Weekend press round-up: White paper to propose automatic switching plan

In our latest review of sector coverage across the national newspapers, key policies from the Energy White Paper – predicted to be published today – are assessed. These include plans to automatically switch energy customers to a cheaper tariff at the end of their contract and progress on the Sizewell C project.

Energy customers to be automatically switched to cheaper tariff to avoid ‘loyalty penalties’

Energy customers will be automatically switched to a cheaper tariff at the end of their contract under Government plans to end so-called “loyalty penalties”.

The crackdown on “rip-off tariffs” will see a new “opt-out switching” system introduced, in which consumers are automatically signed up to a competitive new deal when their initial contract ends.

The historic move, set to be announced in a white paper next week, is to stop energy companies imposing so-called “loyalty penalties” – when long-standing customers are lumbered with worse tariffs than new customers or those who try to renegotiate how much they are paying.

It is part of a package of measures aimed at cleaning up Britain’s energy system, boosting green jobs and keeping bills affordable as the country moves towards Net Zero emissions by 2050.

Alok Sharma, the Business Secretary, will also announce next week that the Warm Home Discount Scheme, which knocks £140 off the electricity bills of eligible pensioners and low-income households, will be extended to 2026.

It will cover an extra 750,000 households, meaning almost three million households in total will be eligible.

In addition, major investment will be made in offshore wind, clean hydrogen, carbon capture and storage, and advanced nuclear.

A Whitehall source said: “This Government is revolutionising the way the UK powers its homes, buildings and industry – but we are also overhauling the system in favour of the consumer.

“We do not believe that energy companies should be able to roll over contracts indefinitely or punish long standing, loyal customers.

“That’s why we’re going to make it even easier for people to switch to cheaper tariffs and drive down bills so they can keep more money in their back pocket.”

The measures come after a £2bn Green Homes Grant was introduced in September, which makes grants of up to £10,000 available to those on the lowest incomes to insulate their homes with measures such as cavity wall insulation, draught proofing, and double glazing.

This week the Government also pledged to make the UK the first major economy to end its support for fossil fuel projects overseas.

Sunday Telegraph

Boris Johnson approves talks on new nuclear power plant at Sizewell

Boris Johnson has approved the start of negotiations with EDF about funding a new £20 billion nuclear power plant despite concerns that taxpayers would foot the bill for any extra costs.

The government is considering backing Sizewell C, a twin-reactor plant in Suffolk. It could generate 3.2 gigawatts of electricity, enough to provide 7 per cent of Britain’s energy needs.

The move is a vital part of the prime minister’s pledge to reach net-zero emissions by 2050. Most reactors are due to shut down this decade, leading to fears of blackouts in the 2030s.

China General Nuclear Power (CGN), a Chinese state company, has a 20 per cent stake in Sizewell C but is thought to be planning to pull out, increasing the need for new investors. The government is considering taking an equity stake in the plant amid concerns that private investment could still leave it with multibillion-pound liabilities. Taking an equity stake would allow taxpayers to benefit from any profits.

Sizewell C is now the only project in contention for government investment. The government offered to take a one-third stake in Hitachi’s Wylfa plant on Anglesey, but the Japanese company cancelled it in September.

The Times

Gas boilers stay on market despite pledge

British Gas will continue to market and sell gas boilers despite government hopes to start phasing them out.

Britain’s largest energy supplier argues it needs to “upskill” its engineers and develop alternative technology before it can offer greener alternatives. Others such as Ovo, which took over SSE this year, will also continue to promote the polluting boilers.

The government wants homeowners to replace gas boilers with ground and air source pumps that use the heat from the environment to warm homes rather than the burning of fossil fuels. The pumps can be powered by electricity from renewable sources.

The government has moved forward plans requiring all new homes to have a heat pump installed from 2025 to 2023. This is to help meet its legally binding target of achieving net zero emissions by 2050.

If they install new gas boilers now, homeowners may be reluctant to replace them for more than a decade. A typical gas boiler can last 15 years.

Home energy use accounts for 15 per cent of Britain’s greenhouse gas emissions. Existing homeowners do not have to replace their old boilers, but there is speculation that they may be required to do so in future.

British Gas said that while it was developing heat pump technology, it was better for a household to have a more energy efficient gas boiler. A spokesman said: “We are running a hybrid heat pump trial to find a low-carbon heat solution for UK homes.”

The Times

Tax most polluting cars to speed up transition to electric vehicles, experts say

The Government should slap a 50 per cent tax on the most polluting cars from next year to accelerate the transition to electric vehicles over the next decade, experts have said.

New analysis from the UK Energy Research Centre (UKERC) suggests the dramatic slump in car sales during the pandemic could have worrying consequences for transport emissions over the next decade and beyond unless the government takes radical action.

