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UK looking to target Russia’s energy sector in new sanctions

by with No Comment Brexit and Government Energy NewsGreen Energy UKNews

LONDON, March 4 (Reuters) – Britain will look to target Russia’s energy sector in future rounds of sanctions, a move the government has so far resisted amid warnings this could push up energy bills with oil and gas prices already at multi-year highs.

Since Russia’s invasion of Ukraine last week, Britain has imposed a ban on Russia selling debt in its capital markets and targeted several Russian banks with sanctions, as well as companies like defence firm Rostec and airline Aeroflot.

“We’ve been very coordinated on sanctions, we’ve shown huge unity. It’s having a big effect in Russia, but we now need to do more,” Liz Truss, Britain’s foreign minister, said during a visit to Brussels for a meeting of NATO members.

“We particularly need to look at the oil and gas sector, how do we reduce our dependence across Europe on Russian gas, how do we cut off the funding to Vladimir Putin’s war machine?”

Numerous nations have imposed sweeping sanctions against Russian companies, banks and individuals following Russia’s invasion of Ukraine, although energy has largely been exempt to try and prevent prices spiralling even higher.

Despite that, the oil trade is in disarray, with producers postponing sales, importers rejecting Russian ships and buyers worldwide searching elsewhere for needed crude.

In Britain a ban on Russian ships docking in its ports, sanctions on banking and trade and a move to prevent Russian companies raising finance in London have indirectly impacted energy firms.

The likes of Gazprom have secondary London listings, and the London Stock Exchange (LSE) this week has suspended trading in Russian securities. read more

The United States and EU already have some sanctions in place on Russia’s energy and oil refining sectors, but Washington has been cautious on imposing sanctions on Russia’s oil and gas flows. read more

Russia is the second largest exporter of crude oil worldwide, trailing only Saudi Arabia.

Some of the world’s largest energy companies, such as BP and Shell, have also begun to abandon multibillion-dollar positions in Russia since the invasion began.

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Kwarteng seeks to calm energy chiefs, as Price Cap’s architect calls for its overhaul

by with No Comment Green Energy UKNews

Beleaguered energy secretary Kwasi Kwarteng won the support of Britain’s power bosses today, reassuring them that vulnerable consumers would be continue to be protected, as he warned that more suppliers are set to quit UK retailing.

Speaking at EnergyUK’s annual conference, the minister repeated his three principles to overcome Britain’s crisis, caused by spiralling wholesale costs of gas:

  • No government bail-outs for failed suppliers
  • Customers, particularly the most vulnerable, will have their supply safeguarded
  • The UK energy market must remain competitive

More under-financed retailers would quit the supply business in coming months, Kwarteng predicted, but he vowed ‘there must be no public payouts for bad management’.

He said Britain must continue to press ahead in deploying more generation from renewables. In the medium term it would protect consumers from what the minister called ‘exorbitant spikes’ in prices.

EnergyUK’s chief executive Emma Pinchbeck indicated to BBC Radio at lunchtime her acceptance that the minister was doing all he could to combat the crisis.

She asked only that D-BEIS continue to monitor gas wholesale markets closely, and Ofgem should institute reforms so that this ‘unprecedented crisis’ should not happen again.

Ofgem’s price cap as implemented last month is already predicted to inflict a £ 100 per year rise this winter on up to 15 million home account holders.  Business tariffs are not protected.  The cap’s revision next April, based around current wholesale prices, is feared to extract a further £400 million from consumers’ wallets in 2022.

In a dramatic intervention this afternoon, the price cap’s architect John Penrose MP called for its radical overhaul.

Penrose, appointed by premier Johnson as his government’s competition czar, and husband of track-and-trace boss Dido Harding, argued that energy markets needed a ‘circuit-breaker’, suspending trades in times of unusual volatility such as the present.

Delivering the prestigious Beesley Lecture to economists, Penrose would say:

“The energy price cap was supposed to wipe out the ‘loyalty penalty’, where loyal customers on default tariffs were quietly charged miles more than people who switched. But it isn’t working.

“Since the cap was introduced, the loyalty penalty has hardly changed at all, so millions of families are still being ripped off at the same time as prices are spiking and energy firms are going bust. We’ve got the worst of both worlds.

