Weekend press round-up: Sunak faces growing pressure over onshore wind

In our latest round-up of the weekend news, prime minister Rishi Sunak faces growing pressure to relax planning restrictions on onshore wind farms in England; Rolls-Royce is reported to be in talks with Ineos to build a mini-nuclear plant to power its chemical refinery in Grangemouth; and the Environment Agency is accused of failing to punish farmers that are polluting rivers.

Michael Gove’s support for onshore wind farms fuels Tory rebellion

Michael Gove has told allies he supports ending the ban on onshore wind farms, leaving Rishi Sunak’s Cabinet split on the issue and fuelling a growing Tory rebellion.

The Levelling Up Secretary is understood to have been joined by Grant Shapps, the Business Secretary; and Graham Stuart, the climate change minister, in privately supporting the removal of a Cameron-era prohibition on new turbines.

On Saturday, a band of Tory rebels reached 30 signatories on an amendment to Mr Gove’s planning bill that would allow new developments, threatening to inflict a defeat on Mr Sunak in the House of Commons on the issue.

The PM is yet to decide whether to overturn the ban, a decision which some argue would boost the UK’s energy security.

The growing prospect of a U-turn would likely dismay other members of the Cabinet, including Chris Heaton-Harris, the Northern Ireland Secretary; and Steve Barclay, the Health Secretary, who have previously opposed onshore wind.

Jeremy Hunt, the Chancellor of the Exchequer, has expressed support for new wind farms in the past, but is not understood to have pushed for them during the latest rebellion.

It comes as Britain’s biggest generator of renewable electricity warned that Mr Hunt’s tax raid on the sector will squeeze energy supplies this winter.

While Mr Gove and Mr Shapps are understood to be privately supportive of the reintroduction of wind farms, they are also concerned the policy will be unpopular with Conservative MPs and voters.

An ally of Mr Gove said he would “look to engage constructively with colleagues” on the issue.

The developments have been effectively banned since 2016, and Whitehall sources said concerns remain about their lower efficiency compared with offshore developments and local opposition to their construction.

In an interview in the Telegraph, the Tory MP leading an independent review of net zero signalled that it was likely to back onshore wind in some form.

Chris Skidmore – who also revealed he is standing down at the next election – said: “I personally feel that we need to look at every opportunity to investigate renewable and clean technologies and how we can deploy them further and faster.”

While Mr Skidmore insisted he did not want to prejudge the conclusions his review would reach on the matter, he said that “since the moratorium, public opinion has fundamentally shifted on onshore wind”.

“The question now is not whether onshore wind should happen, but how onshore wind is delivered, and for me, the biggest policy question that I’m interested in is how you create community consent,” he said.

The rebels also include Boris Johnson, Liz Truss, and Alok Sharma, the former COP 26 president.

Mr Sunak is not expected to accept their amendment, which was tabled by Simon Clarke, the former levelling up secretary, but sources close to discussions said he could propose a similar amendment of his own, allowing him to satisfy supporters of onshore wind without being seen to cave to backbench pressure.

The Telegraph

Rolls-Royce in talks to build mini-nuclear reactor for Sir Jim Ratcliffe’s chemicals plant

Sir Jim Ratcliffe’s chemicals empire is in talks with Rolls-Royce to build a mini-nuclear power station to power his Grangemouth chemicals refinery in a major boost to British industry.

The billionaire’s company Ineos is in early stage discussions with Rolls over an agreement that could help transform both of their fortunes and become a blueprint for the future of power in British heavy industry.

Industrial giants such as Ineos, one of Britain’s largest private companies, are under huge pressure from soaring energy and carbon costs.

Rolls-Royce is leading a consortium to develop a fleet of 470-megawatt “modular” nuclear reactors as it attempts to diversify from aero-engines.

Great British Nuclear, a panel of advisors convened by the Government, is understood to have told ministers that it will cost £200bn to hit the national target of 24 gigawatts of nuclear power by 2050.

Former prime minister Boris Johnson put the target in place in May as part of an energy security strategy aimed at lessening Britain’s reliance on international energy markets following Russia’s invasion of Ukraine.

Prime Minister Boris Johnson and Tom Samson, Chief Executive Officer of Rolls Royce SMR when they met in March

Nuclear currently supplies about 18pc of Britain’s power but ageing plants are set to close before the end of the decade, leaving a looming gap in supplies.

Rolls-Royce wants to build about 30 small-scale nuclear reactors which would be largely put together in a factory, cutting costs and the time it takes to build them.

However, the FTSE 100 giant needs customers ahead of time to de-risk the investment, with each plant expected to cost £1.8bn.

The company needs consent from regulators on the reactors’ design, and is hoping to have the first models in operation by the end of the decade.

