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Centrica launches new Energy as a Service bundle to help businesses build back better

Centrica Business Solutions (CBS) has launched a new Energy as a Service bundle, specifically for those that are looking to make an investment in energy saving technologies.

The capital-free energy generation product is designed to help businesses ‘build back better’ in response to COVID-19.

It will offer a bundle to companies that includes the design, installation and financing of on-site power generation, helping them to decarbonise and reduce their energy bills without the upfront capital expenditure of equipment.

Typically, this would see CBS installing on-site generation technology such as Combined Heat and Power units for a customer, which it will then manage as well as providing any top up electricity or gas needed. The business repays the cost of the technology through the energy savings across the length of the contract.

Additional savings will be made through the use of the generation technologies in wholesale and demand response markets, said CBS.

According to the company, by choosing the bundle, savings can be made in the short term that can then be used to support more long term carbon cutting measures, such as the installation of PV panels or enabling electric vehicles.

“For many organisations, the last few months have been extremely challenging and so reducing costs and improving business resilience will be critical to recovery,” said Alan Barlow, director of UK & Ireland for CBS.

“By helping with the upfront investment in energy solutions, we can support them towards improved energy security and cost savings. Our aim is to support customers who wish to Build Back Better, by transitioning to a sustainable future without the need for significant capital.”

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EDF preparing cost-cutting plan worth up to three billion euros: sources

PARIS (Reuters) – French state-controlled utility EDF (EDF.PA) has started preparing a cost-cutting plan worth between 2 and 3 billion euros ($1.13 billion), two sources told Reuters, confirming a report by French newspaper Le Monde.

The savings plan could entail divestments of major assets or a hiring and investment freeze, while seeking cost cuts at all levels, Le Monde said on Monday.

An EDF spokesman told Reuters there was a savings plan in the works, but said it was too early to provide details.

EDF, which operates all of France’s 57 nuclear reactors that account for around 70% of the country’s electricity needs, earlier withdrew its financial targets for 2020 and 2021 as the fallout from the coronavirus outbreak hit key areas of its businesses.

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BP and Shell Write-Off Billions in Assets, Citing Covid-19 and Climate Change

The moves were seen as a possible turning point as plummeting demand makes big oil companies admit they’re not worth what they used to be.

Two of the world’s largest energy companies have sent their strongest signals yet that the coronavirus pandemic may accelerate a global transition away from oil, and that billions of dollars invested in fossil fuel assets could go to waste.

This week, Royal Dutch Shell said it would slash the value of its oil and gas assets by up to $22  billion amid a crash in oil prices. The announcement came two weeks after a similar declaration by BP, saying it would reduce the value of its assets by up to $17.5 billion. Both companies said the accounting moves were a response not only to the coronavirus-driven recession, but also to global efforts to tackle climate change.

Some analysts say the global oil and gas industry is undergoing a fundamental transformation and is finally being forced to reckon with a future of dwindling demand for its products.

“I think we may look back on this as the turning point, the moment the industry finally started to say that real assets with real dollar figures associated with them are likely to be ‘stranded'”—or left undeveloped—”in a decarbonizing world,” said Andrew Logan, senior director of oil and gas at Ceres, a sustainable business advocacy group that has represented major investors in their engagement with oil companies. “This is a huge turnaround from the industry’s previous stance, which had been that no existing assets were likely to be stranded, that there may be risks in the future, but not in the here and now. That acknowledgment, that the risk is real and it’s here in the present, is a really big deal.”

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Good Energy sees ‘first signs’ of pick-up in demand; underlying profit meets expectations

Renewable electricity supplier Good Energy reported that underlying profitability in the year to date had been in line with management’s expectations and said it had started to see the ‘first signs’ of pick-up in demand. A range of ‘planned efficiencies and management initiatives,’ offset the short-term gross margin impact resulting from wholesale energy price reductions, leading to an underlying profit performance in line with the board’s expectations, the company said. Good Energy also said it was starting to see the first signs of increased demand pick up in some half hourly business segments, following weakness in prior months. ‘Overall demand within the energy supply segment remained lower in June, in line with April and May, with an increase in domestic supply largely offset by a decrease in SME volumes, with half hourly business volumes also remaining below normal,’ it added.

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Almost 40% of households report increase in utility bills since Covid-19 began

Almost 60% of Britons say the overall cost of life has increased during the pandemic, according to a new survey

Almost 39% of people globally say their utility bills, including water, electricity, heating, air conditioning, phone, internet and TV services, have increased since the Covid-19 pandemic began.

