Npower loses over 260,000 customers in the third quarter of 2019

Big Six energy supplier Npower lost 261,000 customers in the third quarter of 2019, as large providers continue to haemorrhage clients to smaller challenger brands.

The figures take total customer losses for the year for the company, which is owned by German power giant Innogy, to 447,000.

Npower also posted a nine-month operating loss of €167m (£142.1), with expected losses for the whole year expected to hit €250m.

Innogy said that the decline was mainly driven by the introduction of the energy tariff price cap in the UK.

Chairman and chief executive Johannes Teyssen recently described Innogy’s loss-making UK retail operation as “an open wound that is bleeding profusely.”

Npower, which is Innogy’s retail arm, was recently bought by fellow German firm E.on, which warned that it would not tolerate a loss-making business for long.

According to energy market regulator Ofgem, profits at the UK’s six-largest energy suppliers shrunk by over a third last year.

Ofgem’s State of the Market report also found that 40 per cent of all electricity switching between July 2018 and June 2019 came from customers leaving Big Six suppliers in favour of smaller ones.

However, a report earlier this week found that last month 100,000 customers moved from small or medium sized firms to Big Six companies, suggesting the major players may have begun to turn the tide.

Peter Earl, head of energy at, said: “The Big Six have snatched the momentum from their smaller and nimbler energy rivals – but whether this is a longer-term trend or merely a blip remains to be seen.”

Innogy slashed its overall outlook on the back of Npower’s performance, saying it now expects retail profit to run between €200m and €300m, a €100m reduction on its previous range.

The news caps off a tough twelve months for the company, which last December was forced to call off a planned merger with SSE’s retail arm, which was subsequently bought by challenger brand Ovo.


Climate change: UK ‘has technology’ for zero carbon

Eliminating greenhouse gas emissions in the UK is achievable with current technology, according to a new report.

The Centre for Alternative Technology (CAT) said a net zero-carbon Britain is already possible, without relying on future developments.

The Powys-based charity said changes to buildings, transport and industry could help slash UK energy demand by 60%.

“We have the technology to combat climate change and we can start today,” said project coordinator Paul Allen.

The CAT report – Zero Carbon Britain: Rising to the Climate Emergency – also claims making further changes to energy, diets and land use could help provide 100% renewable energy and cut emissions from agriculture and industry.

That would mean the UK would not be reliant on “as yet unproven” technologies, such as carbon or air capture, said Machynlleth-based CAT.

Mr Allen said using alternatives to technology that is ready to be rolled out at scale was “not worth the risk”.

However, the UK government described carbon capture as a “game-changing technology” in addressing climate change and said the country’s first project should be operational next year.

Britain was the first major nation to propose cutting greenhouse gas emissions to zero, promising to do so by 2050.

Reducing energy use

CAT said more new houses should be built to high Passivhaus standards that can reduce energy costs to just £15 a year by using insulated masonry and concrete, triple-glazing, LED lighting and air-source heat pumps.

Some of these changes could also be fitted to existing buildings to improve temperature control and potentially reduce heating use by around 50%.

Transport energy demand could also be cut by 78% by increased use of public transport, walking, cycling and using electric vehicles while cutting flights by two-thirds.

Increasing energy supplies

Based on the past decade’s weather and energy use, it is possible to fully match the UK’s entire energy demand with renewable and carbon-neutral energy, the report claims, if CAT’s recommendations are carried out.

Half of that would be provided by wind while other sources suited to the UK climate – including geothermal, hydro, tidal and solar – would produce most of the rest.

Carbon-neutral synthetic fuels are also an important alternative to electricity, especially in some areas of industry and transport.

Transforming land and diets

Switching from meat and dairy to plant-based proteins, reducing food waste and improving agriculture could go a long way to cutting carbon emissions, the report said.

CAT says the UK can:

  • Reduce on-farm greenhouse gas emissions by 57% (compared to 2017)
  • Cut food imports from 42% to 17%
  • Use 75% of current livestock grazing land for restoring forests and peat-lands

“We can still have coffee, chocolate and tea in a zero-carbon Britain, but the UK currently imports many foods that we can easily grow here,” said Mr Allen.