 “We should reform the cap so it stops loyal customers from being ripped off in the 99 months out of a hundred when the market is normal. But make sure it still protects us for the 1 month in a hundred when things aren’t normal, like now, when there’s an international price spike.

“The fix would be pretty simple. The Financial Conduct Authority is already introducing new rules to wipe out loyalty penalty ripoffs in insurance, by saying insurance firms can’t charge existing customers more than new ones. We should do the same for energy too.

“But Ofgem should still be able to fix a price cap on the – thankfully pretty rare – moments when there’s an international price spike too.  

“Lots of stock markets have an emergency circuit-breaker, where regulators intervene if prices suddenly rise or fall really fast, and we should have the same for energy. Ofgem would be able to intervene to protect customers with a new price cap when it was really needed, if the international price spiked by more than a pre-set amount and time.

“The reformed price cap wouldn’t just stop loyalty penalty ripoffs and protect families from price spikes. It would make energy firms healthier and more resilient too.

“They’d be able to hedge their risks when international prices spike, because the circuit-breaker would only be triggered if prices moved by more than the pre-set amount.

“Challenger firms would be financially stronger and healthier because they wouldn’t face unfair competition from big incumbents with lots of long-term clients who were being milked with loyalty penalties to subsidise new customers either”.

Not-for-profit promoters of clean power Regen earlier this week proposed their own structural reforms, this time to supply and generation.

An ambitious but easy doubling to 10GW of all the onshore renewables projects eligible to enter this December’s coming Contracts for Difference auctions would yield the opportunity quickly to hedge against rising power prices, and at no cost to tax- or bill-payers, the body argued in its letter to Kwarteng.

“CfDs are an excellent energy price hedge: in return for revenue certainty, generators pay back to the public purse when prices are high – directly reducing electricity bills, Regen said.  Annual CfD auctions were needed, Regen said.

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Fracking industry urges Government to look again at shale gas with UK energy prices set to surge

by with No Comment News

UK Onshore Oil and Gas said the looming crisis was a ‘bizarre state of affairs’ when gas beneath Northern England and the Midlands could ‘meet the UK’s gas demand for 50 years’

Campaigners are urging Boris Johnson to hold the Government’s line on fracking as the UK’s onshore oil and gas industry has called on ministers to look again at shale gas amid the looming energy crisis.

It comes amid warnings from trade union leaders that hundreds of thousands of jobs could be lost unless Downing Street takes urgent action to avoid a surge in gas prices next spring.

Boris Johnson announced a moratorium on hydraulic fracturing in England in 2019, with drilling already blocked in the rest of the UK, after a scientific report warned it was not possible to predict the magnitude of earthquaes it might trigger.

It came after operations were halted in Lancashire only months earlier when homes were shaken by the UK’s largest fracking tremor, with residents saying houses shook during a “deep, guttural roar”.

But Katherine Gray from UK Onshore Oil and Gas said the looming crisis was a “bizarre state of affairs” when gas beneath Northern England and the Midlands could “meet the UK’s gas demand for 50 years”.

She said: “Our current gas crisis should be the flashing neon prompting the Department for Business, Energy and Industrial Strategy needs to look at the science and come up with a workable plan to maximise our abundant domestic resource.”

Tony Bosworth, energy campaigner at Friends of the Earth, said: “Fracking was rightly halted two years ago because of concerns about safety and nothing has changed since then.

“The way out of the current gas crisis is not to produce more gas, but to insulate people’s homes and to increase deployment of renewable energy to reduce our reliance on expensive and polluting fossil fuels.”

A spokeswoman for Frack Free Lancashire said: “Science doesn’t change. Fracking is still as unacceptable as ever given the geological and environmental conditions in the UK.”

As the Government prepares to host the COP26 climate change summit next month, the Business Secretary Kwasi Kwarteng has already ruled out future fracking, saying it would disrupt too many communities.

The GMB union said the Government must urgently find a way of protecting manufacturing jobs from a surge in gas prices and ensure the UK manufactures can still meet their longer-term net zero targets.

A Government spokesperson said: “The issues we are facing are not a question of security of supply, but wholesale gas prices set by international markets. We maintain our position that fracking will not be allowed to proceed in England unless compelling new scientific evidence is provided.

“We are determined to secure a competitive future for our energy intensive industries such as manufacturing and construction, and in recent years have provided them with extensive support, including more than £2bn to help with the costs of energy and to protect jobs.”

