UK consumers hit by energy and council tax bill rises

As Ofgem raises its price cap, cost of postage stamps and dental checkups also rises

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Energy price cap ‘could see £1.67 billion added to UK bills on the 1st of April’

uSwitch believes this could happen if suppliers increase their rates to match the level of the cap

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EDF and Anesco partner for ‘sector first’ storage floor price

Anesco has turned to EDF Energy to optimise its landmark Clayhill solar-plus-storage farm, including the provision of an “industry first” guaranteed floor price for storage.

EDF will work alongside its technology partner Upside Energy to secure contracts with network operators and generate revenue using Clayhill’s generation assets.

And in what’s been described as a significant step forward for the UK renewables scene, EDF has offered a guaranteed floor price for Clayhill’s services.

EDF will operate Clayhill within the firm’s proprietary demand side response platform PowerShift. The utility will make decisions on whether to consume or sell energy based on real-time wholesale market prices and other market signals.

The duo, alongside technology partner Upside Energy, will also test new business models and work to connect additional Anesco assets to PowerShift.

Anesco has more than 100MW of operational battery storage at its disposal with a pipeline of 380MW to connect by 2020.

Vincent de Rul, director of energy solutions at EDF Energy, said the companies had been working closely over the past few months to develop the contract structure, describing it as a “crucial” step towards balancing renewable generation on the grid.

Steve Shine, executive chairman at Anesco, said the addition of a floor price and 24-hour trading capability for Clayhill represented “crucial new developments” for the storage sector.

“This is a partnership between three fantastic organisations, we’re already achieving great results and I am sure we will be working together ever more closely in the future,” Shine added.

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SSE launches new corporate strategy aligned to SDGs

SSE has listed four key targets under the new 2030 strategy that directly align to the SDGs. A goal to cut the carbon intensity of the electricity it generates by 50% is linked to Goal 13: Climate action, while Goal 7: Affordable and clean energy, will see SSE treble its renewable output to 30TWh annually. SSE first announced the 50% carbon reduction on edie’s Mission Possible Pledge Wall during Green GB Week.

The energy firm will also contribute to SDG 9: Industry, innovation and infrastructure by accommodating the rollout of 10 million EVs in Great Britain by investing in infrastructure and network flexibility. SSE will also champion Fair Tax and a Living Wage in the UK and Ireland, linked to Goal 8: Decent work and economic growth.

SSE’s new and first chief sustainability officer Rachel McEwen will report directly to chief executive  Alistair Phillips-Davies.

“We’ve put the transformation to a low carbon economy at the heart of our strategy and these measures demonstrate how seriously we take that commitment.  Our ambition is to be a leading energy company in a low carbon world,” Phillips-Davies said.

“The four ambitious objectives underpin what our businesses stand for and our investment in long-term, sustainable, low carbon assets and infrastructure will contribute to the UK and Ireland’s climate change targets while building a fairer and more prosperous society.”

As well as appointing a chief sustainability officer, SSE will also require all senior management to be judged against the delivery of the 2030 strategy.

A for SSE

SSE increased its CDP Climate score from a B to an A- last year. It is also the first FTSE100 company to achieve the independent Fair Tax Mark accreditation in 2014 and every year since and was accredited as a Living Wage employer in 2013.

The company is also among the 16 firms which have co-founded a new forum aimed at helping Europe’s business community champion sustainable finance and impact investing.

Last year, SSE issued its second green bond worth €650m, confirming the big six supplier as the largest issuer of green bonds from the UK corporate sector at the time.

Dame Sue Bruce, independent Chair of SSE’s Remuneration Committee, said: “Through this new approach, very clear and ambitious environmental, social and economic sustainable goals have now been cemented into the business strategy. Aligning directly those aims to how executive directors and other senior managers are rewarded, over time, sets a precedent for how we feel sustainability should be regarded by business leadership.

“We have received clear feedback from shareholders and stakeholders stating they would welcome climate change and sustainability incentives for senior leaders and I look forward to discussing this with them in the weeks to come.”

