Weekend press round-up: Court delays Bulb sale to Octopus as rivals object

In our latest review of sector coverage in the national media, the sale of Bulb to Octopus Energy has been delayed after rivals alleged that the "secretive" deal could be unlawful. There is also renewed speculation about an extension of the windfall tax on oil and gas companies in this week’s autumn statement and an analysis of the generational impacts of rising energy bills.

Court delays Bulb sale to Octopus as rivals object

The sale of the failed energy supplier Bulb to Octopus Energy has been delayed after rivals alleged that the secretive deal could be unlawful.

A High Court judge declined to approve a date for the deal to proceed yesterday after concerns were raised by British Gas, Eon and Scottish Power.

Bulb, Britain’s seventh-biggest supplier, collapsed a year ago as energy prices soared. It has since been run by Teneo in government-funded special administration.

Octopus, Britain’s fourth-biggest supplier, was the only bidder for Bulb, which has 1.5 million customers and 650 employees. It struck a deal with ministers late last month, the terms of which were not disclosed but are believed to include the government taking out up to £1 billion of future energy contracts on its behalf.

Grant Shapps, the business secretary, this week approved the “energy transfer scheme” to move Bulb’s assets to Octopus and administrators had asked for court approval for the process to begin on November 15.

Jonathan Adkin KC, for British Gas, told the hearing: “There has been a serious lack of transparency in relation to this matter . . . and there is a genuinely held concern about what has been decided and that it might be unlawful.”

Richard Fisher KC, representing the administrators at Teneo, argued that there was “significant commercial urgency to justify going ahead today”.

The Sunday Times

Taxpayer subsidy to energy giants ‘could exceed 100p in the pound’ if Hunt increases windfall tax

An expected hike in the windfall tax on oil and gas could result in the Treasury paying more in tax relief to companies investing in the North Sea than the value of the investment itself.

Chancellor Jeremy Hunt is considering increasing the emergency levy from 25 to as much as 35 per cent of profits from oil and gas extraction in his Autumn Statement on Thursday, to raise £45bn over the next five years.

The mooted announcement – also expected to extend the Energy Profits Levy to 2028 from its current end-date of 2026 and to bring in electricity generators for the first time – has sparked warnings that companies could scrap investment plans worth billions.

But researchers from anti-fossil fuel campaign Uplift calculate that, unless rules are changed, a quirk in the way the levy is designed could actually mean taxpayers stumping up more in relief on investment projects than the investment is worth.

Energy giants currently getting 91p in relief for every £1 they invest could instead receive 109p under the new regime, effectively meaning the taxpayer is paying for the investment and handing over a further 9 per cent of its value in additional relief.

The relief has helped firms offset the impact of the levy on eye-watering profits, which reached £7.1bn for BP and £8.2bn for Shell over a single three-month period as the Ukraine war sent prices soaring. Shell is understood to have paid no tax on its UK profits thanks to this and other subsidies.

In the case of the huge new Rosebank oil field off the coast of Shetland, Uplift’s calculations suggest that Equinor and its partners will effectively pick up over half a billion pounds in UK government subsidy to develop the field.

Uplift director Tessa Khan said: “When UK households are facing soaring energy bills, and many millions will be forced into fuel poverty this winter, it is unconscionable that this government is effectively handing billions in taxpayer subsidies to oil and gas companies raking in record profits.

“New oil and gas projects won’t do anything to lower our energy bills: most of what’s being subsidised in the North Sea is oil for export and will just result in more profits for oil executives.

“This glaring loophole needs to be closed. This isn’t a difficult decision, chancellor. Stand up for British taxpayers and close up this loophole. If that means standing up to profiteering oil and gas companies, so be it.”

The Independent 

Hinkley Point C construction worker killed in ‘traffic incident’

A construction worker has died while working at the Hinkley Point C nuclear power station site in Somerset.

