Weekend press round-up: Eon identifies security breach

In our latest review of sector coverage across the national newspapers, Eon has had to lock some online accounts after a security breach. Meanwhile, Hitachi has rejected pleas from unions to keep its Welsh nuclear power project alive; there are calls for Britain to build gigafactories to accelerate the electric vehicle transition and Schneider Electric has topped a global league of green firms

Eon customers left without gas and electricity after personal data stolen in security breach

E.On customers using pre-payment meters have been left without gas and electricity after the energy supplier took down its app because login details were stolen.

Tens of thousands of households use E.On’s app to top up their pre-pay meters. The company has received hundreds of complaints online from people unable to log in since it was taken down on 12 January, leaving some struggling to power their homes in the middle of winter with temperatures forecast to plunge as low as -10C in parts of the country.

The German utility company deactivated the app after discovering that hackers were trying to access customers’ accounts using personal data stolen from a third party.

It is not clear how or when the data was stolen. E.On did not say how many customers may be affected or when its app might be back up and running. Affected customers have been contacted and told to change their passwords, the company said.

The security breach has left some vulnerable customers without power during lockdown. Energy regulator Ofgem says that customers on PPMs are more likely to be in vulnerable situations such as having existing physical and mental health issues, or living in fuel poverty.

An E.On spokesperson said: “We have identified a potential threat which comes from outside E.On where we believe someone has been trying to access online accounts using password data stolen from another company.

“We take the security of customer data very seriously and we have locked those online accounts which may be at risk and written to any customers who might be affected, asking them to reset their online password.

“We are sorry that our Pay As You Go customers are unable to top up via our app at the moment. As always, customers can still top up their energy via our automated freephone line – 0800 015 6368 – or through our website. We are working to have our app back up and running as soon as possible.”

The Independent

Hitachi to shut Anglesey nuclear power site

Japanese industrial titan Hitachi has rejected pleas from unions to keep its Welsh nuclear power project alive, blaming the government for not providing enough financial support.

Bosses of Unite, the TUC, GMB and Prospect wrote to Hitachi this month urging it to reconsider plans to shut down Horizon, which planned to build a £20bn nuclear power station at Wylfa on Anglesey. It is due to close at the end of March.

Hitachi scrapped plans to build nuclear power plants in the UK in September, after writing off £2bn in 2018. Insiders warned that could scupper a sale of the project, despite interest from bidders including a US consortium of Bechtel, Southern Company and Westinghouse.

“It would be a tragedy to mothball Horizon at this juncture,” wrote the unions. “We therefore respectfully ask that you leave the Horizon team in place and in a position to actively advance [the] proposal at least until September this year.”

They warned that if the Horizon team were disbanded, the entire project, which hoped to create 8,500 jobs, would be at risk.

Last week Hitachi executive Toshikazu Nishino rejected those pleas, saying that most Horizon workers will be laid off by the end of March, leaving only staff to maintain the site. Nishino added that while Hitachi shared “the global concern about climate change”, it had not received adequate backing from the government to proceed and “no viable options have been found”.

The Sunday Times

Britain must build battery gigafactories to save electric car dreams

Jaguar Land Rover’s award- winning I-Pace electric car hit a roadblock last year that typified the challenges facing the automotive industry: the supply of batteries ran out. The component crisis, which forced JLR to halt manufacturing of its Tesla rival for a week, was not caused by problems at its British factories or suppliers. Production stopped at the I-Pace plant in Austria after South Korea’s LG Chem failed to fulfil its contract to supply batteries from its gigafactory in Poland.

The stoppage underlined the global scale of the electric battery race — a race in which Britain is a distinct laggard.

The I-Pace, the only model in JLR’s stable powered solely by electrons, is still a niche car. That will soon change, with car-makers starting to flood the market with electric vehicles. As the industry dumps the combustion engine, the market for batteries, by far the most valuable part of an electric car, is heating up.

