Weekend press round-up: Coffey ‘fed up’ with water companies

Environment secretary Therese Coffey has said she is “fed up” with water companies, whilst conceding that their pledge to spend £10 billion tackling sewage discharges will largely be funded from customers’ bills. Also in our latest round-up of the weekend papers, the Environment Agency is condemned for “climbing down” to EDF over fish protection measures for the Hinkley Point C nuclear plant and an ex-Royal Navy head warns Russia may have planted sleeper explosives on offshore wind farms and underwater power lines.

Households will absorb cost of water companies’ sewage-spill prevention, Therese Coffey concedes

Customers will cover “a lot” of the cost of water companies’ action to prevent sewage spills, the Environment Secretary has conceded.

Water companies in England last week announced a £10 billion plan to reduce the number of sewage discharges into rivers and seas, while apologising for the pollution.

But campaigners were incensed that the proposals involve consumers being given higher bills to pay back the investment.

Therese Coffey, who said she was “pretty fed up” with water companies and that it was right for the sector to have apologised, confirmed that “a lot of” private sector investment in the water industry “gets repaid through bills”.

But she said penalties and fines that the private water companies are ordered to pay could see bill-payers reimbursed.

It comes after Anglian Water said last week that customer bills were likely to rise by £91 per year to pay for the £10 billion of industry investment, with £12 of that relating to storm overflow upgrades.

Storm overflow outlets, of which there are 15,000 in England, currently release excess sewage and rainwater when under strain, to prevent sewers becoming overloaded and backing up into homes.

Ms Coffey, asked on Sky News’ Sophy Ridge On Sunday programme whether it was correct to say consumers would foot the bill for the improvement works, said: “It’s going to be a combination.

“Of course penalties and fines are paid for by the company, not by the bill-payer.

“But in terms of general payments, I think you’re right to say that a lot of this investment gets repaid through bills.”

The Environment Secretary said the £10 billion announced by the private sector would feed into an overall UK Government £56 million storm overflow plan.

She has called on water firms to have an action plan for “every single storm overflow” on her desk by the end of next month.

There were 301,091 sewage discharges in 2022 in England which amounted to 1.75 million hours of discharge, according to Environment Agency figures, though they do not include the volume of sewage.

The Government’s storm overflows discharge reduction plan, published in August 2022, aims to eliminate sewage dumping by 2050 while cutting discharges close to “high priority” areas by 75 per cent by 2035 and 100 per cent by 2045.

Ms Coffey used an interview on the BBC to criticise the record of other countries within the UK on dealing with sewage leaks.

She told the Sunday With Laura Kuenssberg programme: “Frankly, we would not even know about this if it wasn’t for a Conservative Government insisting on the monitoring and the publication of that data.

“We’re not seeing that in Scotland. And frankly on average, the frequency of sewage flows is happening far more in Wales than it is in England.”

Monitoring stations for Welsh Water, a non-profit organisation, show the company discharged sewage for 602,987 hours in 2022, while publicly owned Scottish Water recorded 14,008 spills in 2022 amounting to 113,230 hours.

The Telegraph

The Guardian view on England’s water companies: a badly broken system

The revelation should anger all who care about England’s rivers and beaches. Two decades ago, ministers were warned about private equity firms buying up water companies. In a briefing prepared for Britain’s competition regulator prior to the takeover of Southern Water, researchers raised the alarm that private equity-owned water companies would become “impossible” to regulate. Despite the 20-year transparency rule, the Competition and Markets Authority (CMA) has not released the briefing. Its existence was uncovered by this newspaper. Though its full contents remain secret, its implications are clear: ministers were alerted to the devastating impact that this industry could have on England’s water supply, but they chose not to act.