Sales of new cars this September were the worst in a century, as the financial impact of Covid-19 began to take its toll. UKERC analysis suggests the slowdown in the car market could last until 2025, keeping older, more polluting cars on the road for longer.

Meanwhile people who put off buying a new car in 2020 or 2021 may buy a similar model later in the decade, delaying the date they make a switch to electric, UKERC added. Manufacturers may also try and offload stock of petrol and diesel models ahead of the 2030 ban on their sale.

Such a scenario could lead to an extra seven million tonnes of tailpipe CO2 emissions between 2021 and 2030, UKERC’s director Professor Rob Gross told i.

“You might think that people not buying cars is a good thing for the environment. But it’s not a good thing if they delay buying a relatively inefficient car, and that car is still being used for longer,” he said.

Those cumulative emissions matter, he said: “Every gram of CO2 that enters the atmosphere stays there, potentially for hundreds of years.”

UKERC says more must be done to make polluting cars less attractive to buyers. It proposes imposing a 50 per cent levy on the purchase price of the most polluting vehicles. The tax would start in 2021 with the highest emitting cars, such as performance SUVs and sports cars. It would gradually tighten over the decade until only zero emission cars were exempt.

New cars with high tailpipe emissions already pay a higher rate of tax under the Vehicle Excise Duty, but only for the first year. After that, petrol and diesel motors face a flat charge regardless of their emissions.

UKERC’s analysis suggests such as approach would deliver “significant reductions” in transport emissions over the decade and beyond, as well as helping to speed the transition to electric vehicles. But Professor Gross admitted it would be an “ambitious” approach for the government to adopt. “If government is really serious about its net zero aspirations it will need to be bold,” he said.

“As the car market recovers we think the government needs to strongly steer it towards cleaner vehicles, not just by providing subsidies for electric vehicles but also strongly steering people away from relatively inefficient models,” Professor Gross said.

iNews

‘Not enough’ climate ambition shown by leaders

The UK minister tasked with leading UN climate talks says world leaders are failing to show the necessary level of ambition.

Alok Sharma was speaking at the conclusion of a virtual climate summit organised by the UK, UN and France.

He said “real progress” had been made and 45 countries had put forward new climate plans for 2030.

But these were not enough to prevent dangerous warming this century, Mr Sharma explained.

Taking place on the fifth anniversary of the Paris climate agreement, the summit heard the UN Secretary General warn that every country needed to declare a climate emergency.

Around 70 heads of state and government took part in the meeting, which was organised by the UK, UN and France. They outlined new pledges and commitments to curb carbon.

China’s contribution was eagerly awaited, not just because it is the world’s biggest emitter, but because it has recently promised to reach net zero emissions by 2060.

Achieving net zero means that emissions have been cut as much as possible and any remaining releases are balanced by removing an equivalent amount from the atmosphere.

But while President Xi Jinping outlined a range of new targets for 2030, many analysts felt these did not go far enough.

India brought little in the way of new commitments but Prime Minister Narendra Modi said his country was on track to achieve its goals under the Paris agreement and promised a major uptick in wind and solar energy.

According to the UK, some 24 countries had outlined net zero commitments and 20 had now set out plans to adapt and become more resilient to rising temperatures and their impacts.

But despite these commitments, Mr Sharma said not enough had been achieved.

“Have we made any real progress at this summit? And the answer to that is: yes,” he said.

“But they will also ask, have we done enough to put the world on track to limit warming to 1.5C, and protect people and nature from the effects of climate change? To make the Paris Agreement a reality.

“Friends, we must be honest with ourselves, the answer to that, is currently: no. As encouraging as all this ambition is. It is not enough.”

Mr Sharma re-stated a commitment made last year to double the UK’s international climate finance spend. This will bring it to at least £11.6bn over the next five years.

BBC News

Clean Growth Fund backs flexible energy ‘auction house’ Piclo

The government-backed Clean Growth Fund has made its first venture capital investment, taking a minority stake in a tech company chaired by a former Big Six energy boss.

The £40 million fund is investing £1.5 million in Piclo, which was founded in 2013 and is now chaired by Volker Beckers, who once led the supplier Npower.

Piclo operates an online marketplace that enables companies to compete to provide “flexible” power supply-and-demand services to network operators such as National Grid.

As Britain develops more intermittent power sources such as wind and solar farms, network companies increasingly need flexible options that can help balance out peaks and troughs in supply without relying on polluting coal or gas power plants.

A growing number of companies are offering these services, such as operating big batteries, co-ordinating industrial customers that can reduce their demand at times when supplies are scarce, or managing smart electric vehicle charging.

Beverley Gower-Jones, managing partner of the Clean Growth Fund, said Piclo offered an “auction house” through which such companies could offer their services.

The Clean Growth Fund was launched in May with half of its investment from the government and half from CCLA, which manages investments for charities and the public sector. It had hundreds of applications for funding and Ms Gower-Jones said it was close to announcing its second investment.

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.