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Centrica’s British Gas launches first residential tariff for electric vehicle users offering cheaper electricity at night

Centrica PLC’s (LON:CNA) British Gas unit has launched a new smart time-of-use tariff for electric vehicle users offering cheaper electricity at night between 12.30am and 7.30am to charge their cars.

In a press release on its website, the FTSE 100-listed group said electric vehicle drivers use up to 80% more electricity if they charge at home and so can benefit from tariffs which pass on cheaper overnight wholesale electricity costs.

Peter Simon, Customer Propositions and Product Director at British Gas said: “This is our first residential EV product. Over the coming months, we will launch further electric vehicle charging services to both residential and business customers.”

The smart tariff is dual fuel, fixed until November 2020 and has no exit fees. The average annual bill of £1,547 is based on an average electric vehicle user consuming an additional 2,340kWh of electricity per year by charging their car. It is available for new and existing customers paying by direct debit.

Earlier this year, Centrica invested in Driivz, which offers end-to-end software solutions for electric vehicle charging, demonstrating its commitment to this market.

There are currently 200,000 electric vehicles on the road in the UK, and the number is forecast to grow to 1.4mln by 2025.

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UK’s richest man eyes North Sea oil and gas fields

Britain’s richest man Jim Ratcliffe is hoping to extend his grip on the North Sea by buying oil and gas fields from US giant ConocoPhillips.

Mr Ratcliffe’s company Ineos and ConocoPhillips have both confirmed that they are in exclusive talks.

Among the assets up for grabs is Conoco’s 6.5% stake in the Clair field, west of Shetland.

The field potentially has 7 billion barrels of oil in place, according to BP’s chief executive Bob Dudley.

BP recently bought a 16.5% stake in the Clair field from ConocoPhillips, giving the UK oil giant a total holding of 45.1%.

Reports suggest that the assets ConocoPhillips is selling could be worth as much as $3bn (£2.3bn).

They do not include the company’s oil terminal in Teesside or its commercial trading group based in London.

 

The North Sea is still a relatively new area for Mr Ratcliffe and Ineos.

The billionaire, whose £21bn fortune makes him the UK’s richest man according to the Sunday Times rich list, has traditionally invested in speciality chemicals businesses.

Ineos owns the Grangemouth oil refinery site in Scotland which manufactures a range of petrochemicals that are used in a wide range of products including bottles, food packaging and in the pharmaceuticals industry.

neos first acquired a number of North Sea gas fields in 2015 before it buying up the oil and gas business owned by Denmark’s Dong Energy for £1bn two years later.

The Sunday Times reported that Ineos had put down a deposit in exchange for three months of exclusive talks with ConocoPhillips.

Ineos declined to comment.

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Which?: Energy companies need to install 30 smart meters a minute to meet 2020 target

Consumer rights group raises fresh fears over pace of smart meter roll out, as government awaits latest damning NAO report

The scale of the challenge facing the UK’s smart meter roll out will be hammered home once again this week with the release of two major reports warning the high profile project is running badly behind schedule.

Today consumer rights group Which? published an update warning energy suppliers will need to triple the current rate of smart meter installation to hit a target of replacing all existing meters by 2020.

Which?: Energy companies need to install 30 smart meters a minute to meet 2020 target.

 

The organisation calculated that to meet the long-standing target suppliers will need to install an average of 30 smart meters per minute, every day, for the next two years, to fully replace 46 million existing meters.

The report comes just days ahead of the anticipated publication of a new report from the National Audit Office, which is expected to feature scathing criticism of the £11bn project, accusing it of being badly delayed and over budget. It is also set to highlight how the rollout has seen millions of first generation smart meters installed that will have to be upgraded in the coming years to provide the smart grid functionality and interoperability that is expected to be one of the main advantages of the technology.

The Which? report also argued that government estimates for the expected savings on an annual dual fuel bill in 2020 as a result of the rollout have already fallen from £26 to just £11.

“So far, large suppliers have installed more than 11 million smart meters, however this is just a quarter of the 46 million existing meters that could potentially be replaced,” the organisation said.