“By changing what we eat and how it’s grown, and by wasting less food, we can reduce greenhouse gas emissions, increase resilience and improve health and wellbeing.”

CAT is urging politicians to come up with action plans with policy frameworks and large-scale investment as a matter of urgency.

Solar farms can keep UK’s lights on even at night

Solar farms could soon play a vital role in the energy system 24 hours a day, after a breakthrough trial proved they can even help balance the grid at night. National Grid used a solar farm in East Sussex to help smooth overnight voltage fluctuations for the first time earlier this month, proving solar farms don’t need sunshine to help keep the lights on.

Lightsource BP, the owner of the solar farm, said an inexpensive tweak to the project’s electrical equipment meant it could help balance the grid with only two seconds’ notice. Kareen Boutonnat, the company’s chief operating officer, said: “We have proven that solar plants can play a larger role across the electricity network. But this is only the beginning.”

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The breakthrough could mean that UK solar farms will soon help stabilise the energy grid at night, which could save £400m on grid upgrades or building new power plants. “Inverters” at the solar farm are usually used in the process of converting solar energy to electric current. But at night, when the grid is often less stable, the same equipment can adapt grid electricity to a healthier voltage.

Chris Buckland, technical director of Lightsource BP, said the inverter acts like a distortion mirror by reflecting the energy network’s voltage back to the grid at a slightly different level.

On blustery nights with plenty of wind power but little demand, the solar farm could help prevent the energy grid’s voltage from rising too high. It could also prevent the voltage from falling too low during still nights in winter when demand is often high.

Lightsource BP will carry out a second trial next month, and it hopes to strike its first commercial deal to help balance the electricity grid with National Grid next year.


Decision to suspend the Secure and Promote Market Making Obligation with effect on 18 November 2019

On 8 October 2019, we published an open letter seeking views on our ‘minded to’ position to suspend the Secure and Promote Market Making Obligation (MMO) in the event we released RWE from the Licence Condition. Following our decision to release RWE from the MMO from 30 October 2019, and having now considered responses to the open letter, we have decided to suspend the MMO with this taking effect on 18 November 2019.

This letter explains the reasons for our decision and provides an overview of responses to the open letter. To give effect to this decision, pursuant to the Special Condition, we have published a Direction to the relevant Electricity Generation Licensees alongside this letter.

Main document


World’s energy watchdog is undermining climate change battle, critics say

PARIS (Reuters) – A short walk from the Eiffel Tower, Fatih Birol oversees the world’s energy watchdog, whose analyses of fuel demand have long been viewed as the gold standard by government officials, energy executives and investors.

But now, the Turkish economist and the International Energy Agency (IEA) he heads are facing mounting pressure from groups concerned about climate change – including investors, scientists and former United Nations diplomats – over the organization’s widely watched annual outlook.

The World Energy Outlook, due to be published Wednesday, shapes expectations among governments, companies and investors over the future use of coal, oil and gas.

The critics say it underplays the speed at which the world could switch to renewable sources of energy. The result, they say, is to bolster the case for continued investment in fossil fuel companies, undermining the fight against climate change.

“The IEA is effectively creating its own reality. They project ever-increasing demand for fossil fuels, which in turn justifies greater investments in supply, making it harder for the energy system to change,” said Andrew Logan, senior director of oil and gas at Ceres, a U.S. non-profit group that promotes environmentally-friendly business.

Senior IEA officials say they share concerns over climate change but defend their organization’s work, saying the criticism is based on a misunderstanding of what the World Energy Outlook intends to show. They say the goal of the publication is to help governments assess the likely consequences of existing energy policies, not forecast what the world’s energy system will look like decades into the future.

The IEA — which is mainly funded by industrialized nations including the United States, Germany and Japan — advises governments on energy policy.