Yet while countries around the world have been building the gigafactories where they are made, Britain has appeared stuck in the slow lane. Governments on the Continent, car-makers and investors have been pouring cash into gigafactories in recent years, in an effort to play catch-up with the battery giants of China, South Korea and Japan.

Construction of a battery plant in Sweden is being funded by investors including Goldman Sachs, Baillie Gifford and the European Investment Bank (EIB), as well as Volkswagen. The gigafactory, built by Northvolt, will supply VW and fellow German giant BMW.

LG Chem’s factory in Wroclaw opened in 2018 and its expansion was fuelled by a €95m (£84.6m) grant from the Polish government, plus €480m of loans from the EIB. The European Commission has approved €3.2bn of state aid for battery-makers to develop large-scale manufacturing in the bloc.

Brexit has given the construction of gigafactories added importance for the UK. Under the trade deal with the EU, the country has six years to establish domestic production of batteries and parts if it wants to export electric cars tariff-free to the Continent. If batteries are not sourced from the EU and the UK by the end of 2026, punitive tariffs could cripple the UK automotive industry.

A deal struck between the EU and Japan will eventually allow the likes of Nissan, Toyota and Honda to export cars tariff-free to the Continent, bypassing the UK and the production plants they set up here in the 1980s and 1990s to supply the market across the Channel.

The government has banned the sale of new combustion-engine vehicles from 2030. Many consumers are likely to make the switch before then. Electric cars accounted for 6.6% of sales last year, and in December the monthly share hit 16.5%, compared with 3.3% the same month a year earlier, according to the Society of Motor Manufacturers and Traders.

The UK was once a battery pioneer. Scientists at Oxford University made a breakthrough on the lithium-ion battery in 1980. It was not so long ago that Britain was Europe’s biggest producer of electric cars, thanks to the battery factory opened by Nissan next to its car plant in Sunderland in 2013. Last week, Nissan announced that the bigger batteries needed for its Leaf EV would be made at the Sunderland facility, which was taken over by China’s Envision in 2018. The deal offers hope that Sunderland will make more electric models in the future.

That, however, is just a start for an industry that still relies heavily on hydrocarbons. Nissan built about 44,000 Leafs last year. Most of the UK’s new cars, which prior to the pandemic were churned out at a rate of about 1.3 million a year, are powered by petrol and diesel engines.

Steve Bush, national officer for automotive at the union Unite, said: “Brexit allows us to move forward and gives us clarity, but we’ve got six years. We need to run like the clappers now. The government has got to invest massively on this. The real challenge for all of us is to have partnerships to get gigafactories built.”

Former Aston Martin boss Andy Palmer, who helped launch the Leaf while working at Nissan, said car giants had to decide soon on the platforms, or skeletons, for their future models — and that means huge spending decisions.

“The next platform in all the factories around Europe won’t be an evolution of the current platform. It will be a skateboard [for electric cars]. It’s at that moment you consider your factory of choice,” said Palmer, who is on the boards of battery start-up InoBat and electric bus-maker Switch Mobility.

“All car companies are going to make the decision in the next few years on their electric platforms and where they make them. You need to look for the most efficient, cost-effective place to make stuff. The battery is difficult to move and represents about 40% of the vehicle cost.”

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The Sunday Times

The problem with Britain’s electrical ups and downs

There’s not much that connects West Burton, a sleepy rural hamlet in Britain’s east Midlands, with the US state of California.

But this month the owners of a power station near the Nottinghamshire village became the beneficiaries of an energy imbalance of a kind that enriched power companies, caused blackouts and infuriated countless consumers across the Golden State last summer.

A power squeeze in the east of England briefly allowed West Burton B, a gas-fired station owned by EDF of France, to sell its output for the vertiginous price of £4,000 per megawatt hour (MWh). Normal UK wholesale prices are closer to £40 to £50/MWh.

