Weekend press round-up: Householders to receive money off bills for going green under Labour plans

In our latest review of national media coverage of the utilities sector, Labour is set to outline its plans to give people cost of living discounts for signing up to renewable energy projects. However, the opposition’s wider energy goals have been met with scepticism from experts. There is also analysis of the water scarcity issues hitting the UK as well as scrutiny of the procedure for applying for court warrants to install prepayment meters.

Householders to receive money off bills for going green under Labour plans

People across the UK will receive cost of living discounts – such as reductions on their council tax – if their cities, towns and villages sign up to new “clean energy” projects, under ambitious plans to be announced by Labour tomorrow (19 June).

Keir Starmer and shadow climate change secretary Ed Miliband will spell out how a new public body, GB Energy, will join forces with local government, communities and the private sector with the aim of creating hundreds of thousands of jobs and bringing down household energy bills.

The Local Power Plan will see projects such as solar panels being put on public land or the roofs of housing estates, and empower communities to come forward with their own bespoke projects for renewable energy projects directly owned by local people.

It will also encourage partnerships with the Scottish and Welsh governments and with regional mayors to help them develop their own local clean power plans.

A key condition of GB Energy putting in public money would be that local communities would have to see financial benefits from the part they were playing in the clean power revolution. Starmer and Miliband will announce that GB Energy will make available up to £600m in funding for local authorities and up to £400m in low-interest loans each year for communities, creating up to a million owners of renewable power by 2030.

Profits from the energy that would be sold to the grid from local renewable schemes would be given back to the communities through discounts on council tax or help with energy bills for those who are most in need.

Earlier this month Rachel Reeves, the shadow chancellor, scaled back plans to borrow £28bn a year to invest in green jobs and industry in reaction to the negative economic backdrop and to bolster Labour’s reputation for fiscal credibility.

But the party remains determined to keep plans for a green industrial revolution at the heart of its policy programme, seeing it as a way to boost the economy, create jobs, bring down energy bills and tackle climate change.

Labour’s plans stand in stark contrast with Tory policy, under which planning rules have in effect put a block on more onshore wind energy just as world leaders increase the urgency of their calls to tackle global warming. Ed Miliband said: “GB Energy is about putting power and wealth back in the hands of the British people.

“For the first time in generations, a public institution will be building energy across Britain, and the profits will go directly to working people.

“In their towns, cities and villages, we want the British people to see the benefits of Labour’s clean energy revolution in lower bills and jobs.

“This is just the start of the transformation of our energy system and our economy that a Labour government will bring.”

The Observer

UK clean power targets are unfeasible, experts warn

Energy experts have warned that Labour would struggle to hit its target to decarbonise the electricity system by 2030 given the scale of the challenge ahead, with the Conservative party’s 2035 target also in doubt.

Labour’s ambition is a key part of its wider plan to invest tens of billions of pounds on the shift to net zero through a debt-fuelled “green prosperity plan”, which will be set out in a speech by shadow climate secretary Ed Miliband on Monday.

Sir Dieter Helm, professor of economic policy at the University of Oxford, who has advised the government on energy policy over many years, said neither parties’ goals were likely to succeed on the current trajectory.

“It is reasonable to assume on the current path that the 2035 target will not be met and the 2030 target is simply implausible,” he warned in an article published on his website last week.

Helm said: “It could be [met], but not on the current path and not without quite a lot of consumer and taxpayer pain. It will take much more intervention by government to turn this around.”

Both political parties want to rapidly strip emissions out of the electricity system as part of the push towards net zero carbon emissions across the economy by 2050.

Labour aims to decarbonise the sector by 2030 if it wins the next general election, while the government wants to do so by 2035, with 95 per cent of this achieved by 2030.

But experts fear the required rapid development of new wind farms, nuclear plants and large-scale batteries will be held back by slow grid connections, planning permits, skills shortages, supply chains and other factors.

Senior industry figures cast doubt on the feasibility of the targets for cleaner electricity, warning there needs to be a major policy overhaul if they are to be achieved.

Tom Glover, UK country chair for RWE, the UK’s largest power producer, said the targets “are ambitious and will be a challenge to achieve” and the government needed to take urgent steps to support developers if it were “to have any chance of delivering this”.

Chris O’Shea, chief executive of Centrica, the owner of British Gas, also applauded the ambition in Labour’s targets, but added: “You’re always trying to get the balance right between having a very stretching target and having an impossible target.

“How would I feel if I was a new government at the start of 2025 and I had to deliver that in five years? I’d feel energised, motivated, slightly stressed.”

About 56 per cent of the UK’s electricity came from low carbon sources last year. The rest came mostly from gas-fired power stations, which will need to be replaced or switched to run on hydrogen or combined with technology to strip out their carbon emissions.