Since then, a tide of effluent has polluted England’s rivers. Following the privatisation of water companies in 1989, owners have enriched themselves while neglecting infrastructure and dumping vast quantities of untreated sewage. As investors have loaded water companies with debt, they have continued to pay dividends to their shareholders, which totalled £1.4bn last year. The public, meanwhile, have shouldered the costs. Water bills have risen. Last week, the industry apologised for these sewage spills and pledged to invest £10bn in infrastructure – to be paid for by increases in customer bills. Ruth Kelly, the former Labour cabinet minister who is head of the industry’s trade body, Water UK, said more should have been done to address the spillages. She was silent on the subject of dividend payments.

The main line of defence for consumers is supposed to be Ofwat. Yet water companies have run rings around the regulator. Its rules are premised on a version of capitalism that no longer exists. When it was founded in 1989, England’s water suppliers were listed on the stock market, allowing anybody to buy shares in this public resource. Today, most of them have been bought up by investment funds that do not face the same disclosure requirements. Opacity has shielded their finances from scrutiny. Since 2015, water companies have been required to demonstrate their “financial resilience”, and Ofwat will now prevent negligent ones from paying out dividends. But the horse has already bolted, and many of the firms responsible for loading these companies with debt have already moved on.

The regulation of England’s water suppliers is grounded in the illusion that it is possible to promote competition in a marketplace of natural monopolies. A narrow focus on competition and prices has led Ofwat to largely ignore other crucial issues such as the environment and the cost to taxpayers, and to overlook the risks posed by financial engineering. In 2007, for example, it credulously took the view that firms’ capital structures (and by implication their dividend payments) “are essentially a matter for companies and the markets”. Meanwhile, the CMA, which has been urged to do more to prevent private equity buyouts, has no remit to investigate these issues. Neither regulator was designed with this industry in mind, and both now find themselves outmanoeuvred by its tricks.

The Guardian

Environment Agency condemned for suggesting Hinkley C could drop fish deterrent measures

THE Environment Agency has been condemned for ‘cravenly climbing down’ in the face of a demand by EDF Energy to be excused from providing an acoustic fish deterrent (AFD) for its Hinkley Point C nuclear power project.

The UK/Ireland Nuclear Free Local Authorities (NFLA) has urged the agency not to waive the requirement, which anti-nuclear campaigners estimate would save the lives of 11 billion fish during the power station’s operating life.

It said the agency’s latest recommendation represented a complete volte-face on its previous position on the permit requirements, which was taken after an in-depth examination by an inspection team and verification by the Secretary of State.

NFLA England forum chairman Cllr David Blackburn said: “The consequences of the Environment Agency granting this concession will be catastrophic for the local fish population and marine environment.

“The NFLA also believes that any variation in the permit sets a dangerous precedent which shall enable EDF Energy to avoid any requirement for AFDs at any future new development initiated by the company in the UK.

“Lastly, it makes a mockery of public consultation, because what is the point responding again and again to consultations and making presentations to inquiries, demonstrating conclusively the validity of your case, when senior civil servants simply cave into any clamour from EDF Energy?

“EDF Energy is attempting to browbeat the Environment Agency into conceding to their demand for the removal of the Acoustic Fish Deterrent because Hinkley Point C is, like the company’s other headline nuclear projects at Flamanville and Olkiluoto, being delivered massively over budget and massively behind schedule.

“We contend that this application is being made by EDF Energy to save money and save time at the expense of the natural environment.

“Hinkley Point C will take millions of gallons of water from the Bristol Channel to cool the plant and then discharge this water back into the sea.

“Without AFDs, alongside other measures for marine life preservation, millions of fish and other forms of sea life will be sucked into the plant every day and killed.

“Unmitigated, operations at Hinkley Point C will also drastically reduce the number of eels successfully making the long journey back to the Sargasso Sea breeding grounds.”

…

An EDF spokesman said although many power stations had taken cooling water from the Bristol Channel, Hinkley C would be the first to include any fish protection measures at all.

He said two protection measures had been proposed, the first of which was to include a fish recovery and return system and special water intakes.

