UK Government ‘to finance’ Wylfa Newydd nuclear plant

It has been reported that the UK Government is to offer £13.3bn in financial support for Hitachi to build the Wylfa Newydd nuclear power station.

The report from Japanese news agency Kyodo cites sources saying it was aimed at easing concerns about the project costs, which have risen from the initial £10bn estimate.

Hitachi’s Horizon Nuclear Power hopes to start building on Anglesey in 2020.

But UK government officials said they “don’t recognise” the reported claims.

The Department for Business, Energy and Industrial Strategy (BEIS) said discussions were “commercially sensitive and ongoing”.

The Horizon spokesman said: “Given the size of the investment involved and the nature of the project, these discussions are complex and detailed.

“While we understand the strong interest in progress, we will not be commenting until they have reached a conclusion.”

Kyodo reports that costs have risen to about £20bn and the UK Government support would cover a large proportion.

The reports also suggested UK taxpayers could own a 33% share of the project.

But a BEIS official added on Thursday: “We don’t recognise these reports. Nuclear power remains a crucial part of the UK’s energy future but we have always been clear that this must be delivered at the right price for consumers and taxpayers.”

Horizon also still has to clear the main hurdle of submitting its planning application – and have all its investment in place.

If all goes to plan, Wylfa Newydd – replacing the old station – would start generating power by 2025. The plant would have a 60-year operational life.

There has been concern among industry watchers that the project might not even go ahead and also reports that Hitachi may walk away if it was not given UK Government support.

Hitachi’s Horizon Nuclear Power proposes a plant with a capacity of generating 2,700 megawatts of electricity, enough power for about five million homes.

Horizon bought the Wyfla Newydd site in 2009.

UK ministers have insisted the plant must be cheaper than Hinkley Point in Somerset, which given the go-ahead last year.

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EPA’s Updated Annual Oil And Gas Methane Inventory Doesn’t Convey Entire Picture

The U.S. Environmental Protection Agency (EPA) released its annual update to the 2016 U.S. Inventory of Greenhouse Gas Emissions (GHGI) yesterday, showing a slight decrease in total greenhouse gas emissions from 2015 to 2016.

Methane, a potent greenhouse gas and the main constituent of natural gas, is responsible for roughly a quarter of global warming we see today. The GHGI estimates that 2016 methane emissions from the oil and gas industry were 8.37 million metric tons, down just over one percent from 2015 levels.

This decrease is misleading – it’s too slight a dip to indicate that industry is getting a better handle on methane. Studies also suggest that the inventory misses vast amounts of emissions from abnormal process conditions, or super-emitters.

 

EPA updates are positive but incremental

EPA finally included methane emissions from abandoned oil and gas wells. Emissions were estimated from measurement data collected by recent studies. Critically, EPA recognized that the activity data for this category is incomplete, since many abandoned wells predate recordkeeping requirements. In addition to the two million known wells, EPA estimated emissions from approximately 1.2 million more abandoned wells without records.

Proper plugging of abandoned wells can minimize methane emissions in additional to protecting groundwater resources. EPA’s estimate of abandoned well emissions is only about three to four percent of their total estimate of oil and gas emissions, but it’s still a substantial amount – equivalent to the annual natural gas consumption of about 200,000 homes.

Overall, EPA has made progress with this year’s GHGI, continuing their incorporation of recent data sources such as the Greenhouse Gas Reporting Program (GHGRP) and peer-reviewed science. At the source-level, though there still are some categories that should be updated.

For example, EPA has updated their methods for pneumatic controllers to estimate the number of devices from GHGRP data, but continue to use the 1990s emission factors (EFs) to estimate their emissions. Measurements indicate that these EFs are inaccurate, overestimating the emissions from some types of controllers, but failing to account for high-emitting malfunctioning controllers. If EPA updated their pneumatic controller calculation methodology to distinguish emissions from operational and malfunctioning devices, then they could more accurately estimate emissions and facilitate more effective mitigation.

EPA methodology should be updated with top-down data

As part of the country’s obligations under the United Nations Framework Convention on Climate Change, EPA releases a report every April that estimates greenhouse gas emissions from anthropogenic sources.

Emissions are estimated using a bottom-up, or component-level, approach, which multiplies activity data (e.g., number of wells) by emission factors (e.g., average emissions per well). The GHGI does not use a top-down approach, which estimates total emissions from an area based on measured increases in atmospheric methane concentrations and modeling.

The top-down approach tends to provide a more complete picture since the measurements are inclusive of all emissions; in contrast, the bottom-up approach can miss individual sources. Numerous studies have shown that basin- and site-level top-down estimates are higher than traditional, bottom-up inventories.  For example, our research in the Barnett Shale found that site-level well pad estimates were 50 percent higher than component-level estimates.

NAS recommendations for greenhouse gas inventories

Although EPA’s updates this year are valuable and based on scientifically-rigorous data, the GHGI continues to underestimate total oil and gas industry emissions due to fundamental issues with the methodology.

Recently, the National Academy of Sciences, Engineering, and Medicine (NAS), a group of the nation’s most distinguished scientists, released their report on greenhouse gas emissions, including anthropogenic methane emissions. NAS made four recommendations for agency collaboration to improve the accuracy of emission estimates for oil and gas and other methane sources. Here, we discuss the implications of the NAS recommendations for EPA’s inventory.

NAS Recommendation #1: NOAA and NASA should continue and enhance current atmospheric methane observations and advance models and assimilation techniques used by top-down approaches.

NAS recommends expanded efforts to measure emissions with top-down approaches. EPA should coordinate with NOAA, NASA, and other groups to facilitate data collection in priority areas such as oil and gas basins. EDF continues to encourage the development of aerial and other top-down measurement technologies through initiatives such as the Mobile Monitoring Challenge, and recently announced plans for MethaneSAT, which would provide new insights for basin-level methane measurements.

NAS Recommendation #2: The EPA in collaboration with the scientific research community, the DOE, NOAA, USDA, and NASA should establish and maintain a spatially and temporally explicit (e.g. gridded) inventory of U.S. anthropogenic methane emissions.

NAS’s primary message is that emission inventories should be verifiable. Since the GHGI reports national emissions, it is difficult to use top-down data, which comes from smaller areas like basins or sites, to assess its accuracy. The solution is for EPA to develop a gridded inventory that accounts for variation in emissions across space and time. This allows a direct comparison of bottom-up and top-down emission estimates, like EDF performed previously in the Barnett Shale. EPA has already made progress on this front by partnering with Harvard University to grid the 2016 GHGI. EPA should prioritize routinely updating the gridded inventory.

NAS Recommendation #3: The EPA, DOE, NOAA, and USDA should promote a sustainable process for incorporating the latest science into the GHGI and regularly review U.S. methane inventory methodologies.

NAS recommends a formal process for updating the GHGI methods, such as a scientific advisory panel. Typically, EPA has convened workshops, published memos, and solicited comments on proposed updates to the GHGI. Overall, this process has been transparent and effective for implementing incremental changes, but it is not well-suited for making fundamental revisions to the methodology. We suggest that EPA convenes a series of workshops and/or solicits comments related to the use of top-down data and a gridded inventory to update the GHGI. A scientific advisory panel could also be valuable, as long as the panel is balanced by including representatives from academia and public institutions, and not just industry representatives.

NAS Recommendation #4: The United States should establish and maintain a nationwide research effort to improve accuracy, reliability, and applicability of anthropogenic methane emissions estimates at scales ranging from individual facilities to gridded regional/national estimates.

EDF realized the urgency of the oil and gas methane issue when we launched our series of research studies in 2012.  We continue to study methane both in the U.S. and internationally, such as end use emissions from U.S. power plants and fugitive emissions from Alberta well pads. There still are many questions about oil and gas methane emissions that needed to be addressed, such as the most common cause of super-emitters. Further research of U.S. methane emissions will not only lead to a more accurate inventory but also facilitate more effective mitigation to reduce the climate impacts of oil and gas.

£7.3m project to improve electricity supplies between Fernhurst and Plaistow is now under way

Scottish and Southern Electricity Networks (SSEN) has commenced work on its £7.3m project to install over 20km of new underground electricity cables between Fernhurst and Plaistow which, when complete, will make supplies to 6,800 customers more robust, resilient and minimise the risk of power cuts.

The cable route, which begins at SSEN’s main substation at Fernhurst and ends at Plaistow, takes in a combination of public roads and private land. With narrow, tree-lined roads an integral part of the local area’s traditional appeal, working to install over 20km of new cable has required months of detailed planning in conjunction with the Highways Department at Hampshire Highways to ensure that there is minimum disruption to the local community.

The first phase of the project, which starts midway along  Vann Road and heads towards Fernhurst Crossroads, is currently progressing well, and is due to be completed mid-April. For the safety of road-users and staff working on site, Vann Road is closed to all non-essential traffic and all HGVs, with only residents’ access available.

Teams are working five days a week and in areas with higher traffic volumes, weekend working will be in operation from 7am to 5pm.

SSEN’s Project Manager, James Rooney said: “We want to do everything we can to make sure our customers get the best possible service at all times, and this £7.3m project will make the local network more robust and resilient and reduce the risk of power cuts. Also, as we are replacing the existing overhead lines with new underground cables, we are removing the risk of trees coming into contact with our network, which has been the major cause of power cuts in recent years.

“We realise that these essential road closures and diversion routes will have an impact on some people’s working day commutes, and we would like to apologise in advance for any inconvenience this may cause and offer our assurances that we will do everything we can to complete the work as safely and as quickly as possible.”

SSEN is hosting a Public Information Session at Fernhurst Village Hall, Glebe Road, Fernhurst GU27 3EH on Thursday 15 March, between 3pm-7:30pm, where members of the project team will be on hand to answer any questions that the local community may have about this essential work, and explain more about the benefits the 12-month project will bring. Free tea, coffee and biscuits will be provided.

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Record number of UK energy customers switched supplier in February

LONDON (Reuters) – A record number of British energy customers switched supplier in February, data from industry group Energy UK showed on Monday.

* 668,000 customers switched during the month, the highest monthly switching figure recorded, despite February being the shortest month of the year.

* The data comes as Britain’s energy firms are under pressure to reduce bills and as regulator Ofgem prepares to issue a price cap on the most widely used tariffs.

*It also continues last year’s trend when a record 5.5 million customers switched in 2017 up from 4.8 million in 2016, Energy UK said.

*The data does not show exactly which companies gained or lost customers but shows almost half the switches were between large suppliers, while almost a quarter of switches were from larger firms to smaller suppliers.*There are now over 60 energy suppliers in Britain.

*Britain’s big six energy suppliers, controlling around 80 percent of the market are Centrica’s (CNA.L) British Gas, SSE (SSE.L), E.ON (EONGn.DE), EDF Energy (EDF.PA), Innogy’s (IGY.DE) Npower and Iberdrola’s (IBE.MC) Scottish Power.

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OPUS ENERGY OPENS NEW NORTHAMPTON HQ

Opus Energy has officially opened its new headquarters, based in The Lakes Business Park, Northamptonshire, bringing 700 staff under one roof.

The new headquarters is known as Opus Energy House, a refurbished state of the art building which will unify the brand’s four offices in the county.

Complemented by its sites in Cardiff and Oxford, the office houses numerous key business roles, including customer services, operations, IT, HR, sales, renewables and business change.

Nikki Flanders, chief operations officer at Opus Energy, said: “Today marks a key milestone for Opus Energy and I am delighted to officially open our new headquarters.

“The new office is the largest investment in our people to date, built to create an energising environment for our teams.

“We’ve already invested in flexible benefits, free private healthcare and bonus schemes, and now we can also offer our teams a fantastic, state of the art working environment.”

Andrea Leadsom, MP for South Northamptonshire commented: “Opus Energy is one of the region’s leading employers and I am delighted to see investment in local jobs and infrastructure.

“Northampton is the home of small business with the highest concentration of small businesses in the East Midlands.

“Leading firms investing in the area are key to this, and we are delighted to have Opus Energy in the region.”

The refurbishment has seen some innovative additions, including a well-being room and studio to prioritise employee wellness.

Other benefits include a subsidised restaurant, courtyards and a rooftop terrace, as well as plentiful parking, green surroundings, good connections with public transport and a location close to the city centre.

Nikki Flanders concluded: “We embrace our role as an award-winning supplier in the business energy sector and have clear targets to ensure we continue to not only expand but also to continue to support and energise businesses across the country.

“We made this investment to help attract the best talent in customer service, IT, smart metering and energy service, so we can, in turn, continue to provide excellent service to our customers. We’re excited to have moved in!”

Opus Energy is the UK’s sixth biggest business energy supplier, ranking in The Sunday Times Top Track 250 for the last six years, most recently in 6th position.

It employs over 900 people between Northampton, Oxford and Cardiff, and was named one of the Top 100 Best Companies to Work For in 2015 by The Sunday Times.

Opus Energy supplies more than 315,000 business locations across the UK with electricity and gas.

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UK weather latest: National Grid issues ‘gas deficit warning’ over fears supplies could run out due to freezing temperatures

The National Grid has issued a “gas deficit warning” over fears supplies could run out as temperatures plummet across the country.

The operator of the UK’s power network issued the guidance at 5am on Thursday as supply slipped 48 million cubic metres short of demand.

A spokesperson said the notice was a “first stage” warning to say “it’s looking tight”, which will remain in place until 5am on Friday.

What happens if we actually run out of gas?

“National gas demand today is high and due to the extreme weather conditions, there have been gas supply losses overnight,” the operator said in a statement. “At 5.45am this morning we issued a ‘Gas Deficit Warning’ to the market.

“This is an indication to the market that we’d like more gas to be made available to ensure the safe and reliable operation of the national gas network. We are in communication with industry partners and are closely monitoring the situation.”

Ofgem threatens toughest ever blow to energy network profits

The energy regulator has put forward plans for its toughest ever clampdown on energy network profits in a bid to save households £5bn over five years.

In a second major blow to the energy industry ahead of its proposed retail price cap, Ofgem has laid out plans to cut the amount of revenue energy companies such as UK Power Networks, SSE Electricity Networks and Scottish Power’s SP Energy Networks can return to shareholders.

Amid mounting political scrutiny of the sector, focus has turned to the part network costs play in adding to household energy bills.

The operators of Britain’s electricity and gas grids claim around £250 a year from an average annual energy bill of £1,100 to maintain the pipes and wires that deliver energy to 30 million homes.

But under Ofgem’s new plans customers should be able to save between £15 – £25 a year, in what amounts to the regulator’s biggest ever cut to companies’ allowed revenue.

Ofgem will tighten the screw on network profits by slashing the cost of equity, which is paid to shareholders, from a baseline of between 6-7pc under its current regime to between 3-5pc from 2021.

The lower end of the range goes much further than the recommendation of a independent study commissioned by industry body the Energy Networks Association, which called for returns of around 6pc.

Ofgem has argued that energy networks should follow the lead of water companies, which have faced a tighter squeeze on their allowed revenues.

The energy sector is rapidly changing and consumers must be confident they continue to get good value for moneyJonathan Brearly, Ofgem

But the ENA maintains that energy networks face greater technology challenges, which mean their investors require higher returns. New technologies, such as renewable power and smart grids, mean more investment is needed to upgrade the grid. However critics of the network companies believe they are making unfair profits at the expense of customers under Ofgem’s watch.

Official figures show that even with a baseline rate of return of around 6pc network companies have been able to make returns as high as 12pc by clinching rewards for beating their regulatory targets.

Ofgem has also suggested shortening the regulatory control period from eight years to five.

Jonathan Brearly, Ofgem’s networks boss, said the shorter price control would help regulation keep pace with the rapid changes in the energy system.

“The energy sector is rapidly changing and consumers must be confident they continue to get good value for money for the services the networks deliver,” Mr Brearley said.

Network firms’ high profits add £20 to energy bills

Electricity network companies’ exceptionally high profits are set to add £20 to household energy bills this year, despite regulator Ofgem introducing a new regulatory regime designed to control profit margins, a report finds.

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The analysis, from the Energy and Climate Intelligence Unit (ECIU), finds that in the first year of the price control mechanism known as RIIO, the six distribution network operators (DNOs), the firms that operate regional power networks, posted an average profit margin of 30.4%, with average dividends at 13.3%.

If DNOs continue at the same level of profit margins this year, that will make the average annual household electricity bill about £20 higher than if their profits were at a similar level to those of the ‘Big Six’ energy firms. Network costs now make up more than a quarter of the average domestic electricity bill, a share that is set to rise in coming years.

Commenting, Richard Black, director of the ECIU, said that the findings should open up the debate around energy bills.

“Ministers, the press and the public are rightly worried about energy bills, and the news that these monopoly operators are making profits beyond most companies’ wildest dreams will only add to these concerns,” he said.

“We are currently in the middle of what the former head of National Grid has calleda revolution in the way our electricity is produced and supplied. It’s essential therefore that we have an open, honest and transparent debate about the costs of every part of the energy system.”

An ECIU report last year found that DNOs made annual average profit margins of 32% over the previous six years, equating to about £10bn on the nation’s collective energy bill over six years (2010-15), or around £27 per home per year. The DNOs argued that the introduction of RIIO would change this picture: ECIU’s new report suggests that, from the evidence available, RIIO has made no impact on profits or dividends.

These findings add further weight to calls from Citizens Advice for network companies to return excess profits to customers. The 2017 report Missing Billionsshowed that consumers are set to overpay by £7.5 billion during the current RIIO period.

Commenting on the report, John Penrose, MP for Weston-super-Mare, said:

“Ofgem has admitted it was asleep at the wheel on energy price caps.  Now it has a chance to do better by using its powers to take on the monopoly Distribution Network Operators (DNOs) which own the power lines that get energy to our homes.

“The DNOs are low risk, monopoly businesses. But they have even fatter profit margins than the Big 6 energy firms, all paid out of the pockets of hard-working energy customers. 

“If Ofgem lets them go on getting fat at energy bill-payers’ expense, it should be scrapped and replaced with a proper cross-sector regulator that isn’t afraid to use its teeth.”

Prof Catherine Mitchell, Professor of Energy Policy at the University of Exeter, highlighted the ‘vital role’ that DNOs have:

“DNOs have a vital role in the transition to the energy systems of the future, connecting and managing the distributed, democratised, low-carbon network to ensure that consumers can benefit from the plummeting costs of renewables. However, whilst many of the firms deserve credit for their work in promoting the transition to smart power networks, Ofgem’s failure to corral companies in the right direction – with these high profit margins appearing instead – places the shift to a modern, flexible grid at risk,” she said.

“Overall annual benefits from this switch to smart grids have been calculated to be as high as £8 billion for the UK. This is on top of cleaner air, reduced dependency on fossil fuel imports and a reduced need to push through technologies that the public doesn’t want, such as fracking. This report again highlights the urgency of the challenge facing Ofgem and the DNO companies, and has rightly resulted in fresh calls to tighten up the ship.”

The report, RIIO Carnival: How new Ofgem regulations are failing to hit high network company profits, is available here.

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Energy price cap ‘could be gamed’, warns regulator

The Government’s crackdown on rising energy bills could be gamed by suppliers offering pricier ‘green’ tariffs via a legislative loophole, the industry regulator has warned.

Ofgem warned MPs that its plan to cap standard energy tariffs could be undone if energy companies are able to claim their tariffs carry green credentials in order to charge more for their electricity and gas.

Ministers are preparing to legislate a market-wide cap on all default tariffs in a bid to end “rip-off” energy deals, but low-carbon offerings will not face the same clampdown because costs for green energy are higher.

