Weekend press round-up: Minister says price cap is ‘here to stay’

In the latest round-up of the weekend's papers, energy minister Greg Hands says the price cap is "here to stay", water companies are found to be releasing sewage into reivers more than 1,000 times a day, and Northern Powergrid apologises for a trillion-pound storm compensation error.

‘North Sea gas is crucial for our energy security,’ minister says

Britain must keep drilling for gas in the North Sea for “reasons of energy security”, the energy minister has said, as the Ukraine crisis fuels fears over Russian supplies to Europe.

Greg Hands said that domestic production gave Britain an advantage compared with European neighbours that relied on Russia for a “huge part” of their gas. It was “important for us not to be increasing our gas imports” at “a time of energy security concerns”, he said.

In an interview with The Times, Hands also vowed that the energy price cap was “here to stay”, despite calls from some suppliers to scrap the policy.

The energy minister also:

• Backed the introduction of “time-of-use” electricity tariffs
• Suggested that a £200 loan scheme to ease energy bills could be revised if prices stay high
• Declared that “net zero is part of the solution, not part of the problem”
• Rejected calls to revive fracking

A surge in global gas prices will increase energy bills for most households in Britain by 54 per cent from April, reigniting debate over production in the North Sea. Britain produces about half its gas needs, but the industry has forecast that this could drop by 75 per cent by 2030 without investment in new projects. However, the International Energy Agency said last year that no new fields should be developed if the world was to hit climate targets.

Hands said that the government wanted to maintain “robust domestic production” from the North Sea for energy security reasons. “I don’t want to see us increasing gas imports,” he said.

Europe relies on Russia for about a third of its gas needs and there are fears that a Russian invasion of Ukraine could lead to disruption or to Russia restricting supplies. “We all know, in terms of the situation between Russia and Ukraine, the UK benefits from the fact that we import very little gas from Russia, less than 3 per cent,” Hands said. “I wouldn’t want us to be increasing our imports at a time of high prices or in any way that threatens our energy security.”

Analysts have said that Britain’s pipeline links to Europe mean that it could suffer knock-on effects on prices and supplies if Russia were to invade Ukraine. Hands was “not aware of any government modelling in that space”.

The energy minister also argued in favour of North Sea production on the ground that typically it had lower emissions than imports of liquefied natural gas and that gas had “a big role to play in our energy transition”.

However, he dismissed suggestions that increased North Sea production could bring down prices, saying that it would have only a “minimal impact”. “North Sea gas production is a very small part of global gas production. It’s the global price that sets the UK price,” he said.

Hands denied reports that the government was fast-tracking consents for new projects, saying that there was “no change to our regulatory environments”.

The government was also not considering reviving fracking, which was banned in 2019. “Unless compelling scientific evidence is provided to address these concerns and ensure that communities are on board, I don’t see a change in that moratorium.”

Hands defended the government’s push for net zero to move away from “volatile-priced fossil fuels”, despite criticism from backbenchers in the Net Zero Scrutiny Group. He said there were more MPs in the rival Net Zero Support Group and that “net zero is part of the solution, not part of the problem. The answer has got to be a move to low carbon, zero carbon domestically produced renewables.”

The surge in gas prices has led to the failure of almost 30 energy suppliers since the start of last year, with some blaming the government’s price cap. Hands said, however, that “the price cap is here to stay, we’re committed to have it going forward”, although there would be reforms to the supply market in due course.

The Times

Water companies are ‘releasing raw sewage into rivers more than 1,000 times a day’

Water companies are releasing raw sewage into rivers more than 1,000 times a day despite being told to do so only when there is heavy rainfall, Telegraph analysis reveals.

More than a third of sewage discharge occurred when there was no heavy rain in the areas, according to the research, which suggests firms are breaching terms of their permits.

The revelation comes as the Telegraph launches its Clean Rivers campaign, calling for action to stop water companies, industrial agriculture and urban waste from polluting England’s beauty spots.

Raw sewage was discharged into rivers and coastal areas for more than 3.1 million hours on more than 400,000 occasions throughout 2020, according to data from the Environment Agency.

These spills are intended to occur only during times of exceptional rainfall to help the sewage network cope.

But analysis of 10,000 storm overflow monitors found a major discrepancy in the total hours of sewage spilled into rivers, and the total amount of rainfall throughout the year.

In 2020, the Telegraph found at least 1,222 storm overflows which spilled sewage for longer than the amount of hours of heavy rain in the area.