EDF Energy confirmed the death of a man after emergency services were called to the site at about 08:30 GMT on Sunday.

Delivery director Nigel Cann said: “One of our team was involved in a fatal construction traffic incident.”

Avon and Somerset Police said the man’s next of kin have been informed and inquiries into the incident are ongoing.

Mr Cann said the circumstances surrounding the fatality will be investigated and that work at the site had been stood down.

He added: “We are very sad to confirm that one of our team was involved in a fatal construction traffic incident this morning during planned work activities.

“The incident is being investigated by the police and the Health and Safety Executive, and we will co-operate fully with the authorities.

“Work at the site has been stood down and we are offering support to colleagues affected by this tragic event. Our thoughts are with his family, friends and colleagues at this very difficult time.”

Avon and Somerset Police said emergency services attended Hinkley Point C around 08:30 GMT, following a report a man had been injured by machinery.

A police spokesperson said: “Sadly, despite the efforts of the ambulance service, the man died a short time later.

“His next of kin have been informed and are our thoughts are with them at this difficult time.

“We’re liaising with the Health and Safety Executive and our enquiries into the incident are ongoing.”

BBC News

Energy bills: older Britons will pay more but youngest will struggle most, report finds

Older people face a bigger income hit from surging energy costs this winter but younger households are more at risk of being unable to pay their bill or getting into debt amid the cost of living crisis, according to a report.

As households across Britain turn their heating on, the research by the Resolution Foundation thinktank found that older generations, in particular the over-75s, will spend a bigger share of their income, up from 5% to 8%, on their energy bills. For those under 50 the proportion is 5%.

But while older households face a bigger increase, it is younger generations, who have endured years of stalled pay growth and high rents, who will struggle most to cope, according to the report.

Even with the government support – which includes the energy price freeze, £400 rebate on bills, and lump-sum payments for vulnerable households – the typical household energy bill will be 83% higher this winter than before the cost of living crisis struck.

“All generations are facing difficulties from the growing cost of living crisis – but different generations are experiencing it in very different ways,” said Molly Broome, an economist at the Resolution Foundation.

“The middle-aged will face the largest bill rises and older generations will see the greatest squeeze on their incomes due to their larger and less energy-efficient homes.

“But it’s younger people who are most likely to struggle to pay rising bills, because they are less likely to have savings to fall back on – and will therefore be forced to either rely on older friends or family members, or might go without heating during the coming cold weather.”

Younger households are up to four times more likely to have prepayment meters, preventing them from being able to spread their energy costs evenly over the year. Close to a fifth of households headed by someone under 30 pay for gas and electricity this way, compared with about 5% of households headed by someone aged 65 and older.

The Guardian

SMEs fear ‘cliff-edge’ energy bills in April, warns British Chamber of Commerce

Nearly half of small and medium enterprises (SMEs) fear they will not be able to pay their energy bills once the Government’s support package ends next March, according to a new survey from the British Chambers of Commerce.

A further four per cent believe they will not be able to pay their energy bills at all, while 37 per cent predict they will find it difficult to pay even when they are in receipt of Government support.

Over four in ten (41 per cent) SMEs disagreed that tariffs available the last time they renewed their contract were affordable.

A further 29 per cent revealed a range of tariff options was not available, while almost a quarter (24 per cent) did not feel it was easy to change providers.

Notably, SMEs that renewed their energy tariffs after April this year have reported more difficulties than businesses which have not yet renewed.

These firms were more likely to struggle to pay their energy bills going forward, with 60 per cent saying they will face difficulties paying after March 2023, while seven per cent believed they won’t be able to pay at all.

Over half (51 per cent) will find it difficult to pay their bills between now and the end of March, during the Government’s Energy Bill Relief Scheme.

SMEs which renewed their tariffs also faced greater difficulties during the renewal process – as 69 per cent disagreed that the tariffs available to them were affordable.