“If they criticize us, the only option that comes to my mind is that they don’t know exactly what we are doing,” said 61-year old Birol during an interview at the IEA’s headquarters in Paris last week. “They must be misunderstanding, or they must have been misled.”

IEA officials also say there is also some wishful thinking about how quickly the transition to cleaner energy could happen.

“A lot of times people want to believe there’s some simple lever that you push: ‘change the IEA and the world will be better,’” said David Turk, who had been a senior climate official in former U.S. President Barack Obama’s administration and now heads the IEA’s strategic initiatives office.


The IEA has long faced criticism from other energy analysts who say the outlook has failed to capture dramatic falls in the cost of solar power. Tim Buckley, a Sydney-based analyst at the Institute for Energy Economics and Financial Analysis think tank, said the cost in the United States had fallen to below $40 per megawatt hour this year but the last World Energy Outlook implied a current figure closer to $90.

The IEA says much of the dramatic expansion of the solar industry has been driven by policy changes in China, which the outlook was not designed to predict, and that projections in other areas had proved accurate.

The increased scrutiny of the World Energy Outlook shows how the once esoteric subject of energy modeling is becoming a focus of the mainstream investment community as worries over climate change intensify.

Concerns among fund managers about the implications for their investments escalated after the world’s climate scientists issued a landmark U.N.-backed report late last year offering a stark assessment of the likely consequences of rising global temperatures.

The report said the worst effects could be averted by limiting the temperature increase to 1.5 degree Celsius above the levels of pre-industrial times. That target is the most ambitious goal of the 2015 Paris Agreement, the global pact to curb global warming.

Birol was instrumental in developing the models used to compile the World Energy Outlook during his previous role as the agency’s chief economist. The outlook is published each year with a different cover featuring the yellow and red colors of Birol’s favorite soccer club, Istanbul-based Galatasaray.

The publication’s main report, or scenario, maps how demand for different forms of energy would evolve over the next couple of decades based on existing government policy commitments. Some critics say that because it doesn’t take account of the likelihood that governments will take more drastic action to curb emissions, it means projections will inevitably be conservative.

IEA officials emphasized that the outlook is not a forecast, rather it explores the implications of existing policies, which is made clear in the introduction.


Another scenario, called the Sustainable Development Scenario, aims to show how the global balance of renewable energy and fossil fuel would need to change to meet the temperature goals of the Paris accord, cut air pollution and expand access to electricity for the world’s poor.

Investors and climate activists are lobbying Birol to include a scenario that uses the most ambitious Paris Agreement target of a 1.5 Celsius increase. In the last outlook, the Sustainable Development Scenario implied warming of about 1.7 to 1.8 degree Celsius.

Investors say using the more ambitious target could spur a faster switch to renewables by showing the financial markets a path for meeting the goal.

Among those pressing Birol for that change is a group of institutional investors representing $30 trillion of assets under management, called the Institutional Investors Group on Climate Change.

In a previously unreported letter sent to Birol earlier this year, the group said that appropriate scenarios are important to institutional investors for understanding their exposure to climate risks and deciding how to allocate capital. The IEA’s scenarios “materially impact expectations for future investment returns,” the investors wrote.

Birol, who downplays the extent to which the outlook guides investment decisions, said the next World Energy Outlook takes the latest findings of climate science into account. The IEA in comments on its website last month said that it will explore a path with a 50% chance of stabilizing warming at 1.5 degree Celsius without relying heavily on still early-stage techniques for sucking carbon from the atmosphere.

The Sustainable Development Scenario will be “more stringent” than in the previous outlook, Laura Cozzi, the IEA’s chief energy modeler, told Reuters. IEA officials said it was very challenging to model a scenario of a 1.5 degree Celsius rise given the amount of existing fossil fuel infrastructure.


In April, Birol received a separate letter expressing similar demands from more than 60 signatories, including leading climate scientists and former UN climate chief Christiana Figueres as well as several large asset managers, including UK-based asset manager Legal & General Investment Management Ltd. and Sarasin & Partners LLP.