Adding to the challenge, electricity demand is set to soar, potentially 50 per cent by 2035, as households and businesses are encouraged to swap gas-fired boilers and petrol cars for electric equivalents.

Generation capacity will need to more than double by 2035 under current targets, according to projections from the Climate Change Committee, which advises the government.

The Financial Times

Water companies feel the heat as commercial bans loom in dry summer

If water industry bosses think they are having a stinking time of it, they should cast their minds back to when Trevor Newton was head of Yorkshire Water. Urging customers to reduce consumption in balmy 1995, he confessed he had “not had a bath or shower in three months”.

As a bout of sweltering weather grips Britain, with forecasts of a baking summer, there are concerns that a widespread drought and a repeat of last year’s heatwave could force water suppliers to ban certain companies from using large quantities. It promises to be a fresh headache for an industry already under fire over sewage dumping, leakage rates, large dividends, a £10bn customer-funded investment plan and “flimsy” pledges to give up bonuses.

In April, the National Drought Group – a collection of business and government leaders – urged water companies and the public to preserve water before future dry spells.

And last week, South East Water announced a hosepipe ban would come into effect across Kent and Sussex from 26 June, after shortages forced schools to shut and residents to rely on emergency bottled water stations.

Water levels in English reservoirs fell to a low of 49% last September, according to the Environment Agency. However, the driest February in England for 30 years was followed by a very wet March, and by last month they had recovered to at least 82%.

However, the burst of recent hot weather has put businesses in the areas seen as most vulnerable, the south-west and East Anglia, on alert. In Cornwall, Colliford Lake, a reservoir on Bodmin Moor, is at about 65% of capacity, down on nearly 77% a year earlier, while Anglian Water has warned that areas of Norfolk remain in the drought conditions that began last summer.

South West Water (SWW) enforced its first hosepipe ban in 26 years in Cornwall and north Devon last autumn. Unusually, the ban remained in place through the winter as reserves remained low, and was extended further into Devon in late April.

For local residents, this has prevented them from watering gardens, refilling ponds and cleaning private boats. However, if dry conditions continue, SWW may be forced to apply to Ofwat, the water regulator for England and Wales, to implement a “non-essential use ban”. These bans mean that for businesses, a host of practices would be outlawed, including operating mechanical car washes, and cleaning boats, aircraft and trains, as well as industrial plants.

SWW admitted in last year’s drought plan that such a move would only deliver a 2.5% reduction in demand on top of the domestic hosepipe ban and even delivering that figure was highly dependent on whether it coincided with “peak tourist and holiday periods”.

If there are still shortages, an emergency drought order can be called, limiting supplies and making alternative water supply arrangements such as a stand pipe in the street. The orders last for three months and can be extended by a further two months.

Any ban could prove politically toxic for SWW, owned by the listed Pennon Group, which is being investigated by the industry regulator over whether it accurately reported leaks and figures showing how much water was used by its customers during 2021 and 2022. Meanwhile, a £112m dividend payout to investors by the Pennon Group was this month labelled a “slap in the face” for communities hit by sewage dumping.

At Anglian Water, a business ban would prevent cleaning of industrial facilities and the windows of office blocks, car washes, filling non-public pools and watering plants on commercial premises. Dust suppression – often used on industrial sites to reduce airborne dust to improve visibility and prevent diseases such as “farmer’s lung” – would also be prohibited.

In East Anglia, farmers have already begun cutting back on high-risk irrigated crops such as potatoes, onions and carrots. The Environment Agency has said it will use satellite data to compare the moisture of crops and soil with irrigation restrictions, to study whether water abstractors – those taking large amounts of water from underground or surface sources such as streams, for example, farmers – are acting within their licence conditions.

Companies are required to pay households £10 a day if their water supply is cut off, up to a maximum of last year’s entire bill. For businesses, it is £50 a day and a maximum of their annual bill.However, suppliers are off the hook if Ofwat deems the circumstances “exceptional”, such as a non-essential use ban, leaving companies facing thousands in lost business and delayed bills.

In an emergency, the suppliers are required to provide 10 litres of water for each person within a day, distributing bottled water or parking up a mobile water tank, known as a bowser, near a home or premises.

The Observer

Forced installation of prepayment meters made easier after warrants deemed ‘boring’ for magistrates

Prepayment meter warrants were seen by court officials as being “extremely boring” for magistrates before a shake-up made it quicker and cheaper for energy giants to force entry into the UK’s poorest homes.

Officials at HM Courts and Tribunal Service (HMCTS) discussed proposals in 2018 to “streamline” the Rights of Entry process used by the firms and their agents to force their way into properties to fit the controversial devices.