These were designed to slow down the water entering the cooling system to allow fish to swim away and were also placed in a way which meant tides carried fish over and around the intake heads.

The spokesman said: “It is a big improvement from older power stations that we have seen around our coastlines.

“An acoustic fish deterrent system is a relatively new technology that was in its concept stages when it was proposed in our original planning application.

“We asked to install the first two fish protection measure but make a change to remove the acoustic fish deterrent.

“Even without the acoustic fish deterrent installed, Hinkley Point C will have a negligible impact on the fish populations in the Bristol Channel.

West Somerset Free Press

Food to overtake energy as main driver of inflation

Families face a £1,000 increase in their annual shopping bills as food overtakes energy as the main driver of the cost of living crisis.

Spiralling food and drink prices means grocery bills will on average be £1,000 above 2020 levels by July, according to calculations by the Resolution Foundation.

At the same time, energy bills are expected to fall in the coming months as gas prices come down and the Ofgem price cap is lowered.

As a result, food cost will replace energy as the biggest driver of inflation. A total of 16 million households – equivalent to 56pc of all families in the UK – will face a greater food than energy shock from this summer onward, the Resolution Foundation said.

Lalitha Try, an economist at the Resolution Foundation, said: “This summer the food price shock to family finances is set to overtake that from energy bills. What remains consistent is that those on low-to-middle incomes are worst affected.”

Food prices jumped by a fifth in the year to March, marking the biggest leap in 45 years.

The Telegraph

Russia may have put sleeper explosives on Britain’s offshore wind farms to knock out power in a conflict, ex-head of Royal Navy warns

Russia may have already put sleeper explosives on critical infrastructure in Britain’s North Sea, the former head of the Royal Navy has warned.

Admiral Lord West warned offshore windfarms and undersea cables are at risk of attack as fears grow that Putin could wipe out the UK’s power supply and cut off its telecommunications infrastructure.

“There’s a risk as soon as you put critical infrastructure on the seabed,’ the former Royal Navy chief told the Sun, adding that the Kremlin ‘may have already put down sleeper explosives”.

Admiral Lord West’s warning’s come after Russian ships were spotted stalking UK waters earlier this month.

Defence Secretary Ben Wallace on Thursday also warned Russia has the ‘intent and ability’ to sabotage the UK’s underwater energy and communication lines.

Russia “have a specific naval programme designed to both look at and potentially sabotage or attack critical national infrastructure belonging to its adversaries,” Mr Wallace said.

“It has a number of submarines and other pieces of equipment and spy ships and everything else specifically designed for that purpose.”

Experts previously warned Russian attacks on wind farms and undersea cables could lead to riots and civil unrest in Britain.

Dr Dwayne Ryan Menezes, of the Polar Research & Policy Initiative, said an attack on the UK’s critical infrastructure could “cause internet outages and power blackouts.”

“As damage to cables can take days or weeks to fix, it could even lead to potential civil unrest and riots,” Dr Menezes said.

Any damage to the UK’s critical infrastructure could also cost billions to fix, he warned, as he noted electricity and communications blackouts would hit the UK economy.

Russia’s underwater threat is nothing new, and researchers have been warning about potential sabotage attacks since at least 2015.

But back then the main concern was undersea internet cables, through which 95 per cent of the world’s internet traffic and $10 trillion of financial transactions pass every day.

In 2017, Prime Minister Rishi Sunak – then a backbench MP – wrote a report warning of the “existential” threat faced by the UK in the event of a coordinated attack on these cables, most of which are no thicker than a hosepipe.

The pipes are poorly protected, would take only basic skills to find and break, and have no backup system because satellites cannot handle the volume of data they carry.

“Short of nuclear or biological warfare, it is difficult to think of a threat that could be more justifiably described as existential than that posed by the catastrophic failure of undersea cable networks as a result of hostile action,” Mr Sunak wrote.

Daily Mail

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.