Business Breakfast RECAP: £840m Network grid upgrade for Hinkley Point can be cheaper, says Ofgem

Good morning and welcome to the Business Breakfast live blog for Wednesday, August 30.

I’m Jonathon Manning and I’m running the live blog this week, to bring you updates on all the breaking business news from across the North East and beyond.

This live blog covers the latest big stories from the North East business community as well as national news and FTSE announcements – anything and everything from the world of business basically.

Britain’s energy regulator has raised major questions about the £840m cost of a network grid upgrade that is being used to connect Hinkley Point nuclear power station.

Ofgem said today that it is challenging around 20% of National Grid’s proposed costs, in particularly those relation to the treatment of how severe weather could delay construction.

And struggling tool supplier HSS Hire has seen its half-year losses nearly quadruple to £30m, up from £7.8m a year earlier. The results cover the six months ending July 1 2017,

The company said its recovery plan had helped return the group to profit in June and increased revenue in its rental division. However progress had been “materially slower” than expected.


Over eight million families charged £853 extra for energy

UK households have forked out an extra £7.3 billion over the last five years by remaining customers of the Big Six energy firms, a new report shows.

Ofgem data compiled by energy provider Bulb found that families who held accounts with the biggest firms – including British Gas, SSE, E.ON, Npower, EDF and Scottish Power – for at least five years paid out an average £853 more than they needed to over the period

The report explained that while Big Six firms tend to offer cheaper fixed tariffs in order to “entice” new customers, those tariffs tend to expire within one to two years.

At that point customers are usually transferred to standard variable tariffs, which cost up to 30% more than their original plan.

The report went on to calculate the so-called “loyalty fee”, which measures the annual price difference between the average standard variable tariff at a Big Six firm compared to their cheapest tariff.

It found that the average loyalty fee for a UK household was £852.75 over five years – with an astonishing 8.5million British homes staying with one of the Big Six firms and not switching.

Bulb co-founder Hayden Wood said: “Loyalty towards a brand is often rewarded, yet households who’ve put their trust for years in a single energy company are being forced to subsidise others who switch every 12 months.”

He added: “These latest numbers show that so-called standard tariffs no longer have the customers’ best interests at heart. The Big Six need to show that they’re putting customers first, instead of profits.”

A recent poll by uSwitch found a third of Brits are already concerned about paying their energy bills this winter and more than half are struggling with their household finances.

British Gas became the latest Big Six energy supplier to hike prices at the start of August, when it confirmed that it was ramping up the cost of electricity by 12.5% for 3.1 million customers, despite falling wholesale prices.

The company had promised in December that it would freeze tariffs until summer 2017, while rivals including Scottish Power, E.ON and EDF raised their own bills near the start of the year.

Competitor SSE raised dual fuel prices by 6.9% in April, while Npower came under fire in February amid plans to hike gas and electricity prices by 9.8% – a move that added £109 to annual dual fuel bills.


Solar panel capacity to overtake nuclear energy next year in historic landmark

Solar panel capacity is set to overtake nuclear worldwide for the first time within the next few months, according to expert predictions.

The total capacity of nuclear power is currently about 391.5 gigawatts but the total capacity of photovoltaic cells is expected to hit 390 gigawatts by the end of this year with demand growing at up to eight per cent per year, according to GTM Research.

While this would be a landmark moment for renewable energy, nuclear still generates much more electricity than solar – nearly 2.5 million gigawatt-hours a year compared to the latter’s 375,000 gigawatt-hours

Stephen Lacey, writing on GTM’s website, said: “It’s still going to be a record-breaking year for new solar capacity additions – yet again.

“The 81 gigawatts expected this year are more than double the amount of solar capacity installed in 2014. And it’s 32 times more solar deployed a decade ago. (In the year 2000, global installations totaled 150 megawatts.)

“One of the most telling statistics: By 2022, global capacity will likely reach 871 gigawatts. That’s about 43 gigawatts more than expected cumulative wind installs by that date. And it’s more than double today’s nuclear capacity.”