In total, at least 1.1 million hours of raw sewage were estimated to have discharged from these overflows when there was no heavy rain, suggesting water companies are using sewage outflows to an extent unjustified by bad weather.

The data includes a site on the River Derwent in Duffield, where sewage was pumped into the river for 8,000 hours in 2020, according to the data, but which had just 456 hours of heavy rainfall in the immediate area.

The Environment Agency (EA) launched a major investigation in 2021 into more than 2,000 treatment works after water companies admitted they could be releasing sewage into rivers at levels in breach of their permits.

Separately, the EA has identified 1,300 “frequently spilling” overflows that it is investigating for potentially breaching their permits.

Spills from an overflow outside of rainfall – so-called “dry” spills often caused by blockages in the network – are more likely to damage the environment as the sewage is not diluted by rainwater.

The analysis suggests that overflows managed by Thames Water saw the highest amount of dry spilling on average, with each discharging sewage outside of rainfall for 255 hours or 10 days in 2020.

More than a quarter of Thames Water’s 400 overflows saw at least some dry spilling in 2020.

Storm overflows managed by Severn Trent Water and United Utilities each saw on average six days’ worth of dry spilling in 2020, placing them as the second and third worst offenders respectively.

Northumbrian Water’s overflows performed best of all companies for dry spilling, yet each still saw more than a day’s worth of dry spilling in 2020.

The use of storm overflows is regulated by the EA, which relies on “event duration monitoring” (EDM) devices installed across the sewage network that detect how often and for how long sewage is being released from individual overflows.

Rollout of the devices began in earnest in 2016 yet coverage is still spotty across the network, with Anglian Water still yet to install EDM monitors at more than half of its sites by 2020.

River campaigners and water companies say that EDM data fails to capture the whole picture of the chemical and sewage pollution in our rivers.

Water companies do not publicly release data about the volume or quality of the water that comes out during the hours of spilling. But they argue that spillages can often come from groundwater which may not be harmful to the environment.

Telegraph

Northern Powergrid sorry for Storm Arwen trillion pound compensation error

Northern Powergrid is paying tens of thousands of pounds to customers hit by days of outages in November.

But a number with Halifax and Newcastle postcodes received cheques made out for 13-figure sums.

Northern Powergrid said a clerical error was to blame.

Pictures of the erroneous cheques have been circulating on social media days after the firm was criticised for taking months to process compensation claims.

Gareth Hughes, 44, from Hebden Bridge in West Yorkshire, shared a picture of his cheque for more than £2.3tn.

Mr Hughes, who was without power for more than three days, said he had been sent a previous cheque for £135 but had complained as he was told he was entitled to more.

He said the new cheque made him smile, adding: “But I knew it wasn’t a value that could be realistic.”

Mr Hughes was without power for more than three days during Storm Arwen

A spokeswoman for Northern Powergrid said an electricity meter reference was incorrectly quoted as the payment sum.

“As soon as we identified the clerical error, we ensured all 74 customers’ cheques were stopped so they could not be cashed,” she said.

The firm said the error was being investigated and is thought to be an isolated incident.

BBC News

New electricity ‘superhighways’ needed to cope with surge in wind power

Energy companies are pushing for the rapid approval of new electricity “superhighways” between Scotland and England amid fears that a lack of capacity will set back the country’s wind power revolution.

Businesses including SSE and Scottish Power are calling on the industry regulator Ofgem to approve a series of major new north-south power cables in a bid to ease congestion on the existing electricity network.

The plans are vital for a string of new turbine fields being built off the Scottish coast as part of efforts to quadruple Britain’s wind power production before fossil fuel use comes to an end.

The National Grid said in November that roughly 17 gigawatts of capacity would be needed for electricity links between Scotland and England by 2033, even under a pessimistic scenario for the introduction of green energy.

At the moment there is about 6 gigawatts of capacity, which the industry has claimed is not even sufficient for current levels of output.

The power system is already so congested that Scottish wind farms have to be turned off even when there is demand for power south of the border, with generators fired up in England instead.

This costs consumers hundreds of millions of pounds every year because the National Grid, which is responsible for ensuring supply and demand are balanced, must pay wind farms to temporarily shut down.

One major project designed to ease this problem is an undersea electricity “superhighway” proposed by SSEN Transmission, part of SSE, and National Grid Electricity Transmission (ET).