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Pay up or have licences ripped up, Ofgem warns five suppliers

by with No Comment News
Experts worry that only a handful of energy suppliers might be left in the British market by Christmas after gas prices soared
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UK energy crisis: Big firms positioned for further gains

by with No Comment News

FTSE 350 Oil Gas and Coal has risen 9.3%

1.5 million UK customers have been left out in the cold without a gas provider in recent weeks.

However, perverse though it may seem, it is the gas sector that is winning from an investment perspective and it could see further benefits as industry commentators expect the government to rethink their energy transition strategies.

In the month to 22 September, the FTSE 350 Oil Gas and Coal index has risen 9.3%, while the FTSE 350 has risen just 0.2% and the MSCI ACWI Climate Paris Aligned index has returned 0.1%, according to Morningstar Direct figures.

Some of the top gainers in the Oil Gas and Coal index include Centrica, which was up 8.4% in the five days to 23 September and Tullow Oil up 3.3%, Royal Dutch Shell up 3% and BP up 2.4% over the same time period.

“There have been some gains as far as the bigger energy providers are concerned given that the failures of smaller companies would extend their customer base significantly,” explained Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Countries’ climate action plans point to rise in emissions by 2030, UN warns

Harrison Williams, equity research analyst at Quilter Cheviot, agreed and said Centrica and E.ON were both “positioned well for further market consolidation”.

Both Streeter and Williams also thought some of the share price uptick was down to conjectures on the UK Government’s next move.

Streeter pointed to “speculation that the UK Government could provide extra funding for the bigger companies to take on stranded customers”. However, she expects that to be “short lived”.

Williams said a more long-term shift could be in the UK Government “tweaking or dropping entirely recent proposals for further increasing competition in the space with the proposals for opt-in switching from 2023 and a trial for opt-out switching to make it easier for consumers to find a cheaper deal.”

However, it is not just government policies on the sector itself that could lead to long-term boosts to the big oil companies. The shortage, not just in the UK, but across Europe and in Texas, has highlighted the need to re-think climate change proposals and incentives, according to Robert Minter, director of investment strategy at ASI.

“Many governments worldwide have sought to restrict capital flows to fossil fuel companies,” explained Minter.

Has the wind gone out of alternative energy?

He highlighted the global depletion rate of oil production is 5%-7% per year, which means if no investments are made into future production, the oil supply constricts naturally by five-to-seven million barrels per day.

“The plan of governments has been to restrict capital, allow oil supply to fall by this amount or more, and force users, the demand side, to shift to alternatives,” explained Minter. “While this is a ‘cheap policy’ that does not affect government budgets, it does nothing to incentivise people to demand more renewable energy.”

Clive Hale, chief strategist at Albemarle Street Partners, agreed that lack of investment was playing a significant role but said there were other important factors when it comes to the UK’s recent shortage including that France is short on power-generation and there has been a fire at the UK end of the under-Channel power cable,  “which will be running on much reduced capacity until next spring”.

So where next for government’s climate change policy?

“There has to be more focus on other alternative generation and energy storage sources that complement the intermittency to ensure energy security,” according to Richard Lum, co-CIO of Victory Hill Capital Advisors.

However, Streeter said it could be that gas is seen as “a vital transition fuel” going forward, particularly liquefied natural gas.

Streeter added the big oil companies are diversified in low carbon energy so “if gas proves a vital transition fuel as we move toward a lower carbon energy mix, then oil majors are in a position to capitalise on that short-term gain and future green investment at the same time”.

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Government signals extension to cap on energy bills

by with No Comment News

The Government has set out proposals for a shake-up in the energy market which it promises will save customers money.

New legislation is being planned to keep the energy price cap in place beyond 2023 “if needed”, it said.

The price cap on energy bills limits the amount some customers can be charged, if they are on their supplier’s default tariff.

It was designed to protect those who are least likely to shop around for better deals.

Since being introduced in January 2019, the price cap has forced bills down as suppliers race to attract more customers. Around 15 million households directly benefit, saving between £75 and £100 on their energy bills each year.

The Government is also looking at other plans which it hopes will increase competition.

They include trials to automatically move customers from expensive to cheaper deals, unless they opt out.

These will take place in 2024, the Government said.