This is just one of the findings of the latest global Ipsos survey, which shows a majority of people in 26 countries say the costs of food, goods and services have increased since the coronavirus outbreak started.

Almost 60% of the respondents in the UK believe the overall cost of living has increased during the pandemic.

By region, 75% of people in Latin America were most likely to say costs have risen, followed by 72% of those in the Middle East and Africa – more than a third also said transportation and fuel costs had decreased, as a possible consequence of less travel and lockdown restrictions.

Around 56% of people in Turkey said costs have risen, followed by 52% of Malaysians, 51% of Britons and 50% of Canadians.

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‘A false start’: Green groups express disappointment in Boris Johnson’s ‘New Deal’ recovery package

Key members of the UK’s green economy have been offering their thoughts on Prime Minister Boris Johnson’s Covid-19 recovery package, the fundamentals of which have now been unveiled. The general feeling is one of dismay, following months of campaigning.

In a speech delivered in the West Midlands this morning, Johnson unveiled an initial £5bn for infrastructure and skills projects across the UK. He vowed to “build, build, build” and bring about a “New Deal” for the nation, in which the rebound from the economic crisis borne of the Covid-19 pandemic addresses key social issues.

But the New Deal is far from “Green”, key NGOs, think-tanks, trade bodies and thought leaders are warning.

Johnson has received a string of policy briefings and open letters in recent weeks, urging him to align the recovery package with the UK’s net-zero target and to prioritise funding for sectors spurring the low-carbon transition or working to protect nature. He and Chancellor Rishi Sunak have repeatedly assured the authors of such documents, as well as MPs, journalists and the general public, that policies to boost the manufacture of low-carbon goods and to decarbonise the nation’s most-emitting sectors would form a “vital” part of the Government’s recovery strategy.

Now, key figures are accusing Johnson and Sunak of overstating their “green” commitments and calling for better environmental provisions to be unveiled by the Treasury next month.

Here, edie rounds up the key concerns which the package has raised across the UK’s green economy.

Poor provisions for retrofitting

Buildings account for around 40% of global emissions and one-third of energy use in the UK and, while improved standards for new housing and business properties are forthcoming, the UK Government has repeatedly been accused of failing to support the decarbonisation of existing stock.

The Department for Education has this week outlined a £1bn package to retrofit schools, but Students Organising for Sustainability claims that £23bn would be necessary to ensure that all schools are net-zero by 2030.

More broadly, the Conservative Party had pledged £9.2bn for retrofitting in its 2019 general election manifesto – a figure which groups including the Sustainable Energy Association and Association for Distributed Energy (ADE) were keen to see come to fruition in the recovery package.

“Investing in a national buildings renovation programme will support local jobs and SMEs right now and will be an important part of the UK’s green economic recovery,” the ADE’s head of external affairs Lucy Symons-Jones said. “The £9.2bn promised in the Conservative Party manifesto will support the engineers and installers who are ready to deliver an immediate national building retrofit programme. Without this funding, these local skilled workers face redundancy.”

The EEIG has also expressed disappointment in the lack of energy efficiency provisions in Johnson’s speech. The body’s previous research claimed that 40,000 jobs could be created in the UK within 24 months, through an ambitious retrofitting programme, with a further 110,000 roles created through to 2030.

“Energy efficiency [is] perhaps the most urgent of all infrastructure priorities,” UKGBC chief executive Julie Hirogoyen added. “[It[ can create jobs right around the country, improve health and reduce costs to NHS, and increase consumer spending power by lowering energy bills.” 

A lack of movement on heat and flexible energy

11 months ago, Citizens Advice warned that the Government’s failure to implement a “credible” framework for the decarbonisation of heat for commercial and domestic use could undermine public confidence in the net-zero transition.

BEIS has since faced repeated calls to accelerate the development of a national heat strategy, particularly since Covid-19 was declared a pandemic.

While the Department announced a £25m pot for heat pumps this week, such a strategy still seems not to be forthcoming. Moreover, Johnson’s speech made no specific reference to heat.

Businesses including Flexitricity, SE2 and Lux Nova have warned that the UK is missing an opportunity here, not only to decarbonise, but to improve wellbeing and to reduce NHS costs.

Poor clarity on skills

Up to 2.2 million Brits could face unemployment unless the UK’s Covid-19 recovery package contains measures to reskill them for “green-collar” roles, Mayors and council leaders representing 25 million residents warned yesterday (29 June).