Earlier this week, SSE announced that it would close a 485MW unit at the coal-fired Fiddler’s Ferry power station in Warrington.

Consultation on the methodologies for RIIO-ED1 closeout

The RIIO-ED1 price control runs from 1 April 2015 to 31 March 2023. Within RIIO-ED1 there are a number of cost areas that require specific mechanisms to account for their uncertain nature. As a result of these mechanisms, some areas of the price control need to be settled (“closed out”) once the price control has ended.

We are proposing methodologies to closeout six elements of RIIO-ED1:

  •  Load Related Expenditure;
  •  Net contributions from customers towards gross reinforcement costs, known as Net to Gross;
  •  Network Output Measures/Network Asset Secondary Deliverables;
  •  High Value Projects (HVP);
  •  Expenditure associated with Link Box Replacement Volumes; and
  •  Expenditure associated with Shetland Extension Fixed Energy Costs, Shetland Extension Battery Costs, and Shetland Enduring Solution Process Costs.

We welcome views from stakeholders on our suggested approach outlined in the consultation, by 1 May 2019. The final versions of these methodologies will be included in the RIIO-ED2 Financial Handbook.

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Energy efficiency scheme for small and medium sized businesses: call for evidence

Consultation description

This call for evidence seeks views on various proposals for a new Business Energy Efficiency Scheme focused on SMEs.

We are keen to hear from anyone with an interest in how a new scheme for SMEs could be designed, including:

  • energy companies
  • network operators
  • SMEs
  • financial institutions
  • Energy Service Companies (ESCOs)
  • academics

SMEs account for 99% of UK business and have a very low awareness of the benefits of energy efficiency. The additional documents here provide summaries of findings from 2 projects which explored how to engage SMEs in energy efficiency:

  • Digital Discovery: funded by BEIS and delivered through external contractors (completed November 2017) considers the demand for a website targeting SMEs with information about energy efficiency
  • Digital Alpha: a 12-week project (completed July 2018) to build 3 prototypes with the aim of motivating SMEs to make a significant contribution to the 20% ambition

We have issued the government response to our previous call for evidence, Helping businesses to improve the way they use energy, in parallel with this call for evidence.

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Energy price cap set to keep inflation low in February

Inflation is expected to have held steady below the Bank of England’s target in February, thanks to the cap on energy prices.

Consensus estimates predict Office for National Statistics (ONS) figures will reveal on Wednesday that the Consumer Prices Index (CPI) rate of inflation was flat at 1.8% last month.

It is set to match January’s rate, which fell after the introduction of a cap on standard variable tariffs by energy watchdog Ofgem at the start of the year.

This is likely to continue to be the main factor keeping inflation low in February, putting it below the Bank of England’s 2% target.

But some factors could cause a surprise in February’s rate, according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

“The upside risk partly reflects the fact that January’s rate was just 0.002pp from rounding up to 1.9%,” he said.

“Inflation also likely will come under upward pressure in February from the food component, which we expect to rise to 1.2%, from 0.9% in January.”

According to the British Retail Consortium (BRC), food shop price inflation in February was 1.6%, up slightly from January’s 1.5%.

Falling petrol prices have also been holding inflation back in recent months, with the trend set to continue in February.

But Victoria Clarke, an economist at investment firm Investec, said this was unlikely to have a major effect.

“While this trend continued in February, it did so at a more modest pace and will therefore have a marginal effect on overall CPI when set against a similarly small decrease a year earlier,” she said.

“In fact, its impact ought to be neutralised by the uprating of duty rates on both wine and high-strength cider by RPI that was announced in the Autumn Budget.”

Services inflation is expected to be steady at 2.5%, without its usual boost from the half-term holidays.

Wednesday’s inflation figure follows weak manufacturing output in February, when the Markit/CIPS UK manufacturing purchasing managers’ index showed it fell to a four-month low.

The rate of job losses in the industry also grew, hitting a six-year high amid low optimism.

The February CPI rate will be the first to include goods added to the ONS’s representative basket, which reflects changing consumer habits.

Last week the agency announced the inclusion of baking trays, owing to the popularity of The Great British Bake Off.