The letter also urged Birol to make clear that the outlook’s main scenario, which had been called the New Policies Scenario and reflects governments’ existing climate pledges, is a “business as usual scenario” that would lead to a rise of between 2.7 and 3 degree Celsius.

In the comments on its website, the IEA said it would rename its main report the Stated Policies Scenario to clarify it reflected existing commitments.

The groups pushing for change welcomed the name change but said they would study the new outlook when it is published to reach firmer conclusions.

Parliament sends 30,000 invitations for citizens’ assembly on climate change

 “Net zero is an opportunity, therefore, for people to not just explore ways in which the UK can end its contribution to climate change, but also create a cleaner, healthier environment as well as benefit from the opportunities around creating a low-carbon economy.”

Key themes to be discussed at Climate Assembly UK will include how people travel, what people buy and household energy use. The outcomes of discussions will be presented to the six select committees, who will use it as a basis for detailed work on implementing its recommendations. It will also be debated in the House of Commons.


Green energy: why wind power will never be the answer

Wind farms only work with permanent public subsidy. Subsidy comes in various guises. The most obvious is contractual where the operator receives a guaranteed rate for electricity generated or a guaranteed top-up on what he sells his electricity for.

Such subsidy is inherently neither problematic nor exceptional. Nuclear power is also heavily subsidised.

Read more: ‘The green energy debate: the case for onshore wind’

Wind power is problematic because of its nature. Because they depend on wind, wind farms generate electricity that is unpredictable, intermittent and unreliable. This is unlike nuclear power stations which produce a constant stream of electricity (baseload energy) or gas plants, whose output can be varied on demand (dispatchable energy).
Wind’s intermittency would matter less if electricity could be stored at scale. But batteries only store comparatively small amounts, and there is no prospect of affordable batteries for grid-scale storage in the foreseeable future.

Electricity can be stored as potential hydro-electric power by pumping water uphill into reservoirs for release when required, like the Cruachan dam which operates as an adjunct to the Hunterston nuclear power station. However, Scotland lacks enough suitable topography, as well as the political will and money, to turn glens into hydro-electric power reservoirs for wind farms.

With storage not an option, the only way to control wind’s vagaries is to accommodate it within the wider electricity system, using primarily gas and nuclear generators to provide dispatchable and baseload power when wind can’t.

Balancing it in the wider electricity system constitutes a further subsidy, for it requires upgrades and extensions to the grid as well as keeping gas plants running on stand-by (“back-up”). But using the grid and other generators to make up for wind’s shortfalls becomes more challenging and expensive, the more wind generation enters the energy mix.

Increasingly, the grid is unable to take electricity from wind farms during windy periods. Wind farms are then “constrained off”, the energy effectively wasted and their operators compensated – last year to the tune of £125 million.

While the precise causes of the August 9 blackouts in England, in which Hornsea offshore wind farm is implicated, remain unclear, they testify to the increasing fragility of a national electricity system struggling to meet the challenges of increasing renewable generation.

Read more: ‘The green energy debate: are wind farms really worth it?

Like other European countries, the UK has reformed its subsidy regime in response to galloping wind farm development, exploding subsidy costs and ever-rising consumer bills. Abolishing the Renewables Obligation in April 2016 sounded the death knell for new onshore wind farms.

The focus shifted to offshore wind farms, and the new Contracts for Difference scheme for their subsidy. A kind of reverse auction, it encouraged operators to put in unfeasibly low bids for the prices at which offshore wind farms would generate. While many have heralded the apparently huge drop in offshore costs, no wind farms have actually begun operating at this rate. Industry experts doubt they ever will, suspecting the low offers were a ruse to lock out competition and then blackmail the government on pain of bankruptcy if the price is not raised.

The days where developers saw a prospective wind farm as a licence to print money while policymakers extolled wind energy as clean, green and free are long gone. In the end there is no escaping the laws of physics and engineering, or economics.