A new telephone hearing system was introduced in September 2019, which meant that the firms’ warrant officers no longer had to appear in person before magistrates but could instead give evidence on multiple cases in a matter of minutes in a phone call.

With winter approaching last year, i obtained access to one court in Northern England and watched 496 of the warrants being granted in just three minutes and 51 seconds – leading MPs to warn in the Commons that the forced entries were being approved on an “industrial scale”.

Forcing households on to prepayment meters when they are in debt on their energy bills is controversial because they can leave the poorest families in the cold and dark. Single mothers told i over winter how their children had suffered attacks of asthma and pneumonia in freezing cold homes.

The warrants can be used by energy firms and their agents to force their way in to check for meter tampering, to replace an unauthorised meter or to disconnect the supply as well as force-fitting a prepayment meter.

Internal HMCTS documents obtained by i using the Freedom of Information Act now reveal the internal discussions by officials in 2018 proposing how applications could be “made to a single justice by telephone at a limited number of locations” and for “hearings in private without attendance by respondents unless they apply for a hearing”.

One document sent to the service’s heads of legal operations proposing implementation of the “virtual back-office procedure” said most cases would be centralised to a “small number” of courts and dealt with “by a single justice, supported by a legal advisor in the back office”.

It said of the streamlining proposals: “It is anticipated that this will deliver significant benefits to applicants in terms of time and travel, and additional court time will be generated by taking applications out of court hearings.”

The document said officials were also exploring ways of “reducing the labour as far as possible”, adding that “IT solutions” could be needed to “remove the blockage” of magistrates having to sign large numbers of warrants. They are now approved without being physically signed and are sent out to energy firms’ agents as PDFs.

In the same document, one official added of the warrants: “They are also extremely boring, and I do not foresee sensible magistrates fighting to do them.”

“A streamlined bulk process should be significantly quicker than the current piecemeal process,” they said, adding: “There would be considerable cost and time-saving to applicants in applying from their base rather than travelling to numerous (or indeed any) court sites.”

On the question of transparency, the same official added: “There is no legal reason for these applications to be done in public at all and even now often they are not – the details are never mentioned in public.”

“There would be no detriment to respondents,” they said, as cases where customers contest the warrant would still be held in open court.

However, Mike Freer, the Justice Minister, told the Justice Committee in December that “in practice, it is extremely rare for any contested hearing to take place”.

Read the rest of the article here

iNews

Orsted warns about rising costs of UK wind development

Danish power group Ørsted is set to press ahead with its major UK offshore wind project despite rising costs, but warned that the British government needs to do more to support the sector.

Ørsted’s chief executive Mads Nipper said the company was working “very hard” to make viable its planned Hornsea 3 project off the Yorkshire coast, the world’s largest offshore wind project, after warning in March it could be derailed by financial pressures.

But he added that the electricity prices the UK government offers to developers are not high enough to absorb surging costs and ministers may struggle to secure the rapid capacity growth they need to hit climate targets.

“If a project which is by far the biggest in the world, with all these opportunities, can only become investable after having worked intensively for a year with everything, it’s hopefully also a stark reminder to the British government that something must change,” he said.

Global wind developers are facing major challenges due to rising interest rates and supply chain costs over the past year.

Sven Utermöhlen, chief executive of RWE’s offshore wind business, told the Global Offshore Wind 2023 conference in London this week that the costs of developing offshore wind have risen 20-40 per cent since Russia’s invasion of Ukraine. He added that he did not expect costs to fall anytime soon.

Ørsted, which is listed in Copenhagen and 50.1 per cent owned by the Danish state, had its most profitable year last year. This month it confirmed plans to develop 50GW of renewable energy by 2030, tripling its portfolio. It also increased its return targets.

However, rising costs have caused problems for Ørsted and other developers at projects where costs cannot easily be passed on because they have a fixed-price contract to sell the electricity.

Ørsted’s Hornsea 3 project, which will have a capacity of almost 3GW, or enough to supply almost 3mn homes, last year secured a government contract fixing most of its electricity at £37.35 per megawatt hour in 2012 prices, indexed to inflation.

But with costs having risen so sharply, Ørsted’s UK head Duncan Clark in March said there was a “real and growing risk” projects could be put on hold or abandoned.

Speaking to the Financial Times at Ørsted’s capital markets day earlier this month, Nipper said it was now “likely” Hornsea 3 would go ahead, after the company worked to cut down and boost revenues. It is expecting to make a final investment decision this year.

The Financial Times

Grid asks factories to use less energy next winter under blackout prevention plan

The National Grid will ask factories and businesses to voluntarily cut their electricity usage this winter under an expansion of a service previously pioneered by households.