Smart speakers, flavoured tea and electric toothbrushes also made it on to the list, while washing powder and envelopes were scrapped.08

Australian oil and gas event ‘presents new opportunities’ for UK subsea firms

The Australasia Oil and Gas Conference (AOG) is Australia’s largest oil and gas exhibition, and Subsea UK attended the event with five member companies to promote UK expertise and learn about the opportunities in this continent.

Neil Gordon, chief executive of Subsea UK, shares his thoughts on the three day event.

This year’s show was very positive compared to recent years.

The Australian market had been badly affected by the downturn.

Prior to that, the industry had seen more than $260billion of investment over 10 years in big capital projects. However the downturn came as many of those developments were nearing completion.

As a result, the region is now going through a transitional period, moving from a CAPEX intensive phase into an OPEX environment.

This presents new opportunities for the future of the industry and there was a definite feeling of optimism at AOG.

At the end of last year, Australia overtook Qatar to become the world’s largest exporter of Liquified Natural Gas (LNG), and has set out to establish Western Australia as a global LNG hub.

This development, and the region’s investment into the offshore industry, present opportunities for UK companies.

With much of the major infrastructure now in place, the region is focussing on the operations and maintenance of these assets.

With this comes ongoing opportunities for the subsea industry, in particular, because of the nature of LNG operations, there will be a constant requirement to add new subsea tiebacks over the next 20 to 30 years.

The major infrastructure developments require subsea tie-backs to be added to maintain the constant volume of LNG required to “feed” the facilities within their optimum operational windows.

In many cases, although the North Sea is a much more mature province, the technological challenges being faced are very similar and the UK subsea sector has the experience and expertise to help provide the solutions.

There are however some unique challenges to the region which include large pipelines over great distances with some challenging seabed conditions.

Due to the geographical spread and distances between operations across the basin, there is a need for innovative technology to help make maintenance of the assets as efficient and cost effective as possible.

As a recognised global hub for subsea engineering, there is potential for UK SMEs to work with companies in Australia to deliver solutions to these challenges through the development of new technology and innovation.

All of these elements mean that the Australian market is a very attractive one for UK companies.

The five member companies who travelled to AOG with Subsea UK – Rotech Subsea Limited, Ashford Instrumentation Limited, Viper Innovations Limited, Neptune Engineering and Vulcan SFM – reported positive conversations along these veins at the exhibition. I am very optimistic that this will have opened doors and created opportunities for them.

As well as forging new relationships, attending AOG is about sharing knowledge. I was invited to give a presentation at the Collaboration Forum and participate in a discussion exploring the future of jobs in oil and gas.

In this session, I highlighted some of the work OPITO and Robert Gordon University are doing around UKCS Workforce Dynamics which looks at the changing skills requirements for the industry over the next 20 years with a focus on the future impact of digitalisation across the sector.

This is an issue being faced across the industry as companies look to develop new skills to keep up with the next steps in digital innovation such as remote intervention, automation, robotics and artificial intelligence. Ensuring there is a strong workforce for the future with the right skills is vital for the region as it seeks to capitalise on the opportunities and investment in projects.

As a greenfield basin moving to brownfield, Australia is looking to learn from the experience and lessons learned from operating ageing fields. As a result, there is a thirst for knowledge from the UK and Norway in terms of best practice and determining the factors for success.

With all this in mind, the coming years are going to be interesting for Australia and will continue to present exciting and profitable market opportunities for UK companies.

Subsea UK is one of the partner organisers of the AOG Subsea Forum Conference along with SEA (Subsea Energy Australia) and SUT (Society of Underwater Technology).

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UK invests £1.7m in two Kenyan solar energy plants

The government is investing KES220 million (£1.7m) in the development of two solar energy plants in Kenya.

The Foreign and Commonwealth Office is providing the money through InfraCo Africa, a private infrastructure development group (PIDG) company, for the solar facilities in Smburu and Transmara, each with a capacity of 10MW.

Work is also underway to explore the potential for one or both of the projects, which will boost access to green electricity in the rural Kenya, to take part in a local currency power purchase agreement (PPA) pilot.