It also plans to create a framework for opt-in switching, which would actively inform customers on expensive deals that they could be better off elsewhere.

A study by regulator Ofgem showed that customers who are contacted in this way are five to 10 times more likely to switch their energy supplier.

“We want to unleash a wave of competition within the energy market and keep energy bills low so households across the UK can keep more money in their back pockets,” said Business and Energy Secretary Kwasi Kwarteng.

“Although more of us are now shopping around for the cheapest tariffs, the existence of better deals on the market is not sufficient in itself to drive consumer behaviour. That’s why we will make the switching process even easier so we can tackle the ‘loyalty penalty’ and ensure everyone pays a fair price for powering their homes.”

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Government to tackle ‘subscription traps’, ban fake reviews and safeguard Christmas savings cash as it unveils new consumer protections

by with No Comment News

The Government has announced a new set of wide-ranging consumer protection rules, which will require Christmas savings clubs to safeguard customers’ money, firms to make it easier to cancel subscriptions and regulators to stamp out “dodgy tactics” used to lure online shoppers, plus much more. But the new rules won’t come into effect for a while yet.

The plans were initially revealed by the Government on 19 July before it today (20 July) launched a full consultation on them entitled ‘Reforming Competition and Consumer Policy’. The consultation runs until 1 October. Key proposals outlined include:

  • Changing the law so that Christmas savings clubs have to safeguard customers’ money. This will seek to protect savers in the event a scheme collapses (as happened in 2006 when approximately 120,000 customers lost a combined total of £40 million in the Farepak collapse).
  • Strengthening the legal requirements for subscription contracts. Firms will be required to provide clearer information at sign-up including around auto-renewals.
  • Making it illegal to pay someone to write, or host, a fake review. The Government says it’ll target “bogus online ratings”.
  • Helping regulators curb “dodgy tactics” used to dupe online shoppers. The Government says websites are increasing the collection and use of consumer data, and some are using this insight unfairly to exploit consumers’ behavioural biases, forcing them into purchases they would not have otherwise made.

We run through the proposals in more detail below. For more info on the current protections you get as a consumer, see our Consumer Rights guide.

Christmas savings clubs will have to safeguard customers’ money

In the consultation, the Government proposes to increase consumer protection by amending the Consumer Rights Act 2015. This means legislation would be added that will ensure any prepayments made by customers to schemes, such as Christmas savings clubs, will need to be safeguarded through insurance or trust accounts.

We are checking whether these schemes will also come under Financial Conduct Authority (FCA) regulation and whether payments will be protected by the Financial Services Compensation Scheme (FSCS) too and we will update this story when we know more. See our Are my savings safe? guide for more on this.

Firms will need to make info on subscriptions and auto-renewals clearer

Firms will need to make it explicitly clear in the early stages of the subscription process and immediately after the person places their order, that they are signing up for a subscription service; explaining the contract terms and price per billing period, whether the contract will auto-renew and the minimum notice period for cancellation.

Firms will also need to offer customers a clear choice, making sure they are actively choosing the subscription service. They’ll also have to introduce reminders for customers when the contract is set to renew and make it easier to cancel, for example, by only requiring a consumer to put in essential information and making the process easy and straightforward. This will also need to include providing:

  • The date on which the contract will auto-renew or roll-over, and for how long.
  • The current price of the contract and the price following renewal or roll-over.
  • Any notice period for cancelling the auto-renewal or roll-over and details on how to cancel.

But the Government proposes to exclude any contracts for goods, services, and digital content from the proposals, where an interruption in supply could result in serious harm to consumer welfare. For example, this would likely involve excluding contracts for the supply of medicine or for certain financial services, such as insurance. From 1 January 2022, car and home insurers will be banned from charging renewing customers more than newbies under separate FCA action.

It’ll be illegal to pay someone to post a fake review

The Government says it is considering whether to amend its list of unfair practices to include:

  • Commissioning a person to write and/ or submit fake consumer reviews of goods, services, or digital content. Or;
  • Commissioning or incentivising a person to write and/ or submit a fake consumer review of goods or services.

But there are exclusions – within the consultation, the Government said it would not consider a review fake if it reflects the expert’s, influencer’s or consumer’s genuine experience or impartial opinion of the good or service.

