British Gas in hot water over meters

Britain’s biggest energy supplier has been rebuked by the regulator for forcibly installing an unusually high number of pre-payment meters in homes.

British Gas obtained court warrants to install meters in the homes of about twice as many newly indebted customers as the industry average, Ofgem said.

The regulator said that the tactics were being used “too often” and that suppliers must use forcible installations only as a “last resort”.

Pre-payment meters have to be fed via keys or tokens topped up in shops and post offices before the customer can use gas or electricity. People using them are among the most vulnerable.

Some customers agree to have them installed to help them to manage their payments but suppliers can go to court to install them against their wishes.

British Gas, which is part of Centrica, has about 8 million household customers in the UK. Last year it obtained court warrants for 41,614 pre-payment meter installations, Ofgem figures show, 26 per cent more than in 2016. It accounted for almost half of all such installations across the industry, which rose to 84,230, from 80,594 in 2016.

Although British Gas is the largest supplier, Ofgem said that its installation rate was disproportionately high and it had installed meters in the homes of newly indebted customers at about twice the industry average rate.

Ofgem also highlighted high installation rates of Utility Warehouse, at about five times the industry average, and Ovo Energy, at about a third higher than the industry average, but said that their rates had improved since 2016.

A British Gas spokesman said: “Warrants are only ever issued as a last resort and we have seen a decrease in the numbers carried out this year.”


SSE hits 2.4 million customers with gas and electricity bill hike

SSE will hit around 2.4 million customers with energy bill hikes in July, making it the latest big supplier to raise gas and electricity prices.

Households supplied by the company will see bills rise by an average of £76 per year, or 6.7 per cent for those on a dual fuel tariff.

Gas prices will jump 5.7 per cent while electricity will increase by 7.7 per cent on 11 July.

This will equate to an average rise of around £1.50 a week for customers buying both gas and electricity.

The increases are significantly above both inflation and the pace of wage growth, meaning a further squeeze for households.

Stephen Forbes, chief commercial officer of SSE Energy Services, said: “We deeply regret having to raise prices and have worked hard to withstand the increasing costs that are largely outside our control by reducing our own internal costs.

“However, as we’ve seen with recent adjustments to Ofgem’s price caps, the cost of supplying energy is increasing and this ultimately impacts the prices we’re able to offer customers.”

The move from SSE comes after all the other five of the big six suppliers increased prices in recent months.

Npower announced in April that it would increase the cost of its average energy bill by 5.3 per cent,

That came after Labour’s shadow cabinet office minister, Jon Trickett, accused British Gas of delivering a “slap in the face” to customers with its own 5.5 per cent hike.

Earlier this month, E.On reported a 41 per cent rise in profits, just weeks after slapping households with price rises.

In total, around nine million households will see bills rise over the summer, with the average dual fuel tariff now costing £100 per month, according to Money Saving Expert (MSE).

MSE founder Martin Lewis accused the big energy firms of acting like sheep by all raising prices in quick succession.

“Npower is the worst offender, charging someone with typical use £1,230 a year – well over £100 a month,” Mr Lewis said.

“Eon has the least-worst of the big six standard tariffs at £1,153. Yet even that is massively over the odds.

“Anyone on a big six standard tariff is ripping themselves off by failing to take action. Do-nothings pay massively more than the do-somethings.

“Switch firm and you could cut bills to almost £800 a year, even with the same usage.

“And even if for some reason you’re loyal to your current provider, almost all big six suppliers have alternative tariffs over £100 a year cheaper than their standard deals. However, they operate ‘don’t ask, don’t get’ policies. So at the very least, ask!”

No Brexit for energy as UK set to draw more power from EU

As the U.K. government works to exit the European Union, the nation’s electric utilities are working to get closer.

Power already flows between the U.K., France, Ireland and Northern Ireland through four interconnector cables, and work is under way to more than quadruple the capacity of those links. The cables, detailed in the chart below, will establish a stronger physical tie with the continent regardless of what politicians decide on Brexit.

The investments mark a contrast with Prime Minister Theresa May’s effort to make the U.K. more independent of its continental neighbors. Building more power cables between nations will bind Britain’s electricity market closer to those of continental Europe. That will benefit both Britain and Europe, giving grid managers everywhere additional flexibility to respond to shocks and the system and to buy the cheapest power.


The Brexit process may undermine the economic and logistical case for using interconnectors. To maintain flows after April 1, the U.K. must agree to remain part of the EU internal energy market. That must be written into Britain’s agreement with the EU to exit the union, and that hasn’t happened so far. What happens to electricity if there’s a no-deal hard Brexit would add so much friction to the system that utilities think it’s unthinkable.

For two decades, energy interconnectors have become more common throughout Europe as the union sought to build a single market in energy. The U.K. has been a major proponent in that process—and a big beneficiary.

For an island nation like Britain, links are a helpful source of cheap electricity and flexibility for grid managers, who would otherwise have to rely on utilities building costly generation plants. They give another source of electricity at peak times, like the cold winter days when there’s high demand for heating.

Whether the U.K. can still rely its neighbors for energy at times of stress depends on the the U.K.’s energy relationship with the EU after Brexit. Those matters haven’t had much discussion yet. Policy makers have focused on other issues like the nature of the border with Ireland. Some analysts are warning greater dependence on the EU leaves Britain’s grid vulnerable.

“If rules governing the flows of electricity and gas around Europe are set outside the influence of the U.K., that could change how comfortable we are relying on imports,” Neil Cornelius, managing director at the Berkeley Research Group LLC said.

At the moment, the biggest link Britain has is with France, which exports excess power from its network of nuclear power plants. Despite Brexit, the energy industry is forging ahead with plans to build 11 more interconnectors bringing total capacity to almost 18 gigawatts—more than a third of current peak demand.

Not all of these projects are likely to get built, since EU funding for some of them may disappear with Brexit, according to John Feddersen, chief executive of Aurora Energy Research Ltd. And if Britain is treated as a third country outside the EU, that could reduce the willingness some nations have in supplying power to the U.K. in an emergency.

“Irrespective of Brexit, if the lights are about to go out in France, they wouldn’t be sending us power anyway,” he said.

Interconnectors improve security of electricity supply and help to reduce bills for consumers. They provide flexibility for grid managers, like power to back up intermittent flows from renewables such as solar and wind farms, the U.K. Department of Business, Energy and Industrial Strategy says.

The projects in development are expected to cut bills by as much as 20 billion pounds ($26.6 billion), the government estimates.

“An alternative to interconnectors would be to develop additional generation at home, and potentially gas storage,” Cornelius said. “These would enhance supply security. But there are obviously costs associated with this.”


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.


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.



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.


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.

Pylons no-attribution-needed public-domain

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.