The latest update builds on an analysis from February this year, which calculated that large energy companies would need to install 24 smart meters a minute to meet the deadline. It adds that far from speeding up the rollout has slowed down in recent months.

“Energy suppliers maintain that they will meet the 2020 target, but as the deadline draws closer, Which? believes this is looking increasingly unlikely and more must be done to ensure that all consumers are offered the opportunity to benefit from upgrading to a smart meter,” the group said.

“The smart meter rollout has been plagued by problems and been massively delayed, the benefits have been overstated and the savings they could bring consumers are at risk,” added Alex Neill, Which? managing director of home products and services. “Therefore it’s time for the government to replan with industry and consumer groups to ensure people get the maximum benefit at the minimum cost.”

Smart meters and related smart grid technologies are wiodely regarded as crucial to efforts to improve energy efficiency and decarbonise UK power supplies by enabling more intelligent management of electricity supply and demand.

The government has consistently defended the handling of the roll out and a spokesman for the Department for Business, Energy, and Industrial Strategy today said the project had already seen millions of people seize the opportunity to “take control of their energy use to cut their bills”.

He added that the projected £11 a year reduction in annual fuel bills was “not insignificant” and would deliver £300m of savings across the economy in 2020 alone.

A spokesman for trade body Energy UK offered a similar take. “Energy suppliers are committed to meeting the government’s deadline of ensuring all eligible households and businesses are offered a smart meter by 2020,” he said. “The industry is working hard to reach as many customers as possible and to ensure the rollout is carried out safely, efficiently, cost-effectively and delivers a positive experience for customers. With more than 12 million smart meters now installed in Great Britain, more and more customers are enjoying the benefits that smart meters bring and are reporting high levels of satisfaction.”

Robert Cheesewright, director of corporate affairs at Smart Energy GB, the body tasked with managing the smart meter roll out, said: “Britain’s smart meter rollout is a vital upgrade for the nation’s energy infrastructure. Smart meters are crucial if we want to tackle climate change and reduce our carbon footprint. In line with the government’s figures, smart meters will help people save on average almost £50 a year on their energy bills by 2030. Energy suppliers are working hard to offer all households smart meters as soon as possible.””

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Oil and Gas UK welcomes publication of draft Brexit deal

Oil and Gas UK (OGUK) has welcomed the long-awaited publication of the draft Brexit withdrawal agreement.

The 585-page document sets out the terms of the UK leaving the European Union.

OGUK, which represents the North Sea industry, has welcomed its publication, and said it will continue to put forward its priorities to the government over discussions “in the coming days”.

It said it remains focussed on protecting the workforce, trading with the EU, the internal energy market and its license to operate.

The draft agreement states EU citizens living and working in the UK (and vice versa) will have their rights protected after Brexit.

Along with the withdrawal agreement, the UK government and the European Commission have published a shorter document setting out the Britain’s future relationship with the EU.

Some points relating to the energy sector feature, specifically on having mechanisms in place to “ensure security of supply and efficient trade”.

 

Deirdre Michie, chief executive of Oil and Gas UK, said one of the organisation’s priorities is to maintain a strong voice in Europe.

She said: “We welcome the further detail provided to industry through the draft withdrawal agreement. This is an extensive legal document which we will now analyse and review in full with our membership.

“Our focus remains on securing the best outcome for the UK’s offshore oil and gas industry. That is, protecting the offshore industry from future EU regulatory changes, minimal friction between the UK and EU, maintaining a strong voice in Europe, protecting energy trading and the internal energy market and protecting our licence to operate.

“We will continue to put forward these priorities in our discussions with the Government in the coming days.”

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Energy firms SSE and Npower renegotiate terms of merger

Energy firms SSE and Npower are renegotiating the terms of a merger of their UK retail operations, blaming the introduction of an energy price cap.

The merger, which has been cleared by the regulator, is set to create the UK’s second-biggest energy company.

Both firms said they still thought the merger had benefits, but that any final deal was likely to be delayed.

An energy bill price cap of £1,137 a year for “typical usage” is due to come into force in the new year.

It means suppliers will have to cut the price of their default tariffs to the level of the cap or below it.