While solar accounts for about 1.8 per cent of global electricity generation today, the International Energy Agency has predicted this could rise to 16 per cent by 2050 under a “high-growth scenario”, which would make it the largest source of energy in the world.

And Mr Lacy said: “In the last three years, growth rates and cost reductions for solar have far exceeded projections. Meanwhile, high costs, slow construction and competitive renewable alternatives are causing the global nuclear industry to falter.

“The trend lines are becoming clearer every year.”

The Sun delivers enough energy to the Earth in an hour to provide humans with everything they need for an entire year


Steady start for new water retail market – but more still to do

There have been more than 36,000 switches in the first three months since the launch of the newly competitive water retail market according to data published today by the market operator, MOSL.

Figures also released today by the Consumer Council for Water reveal that during the same period, there were 370 complaints from non-household customers (compared to 232 in the same quarter last year), with billing-related issues remaining the most common cause of complaint.

Commenting on today’s figures, Ofwat Chief Executive Cathryn Ross said:

“This first set of data is important because it gives us a baseline to monitor against and helps us to identify and address emerging issues.

“It is early days, but we are seeing some encouraging signs with new retailers, new deals, and, crucially, customers saving money and water.

“There have been more than 36,000 switches and around 60 per cent of those have come from low water users – more likely to be SMEs. That is significant, because we want to make sure this market works for all customers, not just the very large companies with specialist procurement divisions.

“In addition to those who have switched, we have heard that many others have agreed new deals with their current retailer.

“More needs to be done however; comparing offers is still not as easy as it needs to be and we have told retailers they must remedy this.

“We will continue to monitor the market closely to make sure it works for all and continue to meet and listen to customers, whose views will shape our work.”


Energy prices to soar by £400 in July as deals end – are YOU on one of these tariffs?

ENERGY prices in the UK set to soar, uSwitch energy has revealed. USwitch UK found 50 deals are ending this month, including those from EDF and Npower, meaning households could see a bill hike of up to £399.]


Households could be hit with the whopping sum of £399 if they don’t remember to switch to another deal this summer.

Fifty deals are set to end this summer compared to 33 in the same period last year.

A number of popular deals from eight well known suppliers including EDF and Npower are set to end this month.

This means families on these tariffs risk being automatically shifted onto a much pricier tariff.

There are fourteen of these fixed deals ending.

USwitch claim households could see a bill hike of up to £399 – a whopping 51 per cent – if they roll over to an expensive standard variable tariff.

The company is urging consumers not to get caught out this summer.

There are more fixed energy plans ending this summer than ever before according to uSwitch.com.

The average price increase for customers whose deals end in July is £274 per year, but some customers risk price hikes of up to £399.

If they take no action, the customers facing the biggest hikes are those with npower (£399), First Utility (£364) and EDF Energy (£360).

Ofgem’s rules allow customers to switch suppliers without paying exit fees from 42 days before their plan end date, so consumers are free to shop around without being penalised.

Claire Osborne, uSwitch energy expert, says: “But with so many bills set to rocket this month, it’s vital to act now to avoid being rolled onto sky-high tariffs.

Tariffs that are changing uSwitch

USwitch claim households could see a bill hike of up to £399

Switching tariff is incredibly easy and is definitely worth ten minutes online, on the phone or on an app.

“Don’t join the 16 million households languishing on poor-value standard tariffs.”

Energy bills are costing the majority of British customers much more than necessary, as providers keep them on the most expensive tariff without informing them cheaper options are available.

Currently, 17 million Britons are on the most expensive standard variable tariffs (SVTs) – dubbed a ‘rip off’ tariff by consumers.


Post-Brexit: Calls for close UK-EU ties on climate and energy

Failure to collaborate with the EU post-Brexit on energy and climate policy could raise energy costs for the UK, hitting consumers and unnecessarily complicating UK carbon emissions reductions. That’s according to the Green Alliance, which is calling on the UK government to continue to co-operate with the EU on energy and climate post-Brexit, claiming that it is “strongly in the national interest, particularly in relation to the growing low carbon economy.”