Calls for increased skills measures have also been made by the likes of National Grid, Oxford University academics and The Energy Transitions Commission – a body representing 40 global organisations including major employers like Heathrow Airport, BP and HSBC.

The UK Government was reportedly set to launch a dedicated fund for reskilling Brits to work in the renewable energy, cleantech and built environment sectors, coupled with additional investment in these sectors to assist with their expansion. The Conservative Party is notably targeting two million “green-collar” jobs in the UK by 2030.

While Johnson did make passing reference to skills in his speech, any green strings were notably absent.

“Jobs, skills and infrastructure are core to the UK’s green recovery,” the Energy Networks Association’s chief executive David Smith said. “Building ahead of need so that electric vehicles can be rolled out at pace, gas can be greened and industry can be decarbonised, creating the green collar jobs that will keep the UK at the front of the fight against climate change.”

“The Prime Minister’s speech rightly identifies the importance of ‘building back greener’ but this has to be rapidly backed up by support for shovel-ready projects and policy decisions that are aligned with the UK’s climate, environmental and clean growth goals,” Aldersgate Group director Nick Molho added. “Such an approach is not just needed to meet the UK’s environmental ambitions, but it is also essential to ensure that the UK’s recovery plan can address key public interest concerns around unemployment, regional inequality and resilience.”

Continued investment in high-carbon sectors

“A real Green New Deal wouldn’t just mean more spending on infrastructure,” campaign group Green New Deal UK tweeted during Johnson’s speech in Dudley. “It would mean a rewiring of the British economy to be climate-resilient, it would mean a pay rise for key workers – and it would mean spending enough money to meet the challenges in front of us.”

The tweet is alluding to the fact that the package contains a £100m pot for road building programmes, in addition to the £27bn promised in the 2020 Budget. Moreover, “green strings” relating to the package’s funding, either in full or in part, are yet to be confirmed.

In contrast, the  European Union has ringfenced 25% of its €750bn fund to help the bloc recover from the coronavirus crisis to mitigating the climate crisis.

“Johnson’s plan to ‘build, build, build’ includes a massive road-building programme and a deeply alarming deregulation of the housing market,” Scottish Green Party co-leader Patrick Harvie said.  “Both of these could cause enormous environmental damage, as well as increasing emissions.”

“Boris Johnson’s speech should have fired the starting gun on a healthier, more resilient future for the UK,” Green Alliance’s executive director Shaun Spiers said.

“Unfortunately, the PM seems to have got off to false start. This statement today is about putting shovels in the ground, but there is no point in that in the long term if it digs the UK deeper into trouble…Let’s hope the Chancellor is listening and ups the government’s game next week – putting people, climate and nature front and centre of the government’s recovery strategy.”

“To avoid catastrophe, we need a low-carbon nature-powered recovery, not one weighed down by tarmac and concrete,” WWF UK’s chief executive Tanya Steele added. “This is another missed opportunity – and we don’t have many chances left.”

Nature hanging in the balance 

On the “nature-powered” aspect, it is worth noting that a recommitment to reforest parts of the country by planting more than 75,000 acres of trees every year by 2025 has been made. A £40m fund to boost local conservation projects has also been announced, and is expected to create around 3,000 jobs while safeguarding 2,000 existing jobs.

Nonetheless, Johnson also said he would be willing to remove wildlife that presents an obstacle to building work on key infrastructure projects. 

“An economic recovery which puts investment in nature first would reap big dividends in tackling climate crisis – helping to absorb up to a third of UK emissions – as well as tackling health inequalities, and providing more jobs, skills and opportunities to support the next generation,” the Wildlife Trusts’ chief executive Craig Bennett said. 

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Energy UK asks government to enable payment holiday scheme

UK energy companies are asking the government to support a £100m loan scheme that will enable businesses and households affected by the Covid-19 coronavirus pandemic to take a payment holiday.

As reported by the Financial Times, energy industry trade body Energy UK has allegedly consulted with the UK Government to set up the programme, as the number of people cancelling their direct debit plans increases.

An Energy UK spokesperson said: “We have been in contact with the Government, Ofgem and Citizens Advice on what actions, protections and practical steps suppliers can take to support customers during these challenging times. Suppliers will be doing all they can to identify customers in vulnerable circumstances and provide support where possible on a case-by-case basis.

“On behalf of the industry, we have been also having discussions with the Government to explore if any additional financial support could be required to help these customers over the coming months.”

The plan would be for the government to lend money to energy suppliers that will repay once customers resume their payment plans.