‘Dodgy tactics’ used to dupe online shoppers will be stopped

The Government says it will crackdown on “dodgy” practices online including:

  • “Dark patterns”, which manipulate consumers into spending more than they wanted to;
  • “Sludges”, where businesses pay to have their product feature highly on a retailer’s website while hiding the fact they paid for it;
  • And “drip pricing”, where traders use an appealing headline price to entice customers, then load on additional, unavoidable charges before you reach check-out.

Mediation will be mandatory for firms in the used car and home improvement sectors and there will be speedier resolutions

Arbitration or mediation will be made mandatory for firms in the used car and home improvement sectors. This means consumers can use ADR schemes to resolve issues directly, rather than going through court.

The consultation also proposes halving the eight-week wait that consumers currently experience before they can approach an ADR, such as an ombudsman. The Government says this is so businesses are incentivised to resolve customer disputes more quickly and consumers are faced with less stress and financial pressure.

MoneySavingExpert has been campaigning for over four years for this change – read our full story on the proposal for further information.

The CMA will be given new beefed-up powers to impose penalties

The consultation proposes that the CMA should be able to impose fixed penalties of up to 1% of a business’ annual turnover, as well as being given the power to impose an additional daily penalty of up to 5% of daily turnover while non-compliance continues.

Penalties for individuals would remain capped at £30,000 along with the possibility of a daily penalty of up to £15,000 while noncompliance continues. It will also be able to fine unscrupulous traders that breach consumer law up to 10% of turnover.

In addition, the watchdog will be able to enforce consumer law directly rather than going through a court process, block a wider range of harmful company mergers, and disqualify company directors if they lie to it.

The idea behind this shake-up is to make it quicker and easier for the CMA to secure refunds from companies for consumers. The CMA has received around 100,000 complaints relating to refunds since the start of the pandemic, for example.

Source: https://www.moneysavingexpert.com/news/2021/07/stronger-consumer-protections-competition-watchdog/

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Retrofitting leaky homes would cost £5bn over next four years, UK ministers told

by with No Comment Green Energy UKNews

Renovating the UK’s draughty homes to low-carbon standards would cost the government only £5bn within the next four years and would create 100,000 jobs, cut people’s energy bills, increase tax revenue and bring tens of billions in economic benefits, the construction industry has estimated.

Sector leaders have written to ministers proposing a new “national retrofit strategy” that they say would boost a green recovery in the UK and put Britain on track to meet its climate targets.

The proposal comes ahead of the government’s heat and buildings strategy, which is expected to be published soon. Decarbonising the UK’s homes, which are among the leakiest in Europe, and which produce nearly one-fifth of the UK’s carbon output, is a pressing issue as the government seeks cuts of 78% to greenhouse gas emissions by 2035.

Gas boilers will have to be replaced with heat pumps, district heating systems and possibly hydrogen systems, and homes will need loft, window and wall insulation. But the task is huge, and a plan has so far been lacking, with the green homes grant – an insulation scheme launched to fanfare last year as a way to build a green recovery from the Covid-19 pandemic – having been scrapped after a disastrous six months in operation.

In a letter to the business secretary, Kwasi Kwarteng, signed by more than 50 organisations and seen by the Guardian, the Construction Leadership Council set out a strategy that would help people to save more than £400 on their energy bills each year, and improve the health of those in fuel poverty.

“If the UK is to meet our world-leading carbon reduction targets, create jobs and level up, we must address the energy and water efficiency of our 28m homes. Our strategy is a blueprint, endorsed by the construction industry and beyond,” they wrote.

A government-led programme for refurbishing houses between now and 2024 would “support the levelling-up agenda, generate government revenue of more than £12bn, provide additional GDP of more than £21bn and unlock £11.4bn of private capital,” they added.

As well as a short-term strategy for this parliament of recruiting tens of thousands of people to install insulation and low-carbon heating systems in more than 850,000 homes, they propose a long-term strategy that would refurbish all of the UK’s homes by 2040. This would cost £524bn in total, of which the government would need to invest £168bn, and would create 500,000 jobs.

According to the construction industry’s strategy, this would require a mix of policies, including green mortgages to provide the finance for people to install low-carbon heating, stamp duty rebates on refurbished homes, reduced VAT on home improvement works, and loans to landlords to improve their properties.