Nottinghamshire was not alone in experiencing this unwelcome blend of low output and high prices. Over the past three weeks, wholesale purchasers of electricity across Britain have frequently paid £1,000/MWh at peak times, according to Nord Pool, a day-ahead electricity market that matches up buyers and sellers.

True, the UK has not experienced blackouts like the Californians did last year. The lights stayed on, and consumers were not inconvenienced. But more connects the two places than just their experience of rising prices.

The US state now generates roughly a third of its electricity from renewables. For Britain, the figure is about 40 per cent. What those figures conceal is the variability of output. In Britain’s case, data from National Grid ESO and Elexon show that on some days wind and solar alone produce as much as 65 per cent of its electricity. But there is a flipside, which is what happens on days when there is less wind and sun to speak of.

According to the same data, wind and solar produced 20 per cent or less of Britain’s power on 87 days in 2020, including one stretch of eight consecutive days in August and another seven-day period in November. All it then takes is a power station, interconnector or wind farm to drop off the system, and all hell breaks loose in the market.

Critically, although renewable operators are responsible for these ups and downs (which can also involve them overproducing and having to be paid to switch off), they do not bear the economic consequences. These are lumped on the system as a whole.

Managing variability is a real issue in the medium term. That is because this may get worse before it gets better. Consider one of the features of renewables: unlike fossil fuels, solar and wind have no marginal fuel costs to recover. That, together with the subsidy they receive, permits them to sell electricity profitably at levels which are ruinous for fossil fuel stations.

In days of plentiful sun and wind, prices can even go negative. One day last May, for instance, they fell to negative £9.92/MWh.

What this means is that the grid is likely to become ever more dominated by intermittent capacity. There is little merit in building new fossil fuel capacity when margins are so slender. (Average operating margins at the UK’s three large thermal generating utilities were just 6 per cent in 2019.)

The one thing stopping much of the UK’s existing gas capacity closing is the existence of another bung — the so-called capacity market — that pays stations to keep their doors open so they can sell power at eye-watering prices on days when renewables cannot produce. Meanwhile, in another blow to baseload, Britain’s ageing nuclear fleet will start shutting next year without like-for-like replacement.

In the long run, advancing technology should allow grids to operate with elevated levels of renewables. But in the meantime, there is a need to ensure the UK has the baseload power it needs to keep the lights on without wasteful volatility. In his 2017 cost of energy review, the economist Dieter Helm suggested an elegant solution: make all operators meet the system costs for which they are responsible.

Instead of giving renewable owners a free option to sell whatever they could produce, they would bid to deliver specific quantities of power at certain times of day, with penalties if they over or under delivered. That would put them on the same economic footing as other operators.

The Financial Times

French tech firm Schneider Electric tops global league of green firms

A Paris-based tech company has seen off competition from the world’s best-known green businesses to be named the most sustainable corporation on the planet.

Schneider Electric has climbed the annual Global 100 index, from a ranking of 29 last year, offering the technology and energy solutions needed by the likes of retailer Walmart, hotel group Marriott and steel business ArcelorMittal to meet their climate targets.

The annual green company league table, compiled by researcher Corporate Knight, ranked over 8,000 publicly listed companies which generate annual revenues of over $1bn to find the most sustainable businesses.

In the latest rankings Schneider ousted Danish windpower giant Ørsted from last year’s top spot, and left most UK firms in its wake, following a surge in the number of companies during the pandemic seeking automated technology to help shrink their carbon footprints.

The rising green ambition among the world’s biggest companies has also helped Schneider, which operates in 100 countries around the world, to more than double its market value in the last two years to more than €70bn (£62bn).

Schneider is one of nine companies in the Global 100 index headquartered in France, the European leader in the company rankings ahead of Germany which is home to seven of the top 100 countries. The US can lay claim to 20 companies in the index, the highest of any country, followed by Canada which has 12 on the list.

The UK, which claims to be a global leader in climate action, has only five companies in the league table and none in the top 10. Britain’s highest-ranking company was Atlantica Sustainable Infrastructure, a renewable energy services company, which is the 12th most sustainable company in the world.