Meanwhile, almost half (47 per cent) disagreed that there was a range of tariff options available.

Shevaun Haviland, director General of the BCC, warned a “cliff-edge” is looming for businesses, and that the Government should consider proposals such as reforming business rates and boosting competition in the business retail market.

City AM

Labour would create ‘anti-Opec’ alliance for renewable energy, says Miliband

The UK under a Labour government would form an “anti-Opec” alliance of countries dedicated to renewable energy, to bring down energy prices and promote clean technology, the shadow climate change secretary, Ed Miliband, has said.

A clean power alliance would enable countries to cooperate to source components more cheaply, boost the expansion of wind, solar and other forms of low-carbon power, and potentially to share or export electricity across connected grids.

Denmark, the Netherlands, Austria, Portugal, Costa Rica and Kenya are potential partners, and Miliband will be drumming up further support at the Cop27 UN climate summit, which he is visiting for several days. Labour is committed to 100% low-carbon electricity by 2030.

“This potential clean power alliance is like an anti-Opec,” said Miliband, referring to the group of oil-producing countries. “I say anti-Opec because Opec is a cartel, a group of countries that works together to keep prices high. This would be a way in which countries join together to be the vanguard and say, ‘We’re going to deliver on clean power and it will help to cut prices, not just for us but for others’.”

He said the plunge in the price of renewable energy over the last decade was “the biggest source of optimism we should all have” about the climate crisis. “It is now cheaper to save the planet than to destroy it,” Miliband said in an interview with the Guardian at Cop27. “That is a message we should be shouting from the rooftops, because the implications of that message are profound.”

The Guardian

UK group plans first large-scale liquid air energy storage plant

UK energy group Highview Power plans to raise £400mn to build the world’s first commercial-scale liquid air energy storage plant in a potential boost for renewable power generation in the UK.

Rupert Pearce, chief executive of the 17-year-old company, is aiming to wrap up Highview’s largest ever capital raising early next year to build a large-scale project near Manchester by the end of 2024.

“We are raising a significant amount of money for the next two or three years,” the former boss of satellite giant Inmarsat said in an interview. “We’re looking for £400mn to take us through the next phase.”

Highview Power plans to spend £250mn to construct a storage plant in Carrington that has a 30 megawatts capacity and can store 300 megawatt hours of electricity, enough to supply 600,000 homes with power for an hour. It already has a 5MW pilot plant operating in Pilsworth. The remaining £150mn would go towards engineering for a further four sites.

Energy storage is vital for stabilising the grid as the share of the power mix from intermittent renewables grows. The UK generated almost 39 per cent of its electricity from renewable sources in the second quarter, up from 11 per cent a decade ago.

The energy market has been volatile since Russia invaded Ukraine and cut off gas supplies to Europe. This has prompted a surge of interest in storage technologies that soak up excess electricity that comes from renewables and supply it back to the grid when needed.

“If the wind blows and the demand isn’t there, then it can’t go anywhere. We have a structural necessity to bring in flexible demand for a long period of time,” said Pearce.

Lithium-ion batteries can help solve that problem over the course of two to four hours but storage plants, which can hold power for longer and provide a stable supply of energy similar to coal and gas plants, are needed to help the UK achieve its net zero goals. Pumped hydro storage is a mature solution for longer duration energy storage but is hostage to geography.

“We need big electricity warehouses — imagine storing a day’s worth of solar-generated electricity — and we also need big doors on the warehouse, so we can meet those peak demands,” said Anthony Price, managing director of Swanbarton, an energy storage consultancy, and secretary of Flow Batteries Europe, a trade body. “Liquid air energy storage fits into that category.”

The Financial Times

Raw deal: discontent is rising as water companies pump sewage into UK waters

More untreated sewage is being pumped into our seas and rivers than ever before. And anger at fat cat bosses and toothless regulators is running deep. Frankie Adkins meets the people determined to make waves.

Read the full article here

The Observer