencies are vetting their supply chains.

Many manufacturers in China’s solar industry operate factories in countries across Asia but may still use the raw polysilicon materials produced in Xinjiang, making it difficult to determine whether a particular production line has been exposed to alleged labour exploitation. China limits access for outside observers and media to Xinjiang.

The UK Ministry of Defence (MoD) this month revealed plans to install the first of 80 solar farms on the army estate at Leconfield, east Yorkshire, using thousands of panels made by Trina Solar as part of a deal with the UK energy firm Centrica.

The MoD did not answer questions about what checks it had made on the companies’ supply chains, or whether panels with potential links to forced labour had been used on other sites. An MoD spokesperson said: “We have robust procedures in place that allow us to vet and routinely monitor all aspects of our supply chain, which is kept under constant review.”

Some of the UK’s most prolific solar developers have used panels from the Xinjiang-linked companies. The Guardian has found that panels from the Chinese companies were used in projects built since 2016 by the FTSE 100 water company United Utilities, Scottish Water, and large solar developers including Bluefield Solar, Foresight Solar, and Solarcentury, owned by Norway’s Statkraft.

The Guardian

Water pollution prosecutions fall despite stagnation in improving rivers

Prosecutions brought by the government’s Environment Agency for water pollution in England have fallen dramatically over the past decade despite no improvement in the quality of the nation’s rivers, according to analysis of official data.

Court actions brought by the Environment Agency for water offences fell from a peak of 235 in 2002 to just 20 in 2019, and three last year, according to a report by Salmon and Trout Conservation (S&T), a campaign group.

Since 2011 the government has favoured so-called enforcement undertakings, which enable England’s privatised water companies to avoid costly court cases by donating a sum to environmental charities. But the analysis, which was based on official statistics, found there has been a marked decline in punishment even when taking their use into account.

Meanwhile, according to the agency, just 145 English rivers, or 14 per cent, reached good or better ecological status in 2019, down from 22 per cent in 2009, according to the EU’s Water Framework Directive. Even allowing for a 2014 change in method of assessing rivers, there has been no progress, the data showed.

In its report, timed to coincide with the regulator’s 25th anniversary this month, S&T said the regulator had “serious questions” to answer on whether it has done its job. It is “not monitoring, inspecting or prosecuting enough”, S&T said, adding that it was “pretending things look better than the rest of us know they really are”.

The Environment Agency is obliged by the 1995 Environment Act to regulate all pollution discharges as well as monitor groundwater abstraction and maintain and improve fisheries. But S&T found the quality of the freshwater environment was “nowhere near” the standards due to have been achieved by all water bodies in 2015.

At least 26 per cent of groundwater bodies have poor status, according to agency data. Stock surveys show 59 per cent of those water bodies are not achieving good or better status for fish, while 39 out of the 42 main salmon rivers are “at risk” or “probably at risk”.

However, the agency said the directive system “doesn’t provide a complete picture of the progress that has been made on improving water quality in England”.

The campaign group acknowledged that the agency had come under budget pressures, with funding slashed by about 60 per cent between 2008 and 2017.

But it warned that the cuts were having dire consequences. Although the agency carries out spot checks, the number of surface water bodies it assessed fell by around half in the five years from 2013 to 2018, even when taking into account a change in 2014 that ruled that smaller water bodies no longer required assessment.

Since 2008 the government has relied on water companies to report their own sewage discharges into rivers and seas, but that has reduced the deterrent to polluters and “opened the door” to cheaters, S&T argued.

The Financial Times

UK replaces France as Europe’s second largest electric car market

The UK overtook France to become Europe’s second largest electric car market in the first quarter of the year, amid rising demand for cars with zero exhaust emissions.

About 31,800 battery electric cars were sold in the UK in the first three months of the year, compared with 30,500 in France, according to analysis by Matthias Schmidt, an independent automotive analyst.

Electric car sales have risen rapidly since the start of 2020, in part because of new emissions rules that mean manufacturers face steep fines if their products’ average carbon dioxide output does not fall.

Battery electrics accounted for 7.5% of UK sales in the first three months of the year, according to industry data, almost doubling the market share compared with the same period in 2020.

Despite the coronavirus pandemic, 2020 was the first year in which European consumers bought more than half a million electric cars. That is expected to double to 1m sales in 2021, although pure electrics will still be only a tenth of the total European car market by 2024, according to Schmidt’s forecasts.

Germany is by far the biggest single market for battery electric cars in Europe, with 64,700 sold in the first quarter. That performance was helped in part by generous subsidies, doubled by the German government in June, to help its auto industry, which is key to Europe’s largest economy. Other markets are proportionately more advanced than the UK in moving to electric cars. Norway in 2020 was the first country in the world where more electric cars were sold than fossil fuel cars, thanks to generous subsidies.

Schmidt said: “The UK is likely to remain the number two European BEV (battery electric vehicle) market this year, albeit a long way behind market leader Germany, which manufacturers are relying on to meet European-wide targets thanks to the generous incentives on offer there.”

The Guardian

UK groups prepare to equip ‘Saudi Arabia of wind power’

On the south bank of the river Humber, on England’s east coast, land once considered for a coal-fired power station holds the hopes of the UK offshore wind industry.

The 217-hectare site close to the port of Immingham is one of two projects in the east of England that UK prime minister Boris Johnson said will “put the wind in the sails” of a “green industrial revolution”.

Owned by Able UK, a private industrial group, the Humber site will become a specialist port with deepwater quays, where manufacturers and suppliers can deliver components for wind farms and help create up to 3,000 “green” jobs.