It would be the first of two identical links, each with a capacity of 2 gigawatts, running from Peterhead, in Scotland, to a point inland at Drax, North Yorkshire.

However, SSE is awaiting approval for the scheme from Ofgem.

A spokesman for SSE said on Friday: “It is vital that there are no delays to the delivery of this critical national infrastructure.”

Scottish Power is also proposing two other 2 gigawatt cables that will run from Torness to Hawthorn Pit, County Durham, and to South Humberside.

Ofgem did not comment.

Leases that could enable another 25 gigawatts worth of wind projects off the coast of Scotland were last month awarded by the Crown Estate in a sign that even more links will be needed in coming years.

Tom Edwards, a senior modeller at the energy consultancy Cornwall Insight, said improving the country’s north-south power links will be essential for the whole of Britain to benefit from the massive wind boost.

He added: “At the moment there is not enough capacity to deal with all the wind projects that are in the pipeline north of the border and, although power companies have already committed to quite a lot, there are still questions about where the rest will come from.”

On Friday wind farm owner Vattenfall, which has just secured approval for a new project off the Norfolk coast, also backed the calls for grid improvements.

Alwyn Poulter, the firm’s head of public and regulatory affairs, said: “There are some really key areas of the grid that need to be upgraded and one of those is the bottlenecked cables that take electricity between Scotland and England.

“They are going to be really quite important for the future, particularly as we look to build out more projects in Scotland.”

Telegraph

Coal-fired power plant to cost consumers £30m next winter

Energy consumers face paying more than £30 million to keep Britain’s last coal-fired power plant open next winter as the government seeks to bolster electricity supplies.

Uniper’s Ratcliffe-on-Soar plant in Nottinghamshire is in line for the payment through the government’s capacity market auction this week, analysis by The Times and SourceMaterial has found. The expected subsidy is to be paid by households and businesses on their energy bills despite a looming ban on the dirtiest form of power generation from October 2024. Britain’s other coal plants are both due to shut before next winter.

The capacity auction pays power plant owners a retainer to guarantee that they will be able to generate when needed. Most plants are contracted years in advance, with final capacity secured one year out. Last month Kwasi Kwarteng, the business secretary, set a target of securing an extra 5.4 gigawatts in the final auction for next winter, a greater amount of power capacity than could be provided by the generators qualified to take part.

That decision, which Kwarteng said reflected “uncertainties within the power sector”, is expected to result in the auction paying out a record high price per kilowatt of capacity, far more than in previous winters. “The target has been set to buy everything possible,” Tom Edwards, of Cornwall Insight, an energy consultancy, said.

The auction for the 2022-23 capacity market is scheduled to begin tomorrow, but was called a fait accompli by Richard Howard, of Aurora Energy Research.

The Times

Landlords scramble to buy eco properties and avoid £10k upgrade costs

Landlords have scrambled to buy energy-efficient properties in a bid to get ahead of costly eco upgrades that could land them with a £10,000 bill.

Half of all homes bought by investors so far this year had an Energy Performance Rating of C or above. This was a record high, and up from a third of buy-to-let purchases in 2020, according to estate agency Hamptons.

Landlords have flocked to more eco-friendly investments ahead of Government targets to ensure all new lets have an EPC rating of at least C by 2025, and by 2028 for existing lets.

The new rules are yet to be finalised, but they are expected to land investors with a bill of £10,000 per property to make upgrades. Landlords who miss these deadlines will be fined up to £30,000.

Aneisha Beveridge, of Hamptons, said: “Given it will prove impossible for all homes to secure an EPC rating of at least a C without significant cost, it’s likely to mean older homes will become considerably less attractive to landlords.

“Instead, investors may focus their strategy on buying new-builds, with rental homes becoming concentrated in blocks or streets where properties already hold a C rated EPC certificate, or where it’s possible to achieve this without significant work.”

Investors have increasingly turned their attention to newer build homes, especially flats, which typically have better EPC ratings.

This trend has contributed to a north-south divide between the energy efficiency of rental homes, with landlords in London buying the most efficient buy-to-lets in England and Wales.

In the capital, 66pc of homes bought by investors so far this year already had an EPC rating of C or above. Meanwhile, just 34pc of landlords in the North East bought a buy-to-let with a rating of between A to C.

Investors keen to get ahead of the incoming eco rules have been buoyed by a growing number of banks and building societies offering lower mortgage rates to landlords buying more energy efficient properties.

Telegraph

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