Tory decision to drop social energy tariff ‘betrays most vulnerable’
The UK government has been accused of betraying the most vulnerable in society by seemingly abandoning support for a social tariff that would help households pay for their gas and electricity.
Fuel poverty campaigners were left angry after ministers failed to include plans for a social tariff from next spring in energy market reforms, despite commitments in two budget statements.
Jeremy Hunt, the chancellor, promised to consider a social tariff for energy bills in the autumn statement as part of a pledge to help vulnerable people.
In the spring statement earlier this year, the Treasury confirmed the government was “developing a new approach” to protect households from increasing energy costs from April 2024, including consideration of a social tariff.
Ministers appeared to abandon the plans by failing to raise the option of a social tariff – which would set the price of gas and electricity well below the cap on energy prices – in a wide-ranging set of reforms designed to strengthen the retail energy market after scores of suppliers went bust.
A spokesperson for the Labour party said: “This is typical of a government that makes promises and breaks them. They are more interested in protecting fossil fuel windfall profits than vulnerable households.”
Almost 100 charities and non-profit organisations have written to ministers calling on the government to move quickly to legislate a social energy tariff that would offer vulnerable households discounts on their bills. The plans also have the support of the energy industry and the sector’s regulator.
Peter Smith, a policy director at National Energy Action (NEA), a fuel poverty campaign group, said: “Failure to even consult on would be a betrayal of the most vulnerable in our society and create further distrust in the energy market.”
The NEA was one of 95 groups that signed a letter to the government earlier this year calling for a discounted, targeted tariff to be made available to people on existing means-tested and disability benefits, and the carer’s allowance, alongside “those still struggling with their bills but missing out on support from the welfare system”.
There is widespread concern over low-income, elderly and disabled people being cut off from energy supplies after being forced on to prepayment meters that they cannot afford to top up.
Earlier this year, Jonathan Brearley, the chief executive of Ofgem, said there was a case for urgently examining a social tariff that would limit the impact of extremely high prices for a defined set of vulnerable groups.
Social tariffs are common in the telecoms industry, and are also offered by many regional water companies – leading to calls for all energy suppliers to offer them, too.
Gillian Cooper, the head of energy policy at Citizens Advice, said: “A social tariff would protect millions of people from excessive energy bills and provide crucial certainty for people who need it most in a new era of high energy costs.”
“The government promised to introduce better targeted support by April 2024 but, with parliament now in recess time is running out. Without the introduction of more long-term targeted support, we’ll see the same crisis repeat every winter. The government must deliver on its commitment,” she added.
The Guardian
Rishi Sunak confirms energy security plans in Scotland
The prime minister has announced millions of pounds of funding for a carbon capture project ahead of a visit to the north east of Scotland.
Rishi Sunak emphasised the role the region will play in the UK’s wider energy security plans as he confirmed 100 new North Sea oil and gas licences.
The UK government said Scottish schemes would help it grow the economy and meet its 2050 net zero commitment.
But opponents say the Conservatives are “doubling down” on fossil fuels.
It comes as the party faces internal divisions over its green policies – such as the review over low-traffic neighbourhoods in England – with some MPs calling for a rethink.
Mr Sunak confirmed funding for the Acorn Project in St Fergus, Aberdeenshire, on the BBC’s Good Morning Scotland programme.
And he said the announcement meant the UK now had four clusters across that would help it transition to net zero in a new industry and strengthen energy security.
Mr Sunak told the programme it would support thousands of jobs across the UK and defended the new oil and gas licences as “the right thing to do”.
He added: “Even when we reach net zero in 2050, a quarter of our energy needs will still come from oil and gas and domestic gas production has about a quarter or a third of the carbon footprint of imported gas.
“So not only is it better for our energy security not to rely on foreign dictators for that energy, not only is it good for jobs – particularly Scottish jobs – it is actually better for the environment because there is no point in importing stuff from half way around the world with two to three times the carbon footprint of what we have got at home.
“That makes absolutely no sense.”
The prime minister also told the programme international events continued to have a bearing in the UK.
But Mr Sunak added: “In spite of us not directly importing a huge amount of oil and gas directly from Russia, we are still heavily impacted by what happens when energy supplies are weaponised by dictators because they are traded on a global market.
“It is just economically incoherent to say we are not impacted by that. Just look at anyone’s energy bill.
“That’s what happens in a globally traded market so it is important that we increase home-grown sources of energy to improve our resilience.”
BBC
Swimmers avoiding the water over fears of raw sewage on UK beaches
Almost a quarter of the UK’s sea swimmers may not take a dip in the ocean this year because of sewage dumping by water companies, according to a poll.