Together with a facility on the River Tees, it has been awarded a share of up to £95m of government money as the prime minister seeks to turn the country into the “Saudi Arabia of wind power”.

The UK has the world’s biggest offshore wind projects and Johnson plans to quadruple capacity to 40GW in nine years — enough to supply clean electricity “to every home” and support up to 60,000 jobs.

Yet two decades on from the first wind project in UK waters, the industry has proved a disappointment to many British groups hoping to enter its supply chain. Companies have struggled to compete for contracts against rivals in Denmark, China, Germany and the UAE, which unions and developers say benefit from cheaper labour or stronger financial and policy support.

Developers of offshore wind farms in Britain have often prioritised price over provenance, as they have been encouraged to bid low in UK government auctions of subsidised renewable energy contracts. Ministers have been keen to drive down prices in “contracts for difference” auctions, in order to lessen the burden on consumers, who pay for renewable energy subsidies through their domestic fuel bills.

RenewableUK, a trade body, estimates that only 29p of every £1 of capital expenditure on UK offshore wind farms goes to British suppliers. Developers say that they have struggled to award contracts to UK facilities because existing manufacturing yards are in unsuitable locations or could not cater for wind turbines of increasing size and sophistication.

For now, trade unions in particular remain sceptical about Johnson’s rhetoric despite a flurry of announcements, including confirmation last month by General Electric, the US conglomerate, that it will build an offshore wind blade factory in Teesside, creating 750 jobs.

Sue Ferns, senior deputy general secretary of the Prospect trade union, says: “While recent government initiatives on offshore wind are small steps in the right direction, they still fall far short of the big leap we need to unlock the large numbers of green jobs that countries like Denmark are delivering.”

Despite scepticism, offshore wind industry leaders are confident that, given government backing, they can deliver on the targets set.

But they have warned ministers that there must be a compromise. They say that prices in contract auctions cannot continue to fall so steeply if they are to ensure a high percentage of British content in wind developments.

“Industry is ramping up its efforts to try to secure that [60 per cent target by 2030],” says Melanie Onn, the deputy chief executive of RenewableUK and a former MP for the nearby constituency of Great Grimsby.

However, she adds: “It is completely unreasonable to keep expecting ever lower costs and expect investment in the supply chain as well. It seems quite clear you can’t have both of those.”

The Financial Times

This article is part of the FT’s Future of Energy series. To see more (subscription required) click here

Half of technology needed to reach key 2050 climate change target not yet available

Half of the technology needed to reach emissions targets doesn’t exist yet, world leaders have heard, as they were warned that the “data doesn’t match the rhetoric” at a US-led climate summit.

Fatih Birol, head of the International Energy Agency, said that ambitious new promises made by countries at this week’s Leaders’ Summit on Climate needed to be backed up by action.

“It is clear that the level of commitment to fight climate change has never been higher. This is excellent news, but I will be blunt. Commitments alone are not enough. We need real change in the real world.

“Right now the data does not match the rhetoric, and the gap is getting wider and wider. Our latest estimates for global emissions in 2021, this year, are a warning for humanity.

“Emissions are on track for their second largest increase in history. We are not recovering from Covid in a sustainable way and we remain on a path for dangerous levels of global warming,” he said.

Analysis by the IEA shows that 45 per cent of progress to reaching net zero emissions in 2050, a pledge made by countries including the UK as part of climate goals, will need to come from technologies that are not yet ready for market.

The problem “calls for massive leaps in innovation across batteries, hydrogen, synthetic fuels, carbon capture and many other technologies,” Dr Birol added, calling it a “Herculean task”.

US Commerce Secretary Gina Raimondo said: “It’s a stunning statistic to think that 45 per cent of the emissions reduction we need to achieve must come from technologies that aren’t fully developed today. It’s really a call to action.”

Earlier in the conference the US pledged to cut the cost of hydrogen by 80 per cent by 2030. The gas has been touted as a green replacement for jet fuel and natural gas used in boilers, but is currently energy-intensive and expensive to produce.

Daily Telegraph

BP set to report strong start to financial year

Higher crude prices are expected to lead to a rise in quarterly profits for oil companies that could mean BP will begin its promised share buybacks.

BP and Royal Dutch Shell both report first-quarter results in the next few days and analysts are predicting a strong start to the year after a torrid 2020 of record losses and dividend cuts.

Their results should benefit from the rally in oil prices through the quarter. The success of vaccination programmes and economic stimulus packages boosted Brent crude, the global benchmark price, to an average of $61 a barrel, compared with an average of $50 a barrel in the same period of 2020.

BP and Shell are two of the world’s biggest oil companies, though both are embarking on strategic shifts towards lower carbon energy in pursuit of net-zero greenhouse gas emissions. Both racked up record losses last year — BP of $18.1 billion and Shell of $19.9 billion.

BP’s underlying profits could double to $1.6 billion, according to a consensus of analysts’s forecasts, while Shell’s underlying profits could rise by a tenth to $3.1 billion.

Bernard Looney, BP chief executive, has promised to give “further information on share buybacks” after the strong quarter helped it to pay down debt sooner than expected. It has pledged to return at least 60 per cent of surplus cash flow to shareholders once net debt is reduced to $35 billion, a threshold it expects to have met in the first quarter.

Lydia Rainforth, analyst at Barclays, said she expected that “BP will indeed start the buyback scheme this quarter, but only to a small degree”, suggesting it could aim to buy back about $200 million, an amount that would be “more symbolic”. “We think $1-2 billion is possible this year with a longer term run rate of $3-4 billion a year,” she said.

Both companies are also making big job cuts with BP losing 10,000 roles and Shell up to 9,000, which is expected to lower costs in the long term.

The Times

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.