Schneider Electric’s long-serving chief executive, Jean-Pascal Tricoire, said the company acts as “doctor and pharmacist” to global companies by diagnosing their sustainability problems and providing the technology to meet their goals.

“For example, Walmart came to us because they want to be greener. But 90% of the [environmental] footprint of Walmart is with its suppliers. So they contracted us to work with their thousands of suppliers to help save 1 gigatonne of carbon over the next 10 years,” he said.

The Guardian

Energy companies accused of ‘greenwashing’ for buying 20p certificates

Shaun Jordan, by his own admission, is not an environmental campaigner. But when the time came to switch his energy supplier in August last year, the price comparison site he was using said he could get a 100 per cent renewable power tariff for only a few pounds more than the cheapest tariff on offer.

“The one that wasn’t the absolute cheapest, but was pretty close to the top, also mentioned renewable energy,” Jordan tells i. “I didn’t mind paying a little bit more to think that I was picking one that was perhaps more beneficial for the environment”.

It’s a choice that millions of people are making. Renewable tariffs, often as cheap as a standard electricity tariff, have flooded the energy market in recent years. Experts believe more than half of British households are now signed up to one.

Like Jordan, most of people would think their choice means they are doing something good for the environment. But there is growing concern suppliers are making the use of loopholes in energy regulations to sell green tariffs without needing to buy any renewable power.

No matter what tariff a bill payer chooses, every house in the country pulls power from the national grid. About 37 per cent of that comes from renewables, with gas, coal and nuclear making up the rest. Energy companies can ‘green’ their supply matching the amount of power their customers use with power they buy from wind and solar sites they either own or have struck deals with.

That is the approach Good Energy takes. It has been leading the charge against what it terms “greenwash tariffs”.  “For every unit of power that our customers use, we match that with a unit that we have either generated from our own assets or bought from a renewable generator,” explains Kit Dixon, Good Energy’s policy and regulation manager. “That means that for every customer we sign up we have to go out and buy more power.” Ecotricity and Green Energy UK deploy a similar approach.

But not all suppliers follow the same process. Many rely heavily on Renewable Energy Guarantee of Origin (Rego) certificates to green their tariffs. Regos are issued by the energy regulator Ofgem to renewable generators like solar or wind farms whenever renewable power is put onto the grid.

The problem is, Regos are very cheap, costing as little as 20p per MWh. They vary in quality. And they can be sold to suppliers without them also buying the green energy they represent. Offering a standard household a ‘green’ tariff only costs suppliers about a £1 in Rego certificates.

Good Energy argues Regos therefore provide little incentive for renewable power generators to build more wind turbines and solar panels. “We did the maths on one of our own sites, and the revenue that we would generate from selling Regos alone would barely be enough to cut the hedges,” says Dixon.

Jordan’s tariff is provided by Shell Energy. It is marketed as 100 per cent green electricity backed by Regos, but there is no information on its website about how its Regos are sourced or where its electricity is purchased. “It’s just completely disingenuous,” Jordan says. “If you believe the pictures of the windmill and the kids walking in the grass and all the other imagery you would think that you were helping the planet.”

Shell Energy told i its parent company does have direct agreements with renewables suppliers in addition to purchasing Rego certificates. It would not say what proportion of its power is sourced through these agreements. “We know that many customers want to do their bit to support more renewable generation in the UK,” a spokesperson said. “Shell Energy customers can feel confident that they are.”

Last month ministers announced they will consider changing the rules so consumers receive “transparent information” on energy tariffs. The energy regulator, Ofgem, has also expressed concern about green tariffs. “We are aware of growing concerns about ‘greenwashing’, where the environmental impact of a particular tariff or supplier is overstated,” it said last year. “We expect suppliers to be transparent about what constitutes a ‘green tariff’ and we will undertake work to ensure that consumers are not misled.”

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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.