Sewage was dumped into waters near England’s most celebrated beaches for nearly 8,500 hours last year, analysis shows. A separate review earlier this year found there were 1,504 discharges in 2022 on beaches supposed to be free from such pollution.
Water companies have been under increasing pressure to clean up their act amid growing outrage over payouts of more than £2bn a year on average since 1991.
The poll, carried out by Savanta for the Liberal Democrats, spoke to 2,272 UK adults between 21 and 23 July. Just over 30% said they typically went sea swimming during the summer, and of these 23% said they would not this year because of sewage dumping by water companies.
More than two in five of the regular beachgoers also said they were less likely to visit the British seaside this summer because of sewage discharges.
The government has said it will allow the Environment Agency to impose unlimited fines on rule-breaking water companies. Penalties are currently capped at £250,000.
The Lib Dems have been calling for a sewage tax on annual profits and a ban on water company executive bonuses.
“Coastal communities are at the mercy of water companies who unapologetically discharge raw sewage into popular swimming spots,” Tim Farron, the Lib Dems’ environment spokesperson said. “This Conservative government needs to stop letting water companies off the hook and finally ban these disgusting sewage discharges and defend our tourism sector.”
The Guardian
The looming battle over pylons for green energy
The Great Energy Transition from fossil fuels to renewable energy has numerous dimensions: jobs lost and others created, electric vehicles, biofuelled planes, scrapped gas boilers and triple glazing.
But to those who live in rural communities near the picturesque village of Beauly, it means pylons and cables in four directions, a vast new substation, and the “Beauly buzz” that keeps some awake at night.
They are at the crossroads of a vast network of infrastructure being planned to bring power from where it will be generated within a decade, and to funnel it through the central Highlands towards the homes, businesses, hospitals and schools to the south where most of the demand is.
With a budget of £10bn, SSE Networks Transmission (SSEN) has a large share of more than £50bn that rewiring Britain is expected to cost. It is spending around two-thirds of its budget on sub-sea links, but it is the onshore links that are whipping up squalls of opposition.
Battles to protect scenic and environmentally sensitive areas from the march of ever-bigger wind turbines are now moving to pylons and cables.
And where these skirmishes used to be isolated to one or at most two communities affected by a wind farm, the campaigns are now strung along routes, like beacons.
From the north, one high-voltage line is planned to bring power 107 miles from a sub-station at Spittal near Wick in Caithness, across sensitive peatlands, past Sutherland’s eastern villages of Golspie and Brora, over the Kyle of Sutherland near Bonar Bridge and through Easter Ross to Beauly.
That’s in addition to a sub-sea cable that takes high-voltage current from Caithness to the coast of Moray.
From the west, a further cable has been approved to bring power from the Isle of Lewis and the offshore floating wind farms being planned for the Hebridean island’s north and west coast.
That cable under the Minch makes landfall at Dundonnell, south of Ullapool, and will run underground from west to east coasts, where a large plant will transfer its direct current (DC) to the alternating current (AC) on which the rest of the grid works.
DC loses less power over distance and takes up a narrower corridor of land when it is buried, but it costs a lot to transform it to and from AC.
Power is coming from the North Sea, through a further gigantic sub-station at Peterhead across Aberdeenshire, Moray and Nairn, with further substation infrastructure planned for New Dear and Blackhillock.
A further grid upgrade means pylons, cables and substations stretching south from Kintore through a substation planned for Fiddes and through Angus.
Going south from Beauly, a high-voltage line has been part of the national electricity grid since 2015.
The Beauly-Denny line became famous and infamous as the battle over pylons of up to 60 metres (197ft) through the central Highlands, at their most obvious to road and rail travellers at the Drumochter Pass north of Pitlochry, and connecting to the southern network at Denny near Falkirk.
That took 14 years in planning and disputes, including five years for a public inquiry. Approval was given with numerous mitigating requirements to compromise with communities who did not want to see pylons and nature campaigners who worried about habitat.
That route is 130 miles long. The scale of what is now being planned is roughly three times as big. And following public meetings along the routes through spring and summer, campaigners believe they can tie this in knots if they secure public inquiries.
Some want the planned routes re-directed, away from homes, or at least away from their homes, or the cables undergrounded or laid under the sea.
Others are not interested in mitigations, but want the industrialisation of the Highlands to stop, saying the developer has not proven a need for so much intrusion into the landscape.
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In the north of Scotland, transmission is the responsibility of a division of SSE, which was also a nationalised company as “the Hydro Board”. It re-shaped the map of the Highlands with vast hydro schemes, which brought power and people into the Highland glens, much of that in the 1950s.