In coming years, a great deal of money and attention will have to be spent on improving the resilience of an electricity system undermined by too many remote and intermittent wind farms, and on finding ways to pay the still escalating costs of their subsidy contracts. There will be little appetite for a second wind bonanza whoever is in power.


Two thirds of consumers think connected devices are “creepy”

Consumers are distrustful of how devices collect data about people and their behaviours and more than half don’t trust them to protect privacy.

Two thirds of consumers (65 per cent) are concerned with the way connected devices such as smart meters and personal digital assistants collect data, a new study finds.


A similar proportion think connected devices are creepy in the way they collect data about people and their behaviours and more than half (55 per cent) do not trust their connected devices to protect their privacy. More than half (53 per cent) also do not trust connected devices to handle their information responsibly.


Basic security concerns


The survey by Ipsos Mori on behalf of the Internet Society and Consumers International was conducted in the US, Canada, Japan, Australia, France and the UK.


The study noted that testing by multiple consumers organisations has found a range of products are rushed to market with little consideration for basic security and privacy protections.


The survey results show that more than three quarters of consumers (77 per cent) across markets said information about privacy and security are important considerations in their buying decisions and more than a quarter of people (28 per cent) who don’t own a connected device don’t buy smart products because of these concerns.


Consumers see this broadly as much of a barrier as cost.


“The survey results underscore the need for IoT manufacturers to build their devices with security and privacy in mind,” said Andrew Sullivan, president and CEO, Internet Society.


“Security should not be an afterthought. It’s clear that manufacturers and retailers need to do more so that consumers can trust their IoT devices.”


Those surveyed also believe that accountability for connected device concerns should sit with regulators, manufacturers and retailers.


Nine in 10 of survey respondents (88 per cent) said that regulators should ensure Internet of Things (IoT) privacy and security standards, while four-fifths of people (81 per cent) said manufacturers need to provide that assurance, and similar proportion said retailers must address privacy and security.

“Security should not be an afterthought. It’s clear that manufacturers and retailers need to do more so that consumers can trust their IoT devices”

“Consumers have told us they accept that they have some responsibility for the security and privacy of their IoT products but that isn’t the end of the story. They, and we, want to see tangible action from manufacturers, retailers, and governments on this issue.” Added Helena Leurent, director general, Consumers International.


She continued: “It has to be a collective effort, not the responsibility of one group. We are exploring this conversation with progressive manufacturers. Together we are looking at the opportunity to create person-centered technology, that people not only enjoy using, but feel safe and secure doing so. By doing this business can address the concerns of those not engaging with this tech, and open up the benefits of the Internet of Things to everyone.”


Founded by Internet pioneers, the Internet Society is a non-profit organisation dedicated to ensuring the open development, evolution and use of the Internet.


Working through a global community of chapters and members, the Internet Society collaborates with a broad range of groups to promote the technologies that keep the Internet safe and secure and advocates for policies that enable universal access.


BILL BLOW Energy bills could jump by £100 a year despite government cap on prices

The increase comes despite the upcoming introduction of the government’s new price cap in December, which promises to keep costs under control.

Energy regulator, Ofgem, has already signed off a £47 a year increase in its energy safeguard tariff for vulnerable consumers this coming winter.

But energy analyst Cornwall Insight is predicting that both tariff caps could rise by another £50 to £55.

This means that by April next year, we could be paying £100 more on our bills.

Gareth Miller, chief executive of Cornwall Insight said: “Household energy prices are set to continue to rise despite Ofgem’s safeguard tariff or the government’s default price cap.

“Only if wholesale costs fall sharply will the pressure abate.”

Why prices are continuing to rise

Analysts have regularly warned that Ofgem’s price caps will do little to stop energy bill increases.

This is because the level the cap is set at depends on factors such as wholesale prices. As long as these continue to rise, our bills will too.

Stephen Murray, energy expert at comparison website MoneySuperMarket explained: “The price of standard variable tariffs has risen by around £140 on average (from the big six) since the policy announcement of an energy price cap by the government in May 2017.