Tom Samson, head of Rolls’ small modular reactor (SMR) business, this week called on the Government to start talks about potential support for the plants.

He warned of a looming electricity crunch, telling MPs that spending the next two or three years just talking about building more nuclear power “is going to really affect consumers in the 2030s”.

Mr Samson said: “It’s really important that we take action now.”

The Telegraph

Environment Agency fails to punish farmers who turned rivers into ‘toxic soup’

Just one farm was sanctioned for breaking laws designed to stop water pollution out of 2,000 inspected, data shows.

About half had been found to have breached regulations.

Leading green groups have accused the Environment Agency of being missing in action, as figures released under freedom of information laws also show the regulator inspects only about 2 per cent of England’s farms a year to check compliance with pollution rules.

Although most public anger over England’s polluted rivers has been directed at water companies, nitrogen and phosphate pollution washing off farmers’ fields is the number one reason that waterways fail to meet good ecological standards.

Yet just 2,213 inspections to assess nitrogen pollution compliance took place on England’s 105,000 farms from the start of 2020 to the end of 2021, figures from the Department for Environment, Food and Rural Affairs reveal.

About half the inspections found breaches, suggesting that even with such minimal oversight, incidents of pollution are frequent and widespread.

The lack of surveillance and enforcement has prompted two green groups, ClientEarth and WWF, to lodge a formal complaint with Britain’s post-Brexit green watchdog, the Office for Environmental Protection. They argue the government is in breach of at least three regulations controlling nitrogen pollution.

“While many farmers are putting more sustainable practices in place, unfettered agricultural run-off from other farms is turning many of our rivers, streams and lakes into toxic soup,” said Kyle Lischak at ClientEarth, an environmental law group. “Inspections and sanctions remain pitifully low. We argue this failure is unlawful.”

Nitrogen is used by farmers in fertilisers but can pollute rivers when washed off fields, harm sensitive habitats on land and be released into the atmosphere as a greenhouse gas. Globally, 68 per cent of agriculture’s nitrogen emissions comes from crops grown to feed animals, followed by nitrogen released by the build-up and management of manure.

Tom Bradshaw, deputy president of the National Farmers’ Union, said: “Good water quality is of paramount importance and farmers take their environmental responsibilities seriously and recognise the role their businesses can play, alongside producing food.” He said the farming industry had already made “great strides” on voluntary action to benefit waterways.

The government did not reply to requests for comment.

It is facing two new legal challenges against its recent flagship plan to cut sewage discharges from storm overflows. The Marine Conservation Society is announcing today that it is applying for a judicial review of the strategy, which does not require any improvement of the country’s storm overflows next to designated bathing sites until 2050.

“We’ve tried tirelessly to influence the government on what needs to be done, but their plan to address this deluge of pollution entering our seas is still unacceptable,” said Sandy Luk, the society’s chief executive.

The Times

UK households have cut energy consumption by 10%, say suppliers

Britons have cut their gas and electricity use by more than 10% since October in the first evidence of the impact of the energy crisis on household habits, according to two of Britain’s biggest suppliers.

E.ON, Britain’s second-largest supplier, and the owner of Utility Warehouse have reported “double-digit” declines in recent weeks.

As households cut back on use in response to surging bills, the business secretary, Grant Shapps, has written to bosses across the sector to say that customers cutting back on energy use to save money should not face an increase in their direct debits.

Sharing a letter he sent to the chief executives of Britain’s energy suppliers over the weekend, he tweeted on Sunday: “Households shouldn’t see their direct debits rise when their energy use falls.”

In the letter, Shapps said he was “disturbed” by reports that some consumers had been told their direct debits would go up “when they are making huge efforts to reduce their usage to save money at a time when household incomes are squeezed”.

He added: “With other costs increasing for households, it is critical that we do what we can to help. I am interested to understand how you intend to ensure that your direct debit system does not overestimate charging.”

Energy industry executives are watching keenly to see if concerns over high bills will translate into a significant reduction in usage this winter.

Michael Lewis, the chief executive of E.ON, which has 5.6 million customers, said the supplier was “seeing reductions of 10 to 15%” against seasonal averages in recent weeks.

“It’s quite a big effect. We’re analysing our data and trying to understand what’s happening. It will likely be people putting the heating on for shorter periods or turning down the thermostat in their home. Those are the two big levers.”

Andrew Lindsay, the chief executive of stock market-listed Telecom Plus, said gas use was down about 10% in recent months and “our expectation is that there will be a further decline in consumption as people self regulate. We’re forecasting a further double-digit decline in consumption”.

