ENA Bulletin 18 October

Issue 279: Tuesday 18 October 2011

  • ENA at the Party Conferences

  • ENA is “the hub” says Hendry

  • The strange case of changing government policy

  • ENA keep up pressure on metal theft

  • Winner of the Pylon Design Competition announced

  • All change on Labour’s front bench

  • Brussels update

  • Forthcoming events organised and/or supported by ENA

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ENA at the Party Conferences

The role of the networks in engaging the consumer was the key theme of ENA’s Party Conference fringes this year. The events were attended by a large number of party delegates, Energy Select Committee members, Shadow Ministers and journalists. The Fringe meetings theme at all three Party Conferences was Smarter networks: empowering the people?

We kicked off our events in Birmingham at the Liberal Democrat Party Conference. Chris Huhne’s Parliamentary Private Secretary Duncan Hames MP spoke about the crucial role for the networks in empowering the consumer. In an impassioned analysis of the energy landscape Mr Hames said Customers were currently “being held over a barrel of commercial tyranny” and he called for the opening up of the retail market and a stronger role of Ofgem. Describing a smarter future he said there was a “crucial role of networks making direct reference to the need to smooth the load curve to deliver more efficient and cheaper energy”.

There was a big focus on the supply side of the energy sector at the Labour Party Conference in Liverpool. Labour Leader Ed Miliband said energy suppliers had “defied the laws of gravity for too long”. Focusing on the costs issue, he declared war on the liberalised energy market, saying it was “rigged”.

Meanwhile ENA’s fringe event showed how networks could help deliver lower costs for consumers within the current market.

Labour Shadow DECC Secretary Meg Hillier MP said smarter networks were an opportunity to empower customers to change the way we use energy as a country – empowering customers to take control of their consumption and reduce their costs. She understood that customer behaviour was crucial and we can help them do this by improving design and technology to make it smarter.

Labour Member of the Energy & Climate Change Select Committee Barry Gardiner MP said there seemed to be a tension between better and more empowered customers and the need for it to happen remotely via smarter networks. Meg Hillier announced that a smarter future does raise concerns around data but this can be overcome and must be to deliver a low-carbon future.

Also speaking at the event was fellow Energy Select Committee member Dr Alan Whitehead MP. He stated that “smart meters were only as effective and efficient as the grid itself, therefore a smarter network is the answer”. “We need to be more effective in how we use existing infrastructure and only build in what we need”, he added.

Our final fringe event at the Conservative Party Conference in Manchester was our biggest, with over 80 attendees. The event was also heated with a large number of questions from delegates. The focus of this fringe was very much around the ability of smarter networks to improve affordability and the need for smarter customers to interact with it.

Steve Johnson CEO of Electricity North West said the stringent targets set to decarbonise energy generation, heat and transport were simply not achievable without smarter networks. Crucially he said we need smarter customers too, which means we must talk to them differently and ensure they are more engaged and empowered. We must make this easy for them. He said we couldn’t rely on the ‘big six’ to deliver this. The networks and others will have a vital role here. 

 Also speaking was member of the Energy and Climate Change Select Committee Dr Philip Lee MP who said smarter networks have the potential in terms of the shift within our homes to be bigger than the internet. He said a “smarter network will make our energy usage more sustainable, secure and affordable”.

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ENA is “the hub” says Hendry

Energy Minister Charles Hendry described ENA as “the hub” for co-ordination and focus on the work coming out of the Low Carbon Networks Fund. The ever busy and ubiquitous Mr Hendry was addressing ENA’s Well Connected event last Monday. It was attended by an array of the energy industry, as well as Parliamentarians and regulators and was held at London’s Supreme Court. Also speaking in his first duty as new Chairman of ENA was Steve Johnson CEO of Electricity North West. He said “we could save the consumer £16 billion if we embrace a smarter network future”. The figure came from a Report commissioned by ENA from Imperial College London. Steve Johnson told the large gathering that the relationship between the networks and the consumer is going through “a profound change”. He went on to say that this would mean network companies engaging with consumers to ensure that the full benefits of a smarter network were realised.

Charles Hendry reinforced this message when he said that the “real prize of smart meters was a smarter network”. He said this could manage the network infrastructure “in a more constructive way” and either “defer or reduce” investment in the networks.

Steve Johnson made clear that “massive investment was still needed and that those investment decisions need to be made today”. Acknowledging this the Minister declared that smarter networks were “a key part of delivering the Governments energy policy”. ENA were “the hub” for discussion and coordination of the Government’s £500 million Low Carbon Networks Fund he stated.

The Minister said that gas still had “a long-term role” and “we must be clear now what that role will be”. He said that a major component of this was bio-gas whether injected directly into people’s homes for heat or for electricity generation.

The Imperial College London Report can be read here.