The potential escape clause has emerged almost a year before the controversial price cap, which many fear could bring a raft of other unintended consequences including lower consumer engagement with the market and reduced competition.

Dermot Nolan, Ofgem’s chief executive, told a parliamentary select committee on Wednesday that customers switching between tariffs could fall under a price cap but said that the switching rate alone would not determine whether the market is working for consumers.

He later admitted that the regulator has not sought the opinion of consumers on the price cap plans but would agree to undertake a survey before it is implemented.

In the meantime, Mr Nolan called for tougher wording in the bill to make clear that companies cannot dodge the cap by making spurious green claims about the energy it supplies.

He added that Ofgem was prepared to issue pre-emptive warnings to companies which may be tempted to exploit the loophole.

“I am saying that loudly and clearly,” he said. “Commercial companies will generally try to make money. To assume they won’t is probably unwise. We will police this as intensively as possible.”

Mr Dermot, who has led the regulator for four years, faced a barrage of questions from the committee over his tenure at the helm and denied that he has acted as a passive bystander to the growing concerns over energy bills.

He added that he had not been awarded a bonus for 2017 and apologised for not acting sooner to bring in the new energy cap for vulnerable customers.

He also promised that any supplier found to be wrongfully using the green-tariff exemption to charge customers above the price cap would be forced to withdraw the deal immediately and repay the excess charges on top of a penalty determined by the regulator’s specialist panel of disciplinarians.

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UK energy price cap could come into effect by Christmas 2018, Ofgem says

Energy bills have doubled in Britain over the past decade to an average of about £1,200 a year

Energy regulator Ofgem has said that a plan to cap standard variable energy tariffs for millions of British households could be in place by Christmas this year.

In October, Prime Minister Theresa May  pledged to introduce legislation to end “rip-off” energy prices by putting a price cap on bills.

Speaking to a parliamentary select committee on Wednesday, Ofgem chief executive Dermot Nolan said that for a cap on energy bills to come into force by the end of the year it would need to become law before politicians and lords break up for the summer recess in July.

Once that law is passed, Ofgem will need to launch a statutory consultation process of around 50 to 60 days, after which energy suppliers will be given a further grace period to implement the necessary measures.

The Business, Energy and Industrial Strategy Committee was questioning Mr Nolan as part of its pre-legislative scrutiny of the Government’s draft bill to cap energy prices.

Annual energy bills in Britain have reportedly doubled over the last decade, rising by about £1,200 per household.

Figures from Ofgem show that 57 per cent of households – or around 13 million – are on standard variable rate tariffs which are typically the most expensive. They are the basic rate that energy suppliers charge if a customer does not opt for a specific fixed-term deal.

Mr Nolan said that vulnerable customers had been failed by the system and admitted that Ofgem should have done more to help them earlier.

“I accept we should have done better with vulnerable customers,” he said.

Committee chairwoman Rachel Reeves accused Mr Nolan of acting “like a bystander rather than an active participant in the market” and challenged him over Ofgem staff bonuses which reportedly totalled £921,000 for the 2015/2016 tax year.

“Your role is not to hope that next year fewer people are paying more than they should be on standard variable tariffs, but to stop this exploitation of customers,” she said.

Mr Nolan said that bonuses were calculated according to civil service guidelines.

Ofgem confirmed to The Independent that Mr Nolan and other members of the executive board did not receive a bonus for the 2016/17 tax year.

Ofgem is introducing a safeguard tariff in February that will help protect around a million vulnerable customers from overpaying on their energy bills. The regulator has said that it plans to extend the scheme to two million more households next winter.

Data also published by Ofgem in December showed that among Britain’s “Big Six” energy suppliers, SSE had the largest percentage of customers on SVTs at 71 per cent.

British Gas, owned by Centrica, had 67 per cent of its customers on SVTs and E.ON had 61 per cent.

The country’s other three main suppliers are EDF Energy, Innogy’s Npower and Iberdrola’s Scottish Power.

Additional reporting by Reuters