The independent think tank says that this sector already represents two to three percent of the UK’s GDP, and over 55 percent of trade in low carbon technology is with the EU.

Negotiating Brexit, from think tank Green Alliance, highlights Brexit risks and proposes establishing a “Paris co-operation track,” using the Paris Agreement on climate change, an international mechanism ratified independently by both the EU and the UK, as the basis for future collaboration with the EU on climate and energy.

According to the Green Alliance, the five main areas at risk are:

• Electricity interconnection with the EU which meets seven per cent of UK’s electricity needs and keeps consumer energy bills down. National Grid’s “two degrees” scenario for UK electricity sees interconnectors providing 17 percent of UK peak demand by 2023. A doubling of existing interconnection could save up to £1 billion a year in reduced wholesale prices by 2020, but leaving the EU’s internal energy market would put this at risk.

• Northern Ireland’s energy integration with the Republic of Ireland. If the UK leaves the internal energy market, it will disrupt the £6 billion (US$7.87 billion) Irish energy market.

• Favorable finance terms from the European Investment Bank. Current loans from the EIB are worth £8 billion (US$10.5 billion), more than double the finance previously available from the Green Investment Bank for UK energy infrastructure over the past five years. This favorable finance has underpinned the success of the UK offshore wind and electric vehicle sectors.

• Maintaining product standards and, in particular, vehicle standards which UK car manufacturers must comply with, as they export 80 percent of their vehicles, half of EU consumers. Divergence in a vehicle and other product standards would undermine UK exporters and risks turning the UK into a dumping ground for inefficient and shoddy products that aren’t fit to be sold in the EU.

• Delivering the carbon budgets where 55 percent of required emissions reductions to 2030 are expected to be delivered through EU-derived legislation with risks to effective transposition and future compliance and governance.

The study identifies several actions for the UK including to reconsider the hard line on the role of the European Court of Justice (ECJ), which governs the shared energy and climate rules across the EU and countries in the wider Energy Community.

“The UK’s concerns about the ECJ should not lead us to forego the benefits of high levels of cooperation: greater energy security and faster and cheaper decarbonization. Several options are available to address potential concerns over the role of the ECJ,” says the Green Alliance.

It suggests that an “association agreement” with the EU is a potential alternative, which would minimize the ECJ’s role and could achieve the necessary outcomes.

It also wants to retain access to the internal energy market for electricity and gas to maintain barrier-free trade. The internal energy market and its rules and principles have served British interests well, according to the think tank, and Britain should negotiate continued participation in the market and the technical bodies proposing the rules.

The Green Alliance also urges the UK to stay aligned with EU product standards and environmental principles as a significant divergence from these could undermine UK competitiveness and the ability to trade in low carbon goods and services, as well as weakening health and environmental safeguards.

“Sustained cooperation will mean that the UK can continue to stand with the EU at the forefront of international leadership on climate. It will also maximize the benefits of low carbon trade with Europe and support the shared vision of long term energy security. Not least, it will secure clean and cheap energy for UK consumers,” says Chaitanya Kumar, Green Alliance’s senior policy adviser on low carbon energy, and author of the analysis.


Is there enough electricity? National Grid reacts to fossil-fuel vehicle ban

National Grid has welcomed the plan to make electric or zero-emission cars and vans account for all new sales from 2040, but said the government and industry now faced big decisions on how the extra power was provided and demand for it was managed.

The grid recently warned that, by 2030, electric cars could require 3.5-8GW of additional capacity, on top of the current peak demand of 60GW.

By comparison, the nuclear power station being built at Hinkley Point in Somerset will add 3.2GW of capacity to the system.

By the middle of the century, when it is assumed almost all cars will be electric, that extra peak demand could be up to 18GW.

The lowest estimates of extra demand assume that drivers charge their cars at off-peak times. Smart meters and time-of-day tariffs could incentivise owners to charge when wind and solar power are plentiful and electricity is cheaper.

Energy networks could also manage demand via automatic time-shift charging, whereby a car plugged in at home at 6pm is not actually charged until the early hours of the morning, when demand is low.

Ministers have already urged drivers to think carefully and avoid placing extra pressure on the grid.