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The strange case of changing government policy

Back in September a letter was leaked to the Daily Telegraph. The letter was from Ben Moxham the Prime Minister’s adviser on energy and climate change and what it had to say was potentially explosive. He asked the ‘what if’ question that is on many people's lips and what now seems even more resonant. He said if gas prices are low in 2020, the cost of policies promoting nuclear and renewables would be high. In that scenario, he went on to say it would not be cost effective to pursue these policies. But if gas prices are high, reliance on nuclear power and renewables “could conceivably” be better for consumers. He said opinion was divided over the future direction of gas prices but that it was “certain that there will be variation over coming years”. With the International Energy Agency estimating that there is potentially 250 years worth of shale gas available around the world this could nudge gas prices in the downwards direction.

He also questioned DECC’s assumption that many energy efficiency measures will be taken up without subsidy, whereas “we believe a large number of measures will need to be subsidised given the hassle factor and other barriers to consumer uptake”.

Back in September all was denied from Number 10. Since then, however, a narrative may be discerned as forming around some of the policy signals from Government on energy and climate change policy. The Chancellor is taking a lot of interest in this policy area at the moment and the most senior Conservative Energy Minister, Charles Hendry has rightly expressed concern about what level customers bills will be at next March. The Chancellor’s speech at the Conservative Party Conference did nothing less than reverse the ever increasing targets journey, began by Tony Blair 10 years ago. No more would we be leading Europe on climate change but just keeping in line. This should all be seen in the context of the current debate. A Prime Minister’s summit this week to focus on energy costs, whereby the increased emphasis on energy security and the relative silence of the Prime Minister on the ‘Greenest Government ever’ crusade started on the second day of this Government.

There are a lot of green campaigners who are becoming a little disillusioned. But take heart, there is a way to engage the public on this agenda and deliver something that will help everyone. In his letter back in September Mr Moxham asked whether more can be done to further consumer energy efficiency to offset price rises and if policies supporting high-cost technologies like offshore wind can be opened up to minimise costs. The key to the solution to this is a smarter network and that is why ENA is making this a primary focus of our work.

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ENA keep up pressure on metal theft

Speaking at our Well Connected event last week Charles Hendry reaffirmed his commitment to ensure something is done about metal theft. The Minister sent out a clear message on the vital issue. He had taken part in a cross-Government Ministerial level meeting on the issue on 14 September. He said metal theft had been “ignored for far too long”. He gave a strong commitment that “something would be done by Government” to address it. He had also discussed the issue in a Commons debate at the beginning of September led by Labour Whip and MP for Hyndburn Graham Jones.

Our campaign to create a cashless scrap metal industry model that has a proper and rigorous licensing regime continues. We have been invited to address a follow-up meeting to the cross-Government Ministerial meeting in September. This will be chaired by Home Office Minister Lord Henley and attended by among others Charles Hendry and Norman Baker the Transport Minister.  

With the stalwart and strong support of Charles Hendry we are confident that the momentum has now built up to a point where Government will act. However, we continue to work with a range of partners to increase the coalition of support and crucially keep the pressure on the Government up. It was only a matter of months ago that they were saying that legislation was unnecessary and that self regulation and greater detection were the only solutions on the table. So the battle is far from won.

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Winner of the Pylon Design Competition announced

“Supermodel pylon replaces nude giant girls” was the way the Daily Mail put it as the winner of the Pylon Design Competition was announced last Friday. They were referring to the poem by Sir Stephen Spender where he described pylons as striding over the landscape like ‘nude giant girls’.

It was won by Bystrup's innovative T-Pylon design. This was unanimously agreed by the judging panel as the winner of the Competition run by the DECC, National Grid, and the Royal Institute of British Architects.

As a result of this contest National Grid will now work with Bystrup to develop their T-Pylon design further. National Grid has also said it wants to do further work with Ian Ritchie Associates on their Silhouette design, and New Town Studio's Totem design.

The Pylon Design competition was launched on 23 May and the six finalists were unveiled on the 14 September at the Victoria and Albert Museum.

There are more than 88,000 pylons in the UK, including 22,000 on National Grid's main transmission network in England and Wales. These stand some 50 metres high, weigh around 30 tonnes and carry up to 400,000 volts of electricity over thousands of kilometres of some of the most exposed, weather-beaten parts of Britain – but the familiar steel lattice tower has barely changed since the 1920s.

The judging panel was made up of:

Chris Huhne – Secretary of State for Energy & Climate Change

  • Nicholas Winser – Executive Director of National Grid

  • Sir Mark Jones – Master of St Cross College Oxford and Former Director of the V&A

  • Sir Nicholas Grimshaw – Architect

  • Bill Taylor – Architect 

  • Chris Wise – engineer

  • Jonathan Glancey – Journalist

  • Andrew Grant – Landscape Architect

  • Jim Sutherland – Scottish Power

  • Ruth Reed – Former President of RIBA

The Full range of finalists’ designs can be viewed here.