Energy bills to be capped in new year

Watchdog clears SSE-Npower merger

Households to benefit from energy price cap

The government introduced legislation earlier this year to establish the price cap following concerns about how efficiently the energy market was working.

In September, SSE said the cap would lead to “significantly lower” profits than it had expected at the start of the financial year in its retail arm.

 

The energy firm said it had become apparent that the impact of some “recent market developments”, including the price cap, meant that the “commercial terms associated with the proposed combination will need to be reconsidered”.

As a result, SSE and Npower’s German owner Innogy were in talks “regarding potential changes” to the commercial terms of the deal, it added.

SSE chief executive Alistair Phillips-Davies said: “We continue to believe that creating a new, independent energy supplier has the potential to deliver real benefits for customers and the market as a whole, and that remains our objective.”

Talks will take place over several weeks, with an update on progress in mid-December.

‘Adverse developments’

The two companies were aiming to complete the merger – which would cut the “Big Six” energy firms down to five – in the first quarter of 2019.

However, SSE said it was now not likely to be done by then.

Innogy said in a statement that “adverse developments in the UK retail market and regulatory interventions such as the price cap have had a significant impact on the outlook for the combined retail company”.

It said the negotiations would include talks about “potential additional direct or indirect financial contributions by each party”.

Earlier this week, energy regulator, Ofgem said the cap would save 11 million customers an average of £76 a year on their gas and electricity bills.

Households in England, Scotland and Wales on default tariffs – such as standard variable tariffs – stand to benefit. Consumers in Northern Ireland have a separate energy regulator and already have a price cap.

More than half of all households in Britain are on default tariffs because they have never switched or have not done so recently.

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28,000 jobs at risk in north of England over low-carbon economy

As many as 28,000 jobs will be lost in the north of England in the next 12 years under the government’s drive towards a low-carbon economy, a thinktank has warned.

The Institute for Public Policy Research (IPPR) said in its report that the region could be at the heart of a “clean energy revolution” – with a potential for 46,000 new green jobs – but instead faced economic decline under current plans.

Luke Murphy, an associate director at IPPR and co-author of the report, said: “With nearly half of the UK’s renewable energy being produced in the north, it is clear that the region is ideally placed to deliver a green jobs revolution of 46,000 new jobs by 2030.”

Murphy described the move towards a low-carbon economy as an “urgent necessity” to limit the impact of global warning. He urged ministers to commit to a more ambitious decarbonisation policy “where communities are protected from decline” which he said must be at the heart of its industrial strategy.

The north of England produced 48% of the UK’s renewable electricity between 2005 and 2014, the report said, yet the region is also home to the largest number of coal and gas power stations in England.

The report, published on Monday, calls on the government to “learn from the mistakes of the past” and avoid a repeat of the catastrophic economic decline that followed the closure of coal, steel and shipbuilding industries across the north since the early 1980s.

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Fracking to start again despite earthquakes striking underneath Lancashire site

Fracking will start again despite it triggering earthquakes in Lancashire. Energy firm Cuadrilla started drilling for shale gas last week, for the first time in seven years that it has happened in the UK. The company called a halt due to the tremors, but says it will start again on Thursday. They had stopped after the latest – and biggest – tremor was detected on the grounds of their Preston New Road site, Lancashire.

The seismic event, measuring 0.48 on the Richter Scale, was described as a ‘tiny’ tremor by Cuadrilla and within operating expectations. Campaigners, who lost a High Court bid to stop fracking, have demanded the firm stop following the latest set of quakes.

A spokesman for Frack Free Lancashire said ‘Who knows what is happening under our feet? ‘This is the earth giving out a warning, as predicted by geologists following the previous failures of fracking in Lancashire. ‘The increased risk of larger magnitude quakes is serious. Cuadrilla must stop now, for all our sakes.’ In 2011, fracking was halted for seven years after experts said two Lancashire tremors – one registering 2.3 magnitude – were caused by shale gas test drilling.