James Court, head of policy at the Renewable Energy Association, a trade group, said: “We need smart vehicle charging and price-reflective tariffs if the future electric fleet is to be a huge benefit and not a hindrance to our grid.”

Regardless of how sensibly the extra demand is spread across the day, electric cars will require investment in new power generation.

The energy analyst Wood Mackenzie estimates that if one in three cars sold in 2035 is fully electric, the vehicles would collectively account for 3% of the UK’s total electricity demand. Building 400,000 charging points for them all would cost £30bn, the group has said.

National Grid said the extra power would be generated from gas, windfarms, imports and nuclear reactors – not from coal, which is scheduled to disappear from the UK’s power mix by 2025 at the latest.

And the switch to electric vehicles could even provide an eventual boost to the grid.

The government recently announced £20m of funding to support research on vehicle-to-grid technology, where the grid could call on the power stored in the cars’ batteries to help cope with fluctuations from intermittent wind and solar farms.

Since you’re here …


Centrica starts building new back-up gas plant

Construction has started on Centrica’s new back-up power plant at Peterborough power station.

The 50MW gas-fired facility is expected to play a key role in supporting local peaks in demand, producing enough electricity to power around 50,000 homes.

It will operate as a ‘peaking plant’, able to go from a cold start to full power in less than two minutes.

The new plant will include five reciprocating engines that will typically be used on weekdays to meet periods of high demand or provide back-up power when needed.

The project is part of Centrica’s £180 million investment programme into new flexible power facilities across the UK.

David Theakstone, Generation Manager at Peterborough power station said: “This fast response plant will help to meet local energy demand, while supporting the changing way electricity is generated.”

A team of up to 95 people will be on site during construction, which is expected to take around 15 months.

Last month Centrica announced it will be closing its Rough gas storage facility.

UK Conservatives champions shale gas and electric cars

UK Conservative leader and Prime Minister Theresa May set out her party’s General Election manifesto on Thursday and it expressed a strong backing for shale gas and electric vehicles.

Meanwhile representatives from the nuclear power industry have told Power Engineering International they believe the manifesto is positive towards their sector despite not being mentioned in the document.

The party aims to have the lowest energy prices in Europe and has plans in place to make shale gas more palatable to affected communities.

Planning processes for shale developments would be streamlined and a higher share of tax revenues, paid into a national “shale wealth fund”, would be given to local communities in a bid to overcome grassroots opposition to fracking.
Theresa May
The Conservative manifesto claimed that Britain had the potential to have a similar ‘shale revolution’ as being experienced in the US, a technological development fiercely opposed by the Labour and Liberal Democrat opposition parties.

The party also promises an independent review into the cost of energy to ensure UK energy costs are as low as possible, while ensuring a reliable supply and meeting 2050 carbon reduction objective.

UK Conservatives champions shale gas and electric cars


UK Conservative leader and Prime Minister Theresa May set out her party’s General Election manifesto on Thursday and it expressed a strong backing for shale gas and electric vehicles.

Meanwhile representatives from the nuclear power industry have told Power Engineering International they believe the manifesto is positive towards their sector despite not being mentioned in the document.

The party aims to have the lowest energy prices in Europe and has plans in place to make shale gas more palatable to affected communities.

Planning processes for shale developments would be streamlined and a higher share of tax revenues, paid into a national “shale wealth fund”, would be given to local communities in a bid to overcome grassroots opposition to fracking.
Theresa May
The Conservative manifesto claimed that Britain had the potential to have a similar ‘shale revolution’ as being experienced in the US, a technological development fiercely opposed by the Labour and Liberal Democrat opposition parties.

The party also promises an independent review into the cost of energy to ensure UK energy costs are as low as possible, while ensuring a reliable supply and meeting 2050 carbon reduction objective.


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Despite the focus on affordability, the manifesto called for Britain to remain “at the forefront of action against global climate change” and reiterated a commitment to cutting greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050. A goal for “almost every car and van to be zero emission by 2050” was renewed, together with a pledge to invest £600m by 2020 to help develop electric vehicles.