In a bid to help keep Britain’s lights on, the Grid has confirmed it will urge heavy industry to sign up to the so-called demand flexibility service this coming winter.

Businesses that sign up would be asked to reduce their consumption at times when supplies are expected to be stretched, helping to ease pressure on the system.

While they may use the same amount of energy overall, shifting their usage outside of peak times can help the Grid to manage and prevent blackouts in worst-case scenarios.

Households are also being asked to take part in the demand flexibility service again, which was first introduced last year.

Jake Rigg, director of corporate affairs at National Grid Electricity System Operator (ESO), told the Telegraph: “We are particularly keen to engage industrial and commercial users of energy.

“The demand flexibility service was principally – not exclusively, but principally – used by households last winter.

“And whilst we still very much want that to continue, we’re really pushing to get industrial and commercial users.

“We’ll be working really closely with different industries to try and help them with that and make it as attractive as possible, particularly for businesses that obviously are struggling with energy costs as well – it could be quite helpful from that point of view.”

The Daily Telegraph

How technology could help solve the drought crisis

Farmers in California’s Imperial Valley are being offered millions of dollars to do nothing. The lavish government inducements to leave fields fallow are part of a desperate effort to cut water use from the Colorado River. The once mighty waterway is the primary freshwater source for more than 40 million people in seven western states, but its flow has fallen to alarmingly low levels after more than two decades of drought, sparking rationing and crunch negotiations between states over how to divide a dwindling resource.

In Germany, campaigners led a boycott this month against “drought berries” from Spain, where in Andalusia a vast wetland is being used to irrigate crops for export. April was the Mediterranean’s driest and hottest since 1961, leading to “remarkably negative” soil moisture and potential dire consequences for agriculture, according to a recent study.

Water, in short, has zoomed up the global agenda and onto the radar of big business, start-ups and investors as not only an urgent societal issue but an untapped opportunity.

Cody Friesen, founder of Source, a start-up in Scottsdale, Arizona, said he had seen a tenfold increase in demand since 2021 for his company’s solar panels, which draw potable water out of the air.

He said: “It’s directly reflective of this awakening to how bad the world is with respect to potable water, compounded by climate change, drought, overpopulation, pollution and overdraws of aquifers that we’ve known for years were unsustainable, that are all now coming home to roost.”

Lack of access to reliable, clean water is nothing new to billions of people in the developing world, or even in rural areas of rich nations. An estimated 30 million people in America rely on well water that does not meet minimum safety standards. Increasingly extreme weather, however, has begun to affect western powers and big cities, which has catalysed a wave of interest and investment.

Indeed, the United Nations, which expects demand to outstrip supply by 40 per cent in 2030, held a water conference this March in New York, the first such meeting in nearly half a century. Its goal was to catalyse a “Paris moment”, “with outcomes as critical for water as the Paris agreement has been for climate action”.

Drinking water is vital, but the “elephant in the room is agriculture,” said Charles Iceland of the World Resources Institute. Globally, irrigated agriculture sucks about 70 per cent of the world’s fresh water, heavy industry takes 20 per cent with the remaining 10 per cent going to cities and towns. “Agriculture is where you need to start trying to figure out a solution,” Iceland added.

That is what Devon Wright has sought to do at Lumo. The Canadian tech entrepreneur sold his marketing business to Yelp, the online reviews giant in 2017. The deal brought him to California, which was in the midst of a years-long drought that he saw affecting neighbours and farmers in Occidental, a wine-growing region in northern California where he lives. The region was being hit with regular rationing orders.

His solution: a “smart” irrigation solution that monitors water flow and can be controlled remotely via an app. “Technology has impacted so many other industries but in water, in agriculture, you just don’t see it,” he said. Indeed, despite the industry’s heavy water use control mechanisms remain rudimentary. Growers will often have a single flow meter at the source, meaning that leaks can only be found in the field via manual inspection. Lumo’s internet-connected valve monitors flow in real time to not only detect leaks but also to allow farmers to precisely program the volume they want to use and avoid over-watering.

The reception he has received from farmers has been heartening, he said. “For the vast majority of farmers I speak to, it’s a foregone conclusion that there has to be change.

“They are business people who are very sophisticated. And when they know that one of the most critical inputs to their crop and to their success is being rationed because it’s running out, they’re like, ‘We’ve got to find a way.’”

Read the full article here (subscription required)

The Sunday Times

No swimming, no surfing: how a summer of sewage is ruining the British seaside day out

Red flags are going up on beaches from Scarborough to Whitstable as pollution levels soar and businesses are forced to close due to sewage discharges

Read the article here

The Observer

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.