The 0.4ML tremor on Tuesday was classed as an amber event as part of the traffic light system in place for monitoring seismic events during operations. Cuadrilla said it was required to reduce the rate at which it was pumping fracturing fluid once the seismic event had been detected, but it had ‘adopted extra caution’ and had stopped pumping for the day in response. Work got under way again on Wednesday morning, however fracking had already stopped before the second tremor was detected. Caudrilla said earlier this month it would spend at least three months fracking two horizontal wells, and then it would test to see if the gas flow was commercially viable. Anti-fracking campaigners tried to stop the process with an attempted injunction but failed in their bid.

Drilling began on Tuesday and the first three tremors happened on Thursday, according to the British Geological Survey. On October 18th, the seismic events were small, measuring -0.2, 0.8 and -0.3 respectively. On Friday, the quakes went into positive territory, which is considered an Amber event under a ‘Traffic Light System’ of safety monitoring. Friday afternoon saw 0.3, followed by a 0 quake on October 20th and yesterday’s at 0.4.

‘But it was classed as an amber event as part of the Traffic Light System (TLS) in place for monitoring operational activity. ‘As such we are required to reduce the rate we are pumping fracturing fluid once it has been detected. ‘In fact we have adopted extra caution and have stopped pumping for the day. ‘Seismicity will, as always, continue to be monitored closely around the clock by ourselves and others and we plan to continue hydraulic fracturing again in the morning.

‘Local residents should be reassured that the monitoring systems in place are working as they should. ‘These are tiny seismic events being detected by our monitors as we fracture the shale rock and are not capable of being felt much less cause damage or harm.’

Fracking, or Hydraulic Fracturing, involves pumping vast quantities of water and chemicals into unstable rock to release combustible gas. Drilling for shale gas is still at an exploratory phase. However, reserves of shale gas have been identified across large swathes of the UK, particularly in northern England. More than 100 licences have been awarded by the government, allowing firms to pursue a range of oil and gas exploration activities in certain areas. A government-appointed panel said there could be more tremors as a result of fracking, but they would be too small to do structural damage above ground.

It recommended greater monitoring with a ‘traffic light’ regime, with tremors of 0.5 or above triggering a ‘red light’ and an immediate halt. The Government has been pro-fracking despite concerns over climate change. When Theresa May came to power, she announced householders living near shale wells would enjoy a ‘frackpot’ payout of up to £10,000 each.

However the UN’s Inter-governmental Panel on Climate Change launched a new report only two weeks ago bringing forward the dangerous limits of climate change and calling on world leaders to take immediate action to bring global warming under control by 2040. The extensive list of measures required includes a diverse energy mix of 85 per cent renewables and practically no coal, oil or gas. Pro-fracking lobby group ‘Lancashire For Shale’ said: ‘A 0.4 magnitude event like this is so small it is only possible to detect it using very sensitive instruments like those deployed locally by Cuadrilla and the British Geological Survey. ‘The very open manner in which this event has been reported, and Cuadrilla’s reaction to it, demonstrates just how robust the new controls are and that the Traffic Light System is working effectively.’

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‘Fog of Brexit has had massive bearing on energy bills’ – supplier

Consumers face further price increases if the pound falls further, says Pure Planet

 

Brexit has had a “massive bearing” on UK energy bills and consumers face further price rises if the pound falls further, according to a BP-backed energy startup.

Steven Day, a co-founder of Pure Planet, an app-based renewable energy supplier, warned that the UK’s departure from the EU was the biggest political issue facing the energy sector at the moment.

“The very short-term stuff is the fog of Brexit. That is causing a major problem in terms of what costs consumers will face in 2019. If the pound gets devalued further, energy prices will go up again. That is unequivocal,” he said.

The UK only imports a small amount of electricity, around 6% of supplies, but imports more than half its gas, meaning the country pays more for the fuel when sterling weakens. The pound has repeatedly fallen at signs that a no-deal Brexit is more likely.

Day, a former telecoms executive, said there was “no doubt” the pound’s devaluation was a key factor behind a series of price increases that have hit millions of households this year, as suppliers blamed rising wholesale prices.

Further increases in wholesale costs were likely, he said, which would prove a challenge for the government’s price cap that takes effect at the end of the year.