The manifesto expressed support for the UK’s role as a “global leader in offshore wind”, while continuing to demonstrate opposition to onshore wind.

In line with the principle of affordability, the manifesto omitted mention of nuclear power and said only that the UK’s post-Brexit energy policy would be based “not on the way energy is generated but on the ends we desire — reliable and affordable energy”.

Nuclear power has come in for criticism due to its association with high costs.

This represents a shift away from technology specific targets such as the EU goal for 15 per cent of overall energy to come from renewables by 2020.

Among the other elements to the Tory party’s proposals were to establish an industrial energy efficiency scheme to help large companies install measures to cut their energy use and their bills. It was also proposed that smart meters be offered to every household and business by the end of 2020.

Bodies such as Greenpeace as well as particular media outlets have pointed to the omission of nuclear power in the Conservative’s document as indicative of a negative attitude by the party to the sector, however nuclear interests appear unperturbed.

In a statement to Power Engineering International on the subject Dr Jonathan Cobb, Senior Communication Manager with the World Nuclear Association said, “The Conservative manifesto is notable for not making specific policy statements about any form of electricity generation, other than a negative statement on onshore wind in England.”

“Nuclear stands well to contribute to the diverse energy mix outlined as an objective, and can contribute strongly to meeting all aspects of the policy.”

“More significantly the track record of the current Conservative government has demonstrated strong support for nuclear energy. The support for nuclear energy expressed in both the Labour and Liberal Democrats manifestos indicates there will be good cross-party support for nuclear energy in the UK in the next government.”

Tom Greatrex, Chief Executive of the Nuclear Industry Association, added to that positive interpretation of the manifesto, telling Power Engineering International, “The NIA welcomes the Conservative Party manifesto commitment to meeting our international climate commitments and the need for a secure and reliable power supply for the UK’s homes, businesses and public services. Whoever forms the government after 8 June will need to ensure those objectives are met, and as the current Government’s industrial strategy identified the civil nuclear industry as an early candidate for a sector deal, it is clear that the wider industrial and economic contribution nuclear makes is also appreciated.”

“With two thirds of the country’s despatchable generation capacity retiring between 2010 and 2030, and all but one of our nuclear fleet, the replacement of that capacity will continue to be a priority for the new Government. Nuclear provides secure, reliable, low carbon power and is not reliant on the weather or exposed to the volatility of fossil fuel prices. It forms an integral part of a logical, rational and sensible balanced energy mix, and will continue to do so in the UK.”

So proud of Manchester for pulling together yesterday

There were high emotions at a benefit concert staged by Ariana Grande in Manchester less than two weeks after the terror attack following her gig in the city. But the show also demonstrated the power of pop music to bring people together.

Several viewers took to social media to highlight the moment a policeman was seen dancing with young fans as a symbol of the city’s unity.

The concert was watched by an average of 10.9 million viewers, peaking at 14.5 million as the gig drew to a close – making it the most watched TV show of the year so far.

Here are some of the night’s other most powerful moments.

Strong – Robbie Williams

Robbie WilliamsImage copyright DAVE HOGAN FOR ONE LOVE MANCHESTER

“Manchester, we’re strong, we’re strong, we’re strong/We’re still singing our song, our song, our song.” – Robbie Williams, Strong (2017 version)

With a few tweaks to the chorus, Robbie has turned a minor 1998 hit into a rousing song to rally the masses in Manchester 2017.

Everyone in the crowd could easily bellow the simple chorus, and Robbie bellowed it in between songs too.

It even overshadowed his classic Angels as his main sing-a-long moment.

Wings – Little Mix


“No matter what you say it won’t hurt me/Don’t matter if I fall from the sky/These wings are made to fly.” – Little Mix, Wings

Little Mix induced some of the most piercing screams of the night.

The girl group explained that Wings is about encouraging people to “stand together and not let anything bring them down” – but their performance was the biggest slice of pure, escapist, plastic pop we had.

So it was also the epitome of one aspect of what tonight was all about – defending the right to gyrate in PVC pants and conjure cliche-ridden fantasies, and for fans to lap up every second of it.