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All change on Labour’s front bench

Last week saw the first reshuffle without the restrictions of the Shadow Cabinet elections. In the past, Labour leaders have always had to choose their Shadow Cabinet from those who are successful in a ballot of fellow Labour MPs. Although, this rule did not translate into Government it restricted the Leader in his choices in opposition. Ed Miliband proposed it be abandoned and the Labour Party Conference duly approved this. The following week Mr Miliband made his changes. This had a major impact on the DECC team. Meg Hillier was replaced by Caroline Flint as Shadow Secretary of State and Huw Irranca-Davies was replaced as Shadow Energy Minister by Tom Greatrex. So from the old team only Luciana Berger and Baroness Angela Smith remain.

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Brussels update

New EU energy infrastructure legislation

ENA expects a new EU Infrastructure Regulation to be published by the European Commission tomorrow, Wednesday 19 October. These formal legislative proposals follow up on the EU Infrastructure Blueprint energy policy outline published last year.

ENA has been actively working with the Commission on this dossier, and supports what we understand to be the key proposals, namely:

  • Seeking to streamline/speed up permitting processes, whilst still taking account of the democratic public approval processes in place in each Member State;

  • A one-stop-shop for planning decisions on major European projects of common interest;

  • Consideration of regulated tariffs and the proper reflection of costs and benefits in the tariffs; and

  • The development of core criteria for projects of ‘Common Interest’ which would attract some central EU funding, to leverage more finance from the private sector.

The Energy Commissioner is presently seeking €9.1 billion from the EU budget to help finance these EU energy infrastructure projects. However, we know that the budget discussions will be even more difficult than usual in the light of the current economic climate, so there is no certainty on this point.

The energy networks face a huge infrastructure challenge to meet the 2020 and 2050 renewables and climate change targets. If these proposals will help address the widespread permitting (EU speak for planning) delays and encourage a supportive regulatory framework, this will help us all.       

Our understanding is that smart grids have been nominated a ‘priority’ corridor in the new legislation, and DSOs named as potential project developers, which is good news since many smart grid challenges will manifest themselves on the low voltage distribution networks, and not transmission. The distribution networks have considerable scope for the application of smart grid technologies such as power electronics and communications systems, in particular to allow for higher penetration of distributed generation.

Eurogas 2050 roadmap

ENA attended the Eurogas annual conference in Brussels last week. ENA are Associate members of Eurogas.

The star discussion item at this well attended conference was the launch of their 2050 Roadmap, which sets out the route to achieving an 80% reduction from 1990 levels of CO2 emissions, by 2050.

Eurogas no doubt hope to influence the Commission’s thinking. DG ENER’s own Energy Roadmap to 2050 is expected to be published soon.

The Eurogas Roadmap focus is on the residential and transport sectors.

As far as the residential and services sectors are concerned, this new roadmap assumes rising building renovation rates, a trend towards smaller sized city dwelling, the completed roll-out of smart meters, and more stringent energy efficiency measures between now and 2050.

As far as the industrial sector is concerned, the main driver is expected to be fuel substitution, assuming the continuing competitiveness of EU energy intensive industries that will stay within the EU’s borders.

With passenger transport – a role is foreseen for biogas. The key drivers are expected to be fuel switching, car sharing, and long distance train journeys (CNG short distance, LNG longer distances).

For power generation, Eurogas foresee a move to more renewable energy, and backup support from natural gas to 2030, post 2030 CCS should come into play. Natural gas should see its market share rise from 20% to 25% by 2030.

Overall Eurogas expect their market share to go up by 2050, whilst total volumes will go down slightly.

DG ENER views on 2050 perspective 

The Commission was well represented at every session of the Eurogas event, and they gave some hints of what we might expect to see when in their Energy Roadmap 2050, which is due to be published next month.

DG ENER speakers stressed that the Commission does believe in a future for gas, has worked hard with the industry to create a competitive EU internal gas market, and is looking to develop and reinforce its relationships with external gas supplier countries, hence the new EU external energy policy and legislative proposals published by the Polish Presidency in September.

But the climate change threat is real, and there is a need to deal with both upstream and downstream issues e.g. look for greater energy savings via the new Energy Efficiency Directive, and ensure liberalised and competitive markets through the full implementation of the 3rd energy package.

The DG ENER roadmap to 2050, essentially a policy document with a range of possible scenarios, will be followed up by binding legislation in due course.

EU new external energy policy to ensure transparent energy market

The European Commission believes that to keep the EU gas sector attractive to investors there must be a transparent energy market. Commission speakers at the Eurogas event accepted that there is a role for long-term commercial gas contracts between companies, working alongside a liquid deep spot market. However, DG ENER believe there are legitimate concerns regarding some intergovernmental agreements, and hence the recently published EU external energy policy Communication, with proposals that these governmental details should be disