Weekend press round-up: EDF to be paid millions for halving Sizewell output

In our latest review of sector coverage across the national newspapers, EDF will be paid between £55-£73 million for halving output at its Sizewell B nuclear plant, in order to prevent blackouts. Elsewhere, South East Water has issued a usage warning to its customers and it is revealed that UK Power Networks paid out its biggest ever dividend to its Hong Kong owners.

National Grid pays Sizewell B owner for halving power output

EDF will be paid between £55 million and £73 million for halving power output from Britain’s biggest nuclear reactor this summer under an agreement to prevent blackouts.

National Grid, the company with the task of keeping Britain’s lights on, said that it had asked the French energy group to continue to limit generation from Sizewell B in Suffolk until late September. That is the maximum period negotiated in a contract that The Times revealed in May had been agreed to help to prevent the network being overwhelmed by excess power during the pandemic.

Electricity demand dropped by as much as a fifth at the height of the lockdown and, although it is returning to normal levels, National Grid said that it was lower than expected and that there was a risk of a second wave that could suppress demand again. Keeping Sizewell operating at half-output enabled it to “prepare for such an event at minimal cost”.

National Grid needed to reduce output from Sizewell so that it could free space on the network to run more flexible types of power plants needed to help to balance supply and demand. It was also concerned that the network could not cope if Sizewell, the biggest single generating unit in Britain, were to fail while operating at full capacity.

Juliet Davenport, of Good Energy, a renewable energy supplier, claimed that the contract was “evidence that inflexible, expensive nuclear power is not fit for the clean energy system we need”.

The Times

South East Water warning after record-breaking use

People in the South East could be without tap water unless usage is cut this weekend, a water firm has warned.

Friday, when temperatures soared to 36C, saw record-breaking demand for water.

South East Water said people’s staycations were causing “a strain on the county”.

It added people must “put away the hose pipes, garden sprinklers and garden water toys” so everyone has what “they need to drink”.

An extra 150 million litres of drinking water is being produced during the current period of warm weather, the utility company said,

However, customers nearer to the water treatment works are using too much, meaning those at the end of the pipe are left with very low pressure or no water at all.

Steve Andrews, head of central operations for South East Water said: “Our water technicians have been working round the clock… but with this record amount of water being used daily it is getting harder to keep up.

“I am now appealing to every one – households and businesses – to keep water for essential use only while the heat is on this weekend and next week.”

The long, sustained period of hot weather experienced since May has resulted in demand for water remaining high.

Mr Andrews urged people to “think carefully before turning on the garden tap” and also to try to capture and use the water twice, such as watering the plants from the paddling pool.

BBC News

Electricity firm UK Power Networks pays £237m divi to Hong Kong tycoon

A British electricity company controlled by Hong Kong billionaire Li Ka-shing and his family has paid out its biggest ever dividend.

UK Power Networks, which operates the cables and lines that connect the National Grid to millions of homes, paid out £237million to three separate companies, all of which are linked to Li.

UK Power Networks takes 16 per cent of electricity bills in areas that it operates, including London, the South East and East of England – at an average cost of £79 a year to 8.3million households.

The dividend payment for the year to the end of March was revealed in accounts filed at Companies House. It was 33 per cent higher than the previous year and takes the total paid in the past decade to £1.7billion.

UK Power Networks was formed in 2010 after the acquisition of EDF Energy Networks, comprising the former publicly owned London, Eastern and South Eastern electricity boards.

The energy networks are hugely profitable and have been criticised for taking big dividends. Western Power Distribution – which operates in the Midlands, South West and Wales – paid out £200million in the year to March.

A UKPN spokeswoman said the most recent dividend was paid halfway through its financial year and so was ‘approved and paid well before Covid-19 started to emerge’.

Mail on Sunday

No 10 broods over French connection

David Cameron and Nicolas Sarkozy stood on the steps of Lancaster House in central London, almost 10 years ago, for a meeting that was supposed to bring Britain and France closer together.

The summit was the start of a defence collaboration that would, they promised, last 50 years and stretch from sharing aircraft carriers to co-operating on building nuclear missiles. “This is a decision which is unprecedented and shows a level of trust and confidence between our two nations which is unequalled in history,” declared Sarkozy.

The decade since then could be a lifetime. Two British prime ministers, two French presidents — and Brexit — stand between then and now. A Lancaster House anniversary is due to be held in November, but there is little to celebrate.

Now, more than ever, Britain is at a crossroads with France and its industrial jewels. Key decisions need to be made in the next few months that will have huge implications not just for industries and jobs, but for defence and energy — making the relationship between Downing Street and the Elysée Palace arguably more important than ever. Those decisions, around companies including Airbus and EDF, could prove influential in Britain’s efforts to secure a trade deal with Europe by the end of the year — either aiding or undermining it.

France takes a muscular approach to supporting its national champions — taking stakes, dictating strategy and having a say on management. Covid-19 has only amplified this, with the government bailing out strategic industries and demanding that it has more control in return. In June, finance minister Bruno Le Maire unveiled a €15bn (£13.5bn) rescue of its aerospace and aviation industries.

Airbus is 26%-owned by the governments of France Germany and Spain, but Britain’s influence is sorely diminished after BAE Systems chief executive Mike Turner’s decision to sell its 20% stake for €2.75bn in 2006.

Britain has taken a more free-market approach, selling off companies and rarely intervening in overseas takeovers. It holds golden shares in Rolls-Royce and BAE because of their roles in building the nuclear deterrent. With aerospace and aviation it has eschewed an industry-wide bailout, providing funds, but largely through debt.

France’s approach is more co-ordinated. President Emmanuel Macron was in London in June for the VE Day celebrations, meeting Boris Johnson. Weeks later, Britain agreed to pay $500m (£380m) for a 45% stake in bust satellite company OneWeb — which has Airbus as a big partner.

“Next to Germany, France is number one in the league of industrial support,” said a senior industrialist. “I wouldn’t be surprised if they are taking a big, wide look at the moment.”

Decisions around whether to help French nuclear power giant EDF are similarly pressing. The company, 83.6%-owned by the French government, is building the £23bn Hinkley Point C power station in Somerset, but that is years late and billions over budget. Now Chinese partner CGN is threatening to refuse any more cash after the recent humiliation of Huawei.

EDF wants to build a fleet of nuclear power stations, but is pressing Westminster for direct state funds, or a way of recouping its costs, before it will start building. Without explicit support in the autumn, EDF’s presence in the UK could shrink substantially, according to multiple sources, including selling its household energy supply business. Its ageing nuclear power stations are nearing the end of their lives, with about four gigawatts of electricity, more than the capacity of Hinkley Point C, due to come off the grid over the next four years.

EDF insisted it was “more committed than ever to helping Britain achieve net zero and to strengthening its UK business”.

The Elysée’s relationship with Downing Street will be similarly influential for Vauxhall’s Ellesmere Port car factory. Its owner, PSA, is 12%-owned by the French state, and has been non-committal about its future.

Stephen Phipson, chief executive of Make UK, the manufacturing trade body, said there was now an opportunity to “rethink the way we manage our industrial base and what the right level of participation is” in terms of state ownership.

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.