My Everything – Parrs Wood High School Choir and Ariana Grande

Ariana Grande and Parrs Wood High School Choir

“If I go tomorrow, just know I’m yours/’Cause what we got is worth fighting for.” – Ariana Grande, My Everything

Rubbing shoulders with the pop superstars were 26 students from Parrs Wood High School Choir in Manchester, who performed a tear-jerking rendition of Grande’s My Everything.

They were invited to perform after putting their version of the track on YouTube in tribute to those who died in the attack.

Angel-voiced soloist Natasha Seth, 12, was joined by Grande herself, who held the girl’s hand – then, as the emotion became too much for the youngster, put her arm around her shoulder and squeezed her tight.

Part of Me – Katy Perry


“Throw your sticks and your stones, throw your bombs and your blows/But you’re not gonna break my soul.” – Katy Perry, Part of Me

Of all the performers, Katy Perry captured the mood of defiance and strength the best.

Wearing a white feathered gown, she started by telling the crowd: “Love conquers fear and love conquers hate and this love that you choose will give you strength, and it’s our greatest power.”

Part of Me hit exactly the right tone – reflective and empowering – before she unleashed her full-throated anthem of defiance, Roar.

Where Is The Love? – Black Eyed Peas and Ariana Grande

Black Eyed Peas and Ariana Grande

“Overseas, yeah, we try to stop terrorism/But we still got terrorists here livin'” – Black Eyed Peas, Where Is The Love?

Almost 15 years after it was a mega hit, this song still sums up the incomprehension most people feel at the brutal ruthlessness of the modern world, while offering hope that it doesn’t have to be this way.

Ariana joined on vocals and there was a real moment when the band encouraged fans to raise a finger to represent “one love” and make heart shapes with their hands.

Will.i.am did arrive on stage saying “Whassup London!” – but he just about got away with it by paying tribute to the capital as well as Manchester.

Don’t Look Back in Anger – Coldplay and Ariana Grande

Ariana Grande and Chris MartinImage copyright DAVE HOGAN FOR ONE LOVE MANCHESTER

“Don’t look back in anger, I heard you say/At least not today” – Oasis, Don’t Look Back In Anger

Another song that has taken on new significance for Mancunians in the past two weeks is Oasis’s Don’t Look Back In Anger. Here, it fell to Coldplay to perform it, with a little help from Ariana.

Few bands can get a crowd going like Coldplay, and it was the first of four songs the band played.

As the sun set, thousands of mobile phone lights twinkled during Fix You. Then millions of small multi-coloured stars drifted across the crowd after being shot out of a glitter cannon as Viva La Vida morphed into Something Just Like This.

Live Forever – Liam Gallagher and Chris Martin

Liam GallagherImage copyright DAVE HOGAN FOR ONE LOVE MANCHESTER

“Maybe you’re the same as me/We see things they’ll never see/You and I are gonna live forever.” – Oasis, Live Forever

Former Oasis frontman Liam Gallagher was a surprise addition to the line-up, pleasing many of the Mancunian music fans and representing a different side of the musical spectrum to most of the other acts.

And a song that was once all about bravado became melancholy and tender here. That was thanks in part to Chris Martin, again, who filled in for Liam’s brother Noel on acoustic guitar.

We even just about forgave Liam for playing a new song, Wall of Glass.

One Last Time – Ariana Grande


“So one last time/I need to be the one who takes you home/One more time/I promise after that, I’ll let you go.” – Ariana Grande, One Last Time

Of all of Ariana’s songs, this is the one that fans have turned to since the attack. It was the penultimate song here, which she sang with the rest of the line-up stood behind her.

On the verge of tears, she then went into an incredibly poignant version of Over the Rainbow to close the show.

Her performance throughout the night carried dignified emotion, and she showed grit and willpower by staging this show less than two weeks after those tragic events.

After tonight, she is idolised a little bit more by her fans, is higher in the estimation of those who had thought of her as a pop kitten, and is admired by those who only heard her name for the first time 13 days ago.