The UK Government had already put in place a set of financial measures to help the economy during the pandemic, unveiling on 17 March its plan to give out £330bn in loans to businesses.

As reported by the Financial Times, the Department for Business, Energy and Industrial Strategy said: “We have been clear we will do whatever it takes to get us through this pandemic and have put in place an unprecedented package of support for businesses, including £330bn of loans and guarantees and paying 80 per cent of the wages of furloughed workers.

“We continue to engage with the energy sector to understand how suppliers and their customers could be further supported.”

The energy sector has already set up contingency plans to help customers during the pandemic.

Energy UK chief executive Audrey Gallagher said: “The sector is very conscious of the potential consequences for customers confined to their homes for prolonged periods.

“In particular, customers in vulnerable circumstances and those on prepayment meters may need additional help and support with repayments or keeping meters topped up.”

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Eon lost HALF A MILLION customers in 2019 as households continue to switch away from the Big Six energy suppliers

Eon lost 500,000 customers in Britain last year with its profits also taking a bashing thanks to the energy price cap, its results revealed today.

The Big Six supplier, which is German-owned, is likely to have lost customers as a result of more households switching providers than ever before – with many moving away from the largest suppliers. 

The price cap will also have had an effect as suppliers are only allowed to charge a maximum of £1,162 for standard variable tariff customers.

Despite losing customers, Eon said its total earnings before tax and interest increased to £2.9billion in 2019, and it expects earnings to increase again in 2020.

However, it admitted it hadn’t factored in the current downturn in the economy amid coronavirus fears, adding that it has seen customers across Europe consuming less energy as a result of the pandemic. 

Johannes Teyssen, Eon chief executive, said: ‘Industrial and commercial customers are consuming noticeably less energy. 

‘This will have a temporary impact on our network and sales businesses. There may be delays in our ability to deliver energy infrastructure projects.

He added: ‘Energy utilities have a special significance for critical infrastructure in this crisis and thus a special responsibility. 

‘We will do everything in our power to ensure supply security, even in this situation.’

It said the energy sector ‘won’t be as hard hit by other industries’ but will still feel an impact from the pandemic. 

During the coronavirus outbreak, Eon confirmed that it will not disconnect financially vulnerable customers from its network to ensure continued supply. 

It added that its core business saw operating arms post ‘solid earnings’ last year, although customer solutions saw earnings slip by £90.9million due to price caps and the fall in UK accounts. 

Victoria Arrington at Energy Helpline said: ‘The Big Six has been losing customers for some time – so Eon’s loss of 500,000 UK accounts in 2019 is no big surprise. 

‘Established suppliers are facing intense battles in an ever-changing industry for customer loyalty.

‘The marketplace is becoming more and more competitive. Customers are switching at record rates – and it’s unsurprising, since there are so many bargain tariffs appearing all the time. 

‘That said, Eon clearly recognises that customers crave savings, with their best tariff deal is £318 cheaper than their default tariff.

‘With so many cheap tariffs available, it’s clear that complacency can be costly. 

‘Customers who switch supplier could save up to £378 a year on energy, with the average customer saving £280 annually – so it pays to shop around.

‘Eon has made some intriguing moves recently – from putting all of their customers on to renewable energy, to taking on the customer base of npower. 

‘It will continue to be interesting to see what new developments they bring to the industry.’ 

During the coronavirus outbreak, the Government and energy suppliers have teamed up to put emergency measures in place.

This includes ensuring that prepayment and pay as you go customers who cannot leave home can speak to their provider about staying supplied, steps that should benefit over four million households. 

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Millions of households set for energy bill break due to coronavirus crisis

But commuters who usually travel to work using rail season tickets could find themselves out of pocket because of ‘completely unfair’ rules

Millions of households could be given a break from energy bills as a growing number of companies have sent employees home amid the coronavirus crisis, The Telegraph can reveal.

EDF Energy, which has five million customers and is one of the biggest utility firms in the country, said it would consider offering delayed payments to anyone who is affected by the outbreak.

The news comes after the Government warned that as many as a fifth of employees could be off work at the same time, disrupting regular travel plans and increasing power use.

Consumer experts hit out at rail firms for only offering partial refunds to those who are told to work from home as offices across the country sit empty.

High street banks have already offered mortgage repayment holidays to affected customers as the financial toll of the crisis worsens.

The Telegraph understands that energy bosses are in regular communication with the Government and regulators to determine how best to support customers who may run into financial difficulty.