The co-founder said the market was very different from when he launched his green energy supplier a year ago because the cost of energy was now a “big barrier” for anyone considering joining the market’s 60-plus suppliers.

“The days of the independent sector expanding are over, at least temporarily, while the market consolidates a little bit,” he said.

Day said he was concerned that an exemption in the price cap, which allows green tariffs to breach the limit, could hold back the UK’s switch to renewables.

It is not yet clear if any firms will apply for the exemption but if they did it could affect the perception of green energy, he suggested. “It reinforces the idea that green has to be more expensive … and that will slow down the shift to green energy.”

BP holds a 24% stake in Pure Planet, which is on track to hit more than 75,000 customers by the end of the year.

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UK energy supplier Yu Group shares plunge 80 per cent as it warns profits will vanish on bad debt and accounting concerns

Shares in gas and electricity provider Yu Group collapsed today, plunging by as much as 80 per cent in early morning trading after a profit warning.

 

The energy supplier to the UK’s corporate sector told investors that profits would fall by £10m, leading to a loss for this financial year.

Shares fell from 580p at yesterday’s close to 117p in early morning trading.

The company found several areas of “significant concern” that will hit its bottom line, including problems in how it recognises historic accrued income, higher levels of trade debt that cannot be paid back to Yu Group, and a squeeze in market conditions.

Chief executive Bobby Kalar said: “As founder and majority shareholder, nobody is more disappointed in this development than me.

“Our booked revenue from new sales remains strong and contracted revenue for 2019 is already £67m as at the end of September 2018. We have improved internal controls around working capital management and the board is absolutely focused on restoring the profitability of the business.”

Yu predicted it would not return to profitability until the end of 2019, and even then warned that its profit margin would be lower than previous expectations.

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Energy bills jump 21% in five months leaving millions facing fuel poverty this winter

The average price of the cheapest 30 energy tariffs has jumped by more than a fifth in just five months, new analysis has found.

After price hikes from all of the major suppliers, the average yearly cost of the best deals is now £1,042, having jumped £178 since May.

This sharp rise in prices is likely to leave millions unable to properly heat their homes this winter, despite the government’s proposed price cap designed to protect consumers from rip-off tariffs. The long-awaited cap is now not due to come into force until December.

At the start of April, suppliers were offering 89 tariffs costing under £1,000 per year for the average household. That figure has plummeted to just four, none of which are fixed-price deals.

According to MoneySuperMarket, the cheapest option is now a variable priced “100 per cent Green” tariff from Pure Planet, costing £921 a year.

The cheapest Big Six tariff is a one-year fixed deal from British Gas (‘Energy Plus Boiler Cover October 2019’) at £1,020, £204 cheaper than the Big Six average standard variable tariff.

British Gas, EOn, Scottish Power and EDF, have raised prices twice this year, blaming rising wholesale energy costs.

The government’s energy price cap for people on poor-value variable tariffs is due to come into force in December, “subject to the necessary consultations,” energy regulator Ofgem said last month.

 

Ofgem also raised its safeguard cap on variable tariffs by £47 per year to £1,136 for those who prepay for their fuel.

The cap is designed to protect five million households from being overcharged, and was extended to a further one million homes earlier this year.

Millions of people face not being able to heat their homes this winter or going without other essentials to keep warm.

More than one in 10 households in England – two-and-a-half million families – were living in fuel poverty, a government report said in June before the latest round of price rises.

Separate research found that more than 3,000 people are “needlessly” dying each year in the UK because they cannot afford to properly heat their homes.

The UK has the second-worst rate of excess winter deaths in Europe, a study by National Energy Action and environmental charity E3G found.

Stephen Murray, energy expert at MoneySuperMarket said energy prices were “extremely volatile” at present.

“While prices are rising and getting closer to the level of the price cap (£1,136), it’s worth noting the latter will not stay at the same level. It will almost definitely rise early next year and customers who sit tight now thinking they will be protected will be sorely disappointed.

“The price cap is creating an artificial market, which will still have to reflect market conditions at its next update. That means its level could rise anywhere from £100 to £150.”