Telecom Plus owns Utility Warehouse, which has more than 800,000 customers and offers cheap tariffs by bundling together energy, broadband, mobile and insurance services.

Lindsay and Lewis both said the unseasonably mild weather in October and November had made analysing consumer behaviour more difficult.

Lindsay added: “We expect [energy reduction] to continue over the course of the winter – for people to self-regulate, but they can’t self-regulate to zero. It’s finite and there is a big government campaign to encourage people to be energy efficiency and that will definitely result in people being more prudent, which is the right thing to do. So we factored that into our forecasts.”

Ministers plan to launch a £25m public information campaign before Christmas to encourage people to reduce their energy use this winter. Wrangling over whether to run a campaign has spanned three prime ministers and divided the Conservative party, with some MPs including Liz Truss concerned it will be seen as “nannying”.

The Guardian

UK doubles coal imports to head off winter energy crisis

Rising gas prices resulting from the war in Ukraine have forced the UK to nearly double its coal imports in the fight to keep the lights on through the Winter.

The increasing use of coal-generated power in the UK comes after years of the country shifting to cleaner electricity from gas-fired power plants and renewables, but is deemed vital as Russian president Vladimir Putin crimps gas supplies to Europe.

Figures from Kpler, a commodity analytics firm, show that last month more than 560,000 tonnes of coal came into British ports, compared to the 291,089 tonnes that arrived in October 2021, a 93 per cent increase.

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In the first 10 months of this year, the UK imported more than 5.5 million tonnes of coal, already exceeding the 4.2 million tonnes throughout the whole of 2021.

Victor Katona, senior analyst at Kpler said increased demand for coal is because of the rising price of wholesale gas. “Absent the option of burning fuel oil – the most cost-efficient power generation option right now – coal- is very much the best option out there, albeit the most polluting one, too.

“With gas prices like these, relying on natural gas for power generation is a no-go zone for anyone who can switch between fuels.”

The doubling of the October coal imports suggest the UK is accelerating purchases as winter draws nearer. Official data for the Department for Business, Energy and Industrial Strategy for the April to June quarter showed the annual increase was only 44 per cent.

The Times

Take shorter showers to help us refill reservoirs, say water bosses

Households have been urged to continue taking shorter showers despite Thames Water lifting its hosepipe ban after 33 per cent more rain than average this month.

Thames Water on Tuesday lifted its hosepipe ban, imposed on its 10 million customers in August, as the South East experiences the wettest November in at least five years.

November has already received a months’ worth of rain, meaning river and reservoir levels have started to improve, Thames Water said.

But it warned that more rain would be needed to fully refill supplies, and called for households to continue using less water at home through habits such as taking shorter showers, and fully loading washing machines.

“Careful consideration has gone into our decision to remove the ban. Despite the recent rain, we still need to protect our future water supply,” said Sarah Bentley, the chief executive of Thames Water. “We need more rain throughout winter to ensure our rivers and reservoirs are fully recharged, ready for spring and summer next year.”

She added: “Whilst storage levels have improved at many of our reservoirs, we’re not out of the woods yet.

“Some sites in West London remain below average, which is why we’re adopting a cautious approach and carefully monitoring water levels throughout autumn and winter.

“It’s also why fixing leaks remains our top priority. We’re investing millions to upgrade infrastructure across the region.”

Thames Water has come under pressure over its poor record on leaks, the worst in the industry, which it blames on ageing infrastructure.

Karen Gibbs, from the Consumer Council for Water, said: “Even though restrictions have been lifted for Thames Water customers, it’s still really important that people continue to use water wisely, as it will take considerable time for the environment to fully recover from the drought.

“There also remain significant cost of living benefits to saving water which can take some of the heat out of energy and water bills, through simple steps like shortening your time in the shower or always ensuring your washing machine is fully loaded.”

High levels of rain have lifted fears that hosepipe bans would continue well into 2023, although the Environment Agency warned last month that some areas of the country were likely to stay in drought status into the next year despite rainfall.

The South East had 100 millimetres of rain in the first two months of November, compared to a long term average of 75mm.

Yellow rain warnings are in place for the South West, Orkney and Northern Ireland.

South East Water is expected to also lift its hosepipe ban affecting customers in Kent and Sussex in the coming weeks.

Lee Dance, Head of Water Resources at South East Water, said: “We have been reviewing continually our water resource position and will be removing the Temporary Use Bans we have in place in Kent and Sussex soon.”

Southern and Welsh Water have already lifted the restrictions imposed this summer as the country experienced one of its driest periods on record.

South West Water said its hosepipe ban was still in place for customers in Cornwall, who have been offered £30 off their bills if the local Colliford Reservoir reaches 30 per cent storage capacity by the end of the year.

The 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.