SSE Networks Transmission has the task of designing that network, persuading regulators its plans are at reasonable cost and profit, and persuading the public to accept new grid connections across its extensive and environmentally-sensitive region.
Its regulator, Ofgem, wants to see evidence that the lowest cost options have been thoroughly explored. It speaks for the end customer, who will have the cost of this £10bn project added to bills.
But the lower the cost, the more the scheme relies on pylons, which is antagonising at least some of those who live nearby.
SSEN Transmission is not looking for sympathy, but its managing director Rob McDonald is looking for both UK and Scottish governments and energy regulators to step up and make the case more strongly for what the company is being required to do.
As local MPs and MSPs voice the concerns of constituents, Rob McDonald, managing director of the division, diplomatically reminds them that his job is to put into practice the consensus across governments and parties:
“These projects are really important in terms of delivering the UK and the Scottish governments’ climate change and energy security targets.
“This is a portfolio of projects which has been approved by the energy system operator and the energy regulator Ofgem, which is about delivering the UK’s energy ambitions.”
In other words, this is SSEN doing the work for others, and on a tight leash in terms of the programme’s profitability.
BBC
Will there be enough cables for the clean energy transition?
Crossing more than 700km of seabed between the Isle of Grain, south-east England, and Fedderwarden, north-west Germany, the planned NeuConnect electricity cable will enable the two G7 economies to trade electricity directly for the first time.
The £2.4bn project is one of several long-distance, cross-border cables, known as interconnectors, being developed around the world as the shift away from fossil fuels fosters a new era of international energy trading.
Construction on the project started mid-July, helping both countries to try to hit their “climate targets and boost energy security”, Miguel Berger, Germany’s ambassador to the UK, said in a statement.
Progress has not been smooth, however. The cable’s current anticipated start date of 2028 is four years later than initially planned, due in large part to delays in acquiring supplies of electricity cable. It is not the only such project to be held back.
A link between Denmark and Britain has been delayed by problems including “unforeseeable cable market congestion”, while a cable linking France and Spain across the Bay of Biscay is also running one year behind.
There are concerns that this pattern could be a taste of what is to come. Demand for interconnectors and other energy infrastructure such as wind turbines is growing rapidly, putting unprecedented strain on supply chains for electricity cable and the converter stations needed for connection to the grid.
Supplies of both are concentrated among relatively few companies, with high barriers to entry. The potential difficulty of securing raw materials such as copper, and a lack of skilled labour needed for factories, risk putting a brake on new supplies.
Manufacturing slots are booked up, and costs are climbing. “You’re in a dogfight”, says one senior wind industry executive, describing a scramble for converter stations.
“With companies already pointing to long lead times for key pieces of grid equipment, lack of supply chain capacity could become a major bottleneck,” warns Ben Backwell, chief executive of the Global Wind Energy Council, a trade association.
Government and industry must work together to add the necessary manufacturing capacity and make sure critical materials are available in the right quantities and at the right price, he adds. “Otherwise we run the risk of sleepwalking into shortages and cost squeezes that could delay or even derail the energy transition.”
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Strains are already starting to show. Rising costs of cables and converter stations have helped push up the budget for the delayed Bay of Biscay project from €1.75bn to €2.85bn. An insider at Inelfe, the project’s developer, points to HVDC “market saturation, due to the unprecedented demand for offshore wind and interconnection projects”.
National Grid, the FTSE 100 company that owns and runs Britain’s transmission system and is developing new cables to the continent, says it is “operating in a constrained market” driven by “a limited number of suppliers globally”.
“Demand is outstripping supply as other countries catch the UK up and push ahead with their own energy transition,” the company adds.
Danielle Lane, director of development for the UK and Ireland at German wind group RWE, says lead times for HVDC converter stations have jumped to up to seven years. “Availability is a significant risk,” she says. “We’re competing with grid operators as well as other developers.”
Those with the biggest buying power are flexing their muscles. Rivals bristled last month when TenneT, the Dutch-state-owned company which owns and runs electricity cables in the Netherlands and Germany, signed agreements worth €5.5bn for 7,000km of electricity cables from Nexans, NKT and others, for wind projects.
“I think this partially requires a national approach,” says Keith Anderson, chief executive of Scottish Power, the UK-based developer. “In Germany, they’ve pulled together a long-term plan which they can take out to the market to book manufacturing slots . . . where is the UK’s version of this plan?”
This is an extract of a much longer article. Click here to read the full story.
Financial Times
Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.