A spokesman for EDF said: “We recognise that over the coming weeks Covid-19 may have an impact on our customers, and we are prepared to offer these customers additional support and flexibility.

“Each case would be looked at on an individual basis, but additional support we could offer may include repayments made over a longer period of time, delay payment for a short period or offer alternative payment arrangements.”

Government advice is that anyone with persistent coronavirus symptoms should remain isolated for seven days.

Those who usually travel to work using a rail season ticket could find themselves out of pocket because of rules blasted as “completely unfair” by a consumer group.

Martyn James, from consumer complaints service Resolver, said the rules could mean many commuters lose out simply for following their company’s advice.

Customers can ask for money back, but they will not receive the full unused value of their and will have to pay an administration fee.

Those who have used the majority of their ticket would not be entitled to a refund.

Mr James said the period used to calculate the refund is arbitrary and may not reflect price variations over the year.

A weekly ticket from Brighton to London costs around £105 while a day return ticket can cost £44.

That means someone returning their ticket after four days of use would receive nothing back.

Customers are also charged an administration fee of up to £10.

Commuters can temporarily “suspend” their season ticket if they are ill. They will be refunded for the time for which they were unable to use it.

To receive their money back customers must supply a medical certificate.

Transport for London, which runs the London Underground, said it is waiving its £5 administration fee for those who need to self-isolate.

A spokesperson for the Rail Delivery Group, a trade body, said rail firms understand these are “exceptional times” and that travellers should check their entitlement with National Rail Enquiries.

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Decrease to SSE Airtricity Gas Supply’s tariff welcomed by Utility Regulator

The Utility Regulator has welcomed SSE Airtricity Gas Supply’s announcement that it will be reducing its regulated gas tariff in the Greater Belfast area by 18.7% from the 1 April 2020.

Jenny Pyper, Chief Executive of the Utility Regulator said:

“I am delighted to welcome SSE Airtricity Gas Supply’s reduction of 18.7%, which is great news for their domestic and small business customers[i] in the Greater Belfast area. The key driver for this tariff change is the significant decrease in wholesale gas costs. There is also an over recovery from the current tariff period that is being returned to customers in this new tariff.

“We started this tariff review process in February 2020, which included a thorough analysis of all SSE Airtricity Gas Supply cost elements. Their customers can therefore be confident, that due to our regulation, their bills reflect the actual costs of supplying gas to their homes and businesses.

“This reduction brings SSE Airtricity’s prices to below where they were in 2017 and will result in a saving of around £108 a year for their customers. This new tariff will continue to be the lowest in the UK and RoI. The new tariff will be 12% lower that the GB price cap average and 36% cheaper than the Bord Gais standard tariff in RoI.

“As always, we will continue to look ahead and monitor SSE Airtricity Gas Supply’s cost elements and should any movements require a tariff change, we will act as soon as possible to ensure this is reflected in customer bills.

“In relation to electricity, we have begun a review with Power NI regarding their domestic regulated tariffs and expect an announcement in the coming months. Whilst we can’t pre-empt the outcome, given the falls being seen in wholesale prices, I would be hopeful of a positive outcome for electricity consumers before the summer.”

The tariff decrease will come into effect from 1 April 2020. Today’s announcement follows the ongoing tariff review process that is carried out by SSE Airtricity Gas Supply and the Utility Regulator, in consultation with the Department for the Economy and the Consumer Council for Northern Ireland.

briefing paper is also available.

ENDS

Notes to editor

  • For further information, please contact Adele Boyle on 028 9031 6664 or 07787 279584.
  • The Utility Regulator is the independent non-ministerial government department responsible for regulating the electricity and gas industries and water and sewerage services in Northern Ireland.
  • This tariff review commenced in February 2020 and covers around 166,000 customers in the Greater Belfast area. The review also covers customers in the Gas to the West area where a number of customers are connected.  
  • The average domestic customer will see their bills decrease by around £108 per year and the average bill will fall to around £468 per year.
  • The SSE Airtricity Gas Supply standard tariff is 12% lower than the average of the GB price cap.  Both have VAT rates of 5%.
  • The SSE Airtricity Gas Supply standard tariff is 36% lower than the Bord Gais standard gas tariff in the RoI. This includes VAT at 13.5% in RoI and 5% in NI.
  • The Greater Belfast area covers: South, West, East and North Belfast; Carrickfergus; Newtownabbey; Duncrue and Harbour; Lisburn; Carryduff; Castlereagh; Ballygowan; Newtownards; Larne; and North Down.

[i] Business customers using less than 73,200 kWh per year.