The new projects will support the Kenyan Government’s ambition to achieve universal electricity access by 2022.

Minister for Africa Harriett Baldwin said: “Transforming Energy Access is using the UK’s expertise in technology and finance to provide power for people across Africa and tackle one of the world’s biggest challenges, climate change.

“The UK Government’s investment in clean energy and waste reduction for people and businesses will help millions of people across Africa. It’s a win for the developing world and a win for the UK.”

The announcement follows the government’s pledge to invest £30 million in energy access projects across Africa.

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Australian oil and gas event ‘presents new opportunities’ for UK subsea firms

The Australasia Oil and Gas Conference (AOG) is Australia’s largest oil and gas exhibition, and Subsea UK attended the event with five member companies to promote UK expertise and learn about the opportunities in this continent.

Neil Gordon, chief executive of Subsea UK, shares his thoughts on the three day event.

This year’s show was very positive compared to recent years.

The Australian market had been badly affected by the downturn.

Prior to that, the industry had seen more than $260billion of investment over 10 years in big capital projects. However the downturn came as many of those developments were nearing completion.

As a result, the region is now going through a transitional period, moving from a CAPEX intensive phase into an OPEX environment.

This presents new opportunities for the future of the industry and there was a definite feeling of optimism at AOG.

At the end of last year, Australia overtook Qatar to become the world’s largest exporter of Liquified Natural Gas (LNG), and has set out to establish Western Australia as a global LNG hub.

This development, and the region’s investment into the offshore industry, present opportunities for UK companies.

With much of the major infrastructure now in place, the region is focussing on the operations and maintenance of these assets.

With this comes ongoing opportunities for the subsea industry, in particular, because of the nature of LNG operations, there will be a constant requirement to add new subsea tiebacks over the next 20 to 30 years.

The major infrastructure developments require subsea tie-backs to be added to maintain the constant volume of LNG required to “feed” the facilities within their optimum operational windows.

In many cases, although the North Sea is a much more mature province, the technological challenges being faced are very similar and the UK subsea sector has the experience and expertise to help provide the solutions.

There are however some unique challenges to the region which include large pipelines over great distances with some challenging seabed conditions.

Due to the geographical spread and distances between operations across the basin, there is a need for innovative technology to help make maintenance of the assets as efficient and cost effective as possible.

As a recognised global hub for subsea engineering, there is potential for UK SMEs to work with companies in Australia to deliver solutions to these challenges through the development of new technology and innovation.

All of these elements mean that the Australian market is a very attractive one for UK companies.

The five member companies who travelled to AOG with Subsea UK – Rotech Subsea Limited, Ashford Instrumentation Limited, Viper Innovations Limited, Neptune Engineering and Vulcan SFM – reported positive conversations along these veins at the exhibition. I am very optimistic that this will have opened doors and created opportunities for them.

As well as forging new relationships, attending AOG is about sharing knowledge. I was invited to give a presentation at the Collaboration Forum and participate in a discussion exploring the future of jobs in oil and gas.

In this session, I highlighted some of the work OPITO and Robert Gordon University are doing around UKCS Workforce Dynamics which looks at the changing skills requirements for the industry over the next 20 years with a focus on the future impact of digitalisation across the sector.

This is an issue being faced across the industry as companies look to develop new skills to keep up with the next steps in digital innovation such as remote intervention, automation, robotics and artificial intelligence. Ensuring there is a strong workforce for the future with the right skills is vital for the region as it seeks to capitalise on the opportunities and investment in projects.

As a greenfield basin moving to brownfield, Australia is looking to learn from the experience and lessons learned from operating ageing fields. As a result, there is a thirst for knowledge from the UK and Norway in terms of best practice and determining the factors for success.

With all this in mind, the coming years are going to be interesting for Australia and will continue to present exciting and profitable market opportunities for UK companies.

Subsea UK is one of the partner organisers of the AOG Subsea Forum Conference along with SEA (Subsea Energy Australia) and SUT (Society of Underwater Technology).