Low-income households would need government grants, and those on higher incomes should be given access to low interest loans and council tax rebates, paid for by central government, the Construction Leadership Council said. Ministers should also act quickly to enable companies to start training employees and new recruits in the skills needed, the companies said.

“Wide-scale domestic retrofit is essential to the net zero agenda and backing a long-term strategy will help position the UK as global market leader in the low carbon economy ahead of the UN climate change conference [Cop26] in November,” the organisations added.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “We are already investing in making our buildings more energy efficient, and in order to meet our world-leading commitments on carbon emissions, we are gradually transitioning away from fossil fuel boilers and incentivising the take-up of low carbon alternatives as appliances are replaced, in a way that is fair, affordable and practical. To encourage energy efficiency and lower people’s energy bills, we are considering a range of options put forward by stakeholders and plan to launch a call for evidence to test what will work best for consumers in the UK.”

The government has said that people would not be fined for using their existing gas boilers, or refusing to switch to a low-carbon heating system, and that no one would be prevented from selling their homes if they do not meet energy efficiency standards, as some media reports have claimed.

Jenny Hill, the head of buildings and international action at the Committee on Climate Change, the government’s statutory adviser, said the industry’s proposed strategy was in line with the government’s net zero target. “This report shows a can-do attitude and a clear vision by the construction industry,” she told the Guardian. “It has all the different elements that are needed to come together: skills, consumer education, compliance and enforcement, performance standards, and a framework for market certainty.”

Public backing for the move to low-carbon heating would be essential, Hill added. Many media reports have focused on the difficulties of switching away from gas boilers, and the cost of low-carbon alternatives such as heat pumps. However, without a comprehensive programme for domestic housing there is little chance of meeting climate targets.

“It’s a condition of success that the negative impacts are minimised, that this is fair and equitable, and that people have a say in the process,” said Hill. “This transition definitely can be done in a sensible way that supports people and listens to their concerns.”

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Water company United Utilities to sell £65M renewables business

by with No Comment Business Utilities NewsEnergy NewsNews

Water company United Utilities has put its renewables energy business up for sale.
The decision to market the group’s renewable energy business, United Utilities Renewable Energy Limited, was taken in April and the sake process is expected to commence during June 2021. United Utilities said it will involve the sale of assets – primarily property, plant and equipment – with a carrying value of £65.5 million.
The company said the sale will mean it can continue to benefit from the output of the renewable energy assets over the long term, while being able to reinvest sales proceeds in other low carbon projects. The company said in its annual report, “Our portfolio of renewable energy assets is operating satisfactorily and our investment has delivered the returns that we targeted. Having maximised the opportunities to date and established long-term contracts to secure a proportion of our renewable energy out to 2045, we are now looking at how we can recycle our investment in order to achieve further strong returns and take the next steps in our plans to achieve net zero by 2030”.
In 2019/20 UU generated the equivalent of 191GWh of renewable electricity, an increase of 18GWh on the previous year. It did this with a mix of generation from wind, hydro, solar photovoltaics and energy recovery from bio resources (using sewage sludge to power combined heat and power generators).
The renewables business includes a 1MW floating solar array at Langthwaite reservoir near Lancaster, installed in 2018. Last year it installed a 2MW battery alongside solar panels at its Clifton Marsh wastewater treatment works near Preston. The batteries at were provided by Zenobe Energy.

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Commercially viable electricity from nuclear fusion a step closer thanks to British breakthrough

by with No Comment Energy NewsGreen Energy UKNews

Scientists appear to have solved the exhaust problem for compact fusion power plants, making them more economically-viable.

The dream of pollution and radiation-free electricity derived from nuclear fusion could be a step closer to reality thanks to a breakthrough by British scientists.

They have developed an exhaust system that can deal with the immense temperatures created during the fusion process and which so far have limited the viability of commercial fusion power plants.

Initial results from the UK Atomic Energy Authority’s MAST Upgrade experiment suggest that the world-first could mean developing fusion energy becomes easier.

Producing electricity using a fusion reactor is still in the experimental stage but experts have said fusion energy – based on the same principle by which stars create heat and light – could be a safe and sustainable part of our energy supply in the future.

A fusion power station uses a machine called a tokamak to enable hydrogen atoms to fuse together, releasing energy that can make electricity.

But fusion reactions can produce a lot of heat and, without an exhaust system to handle this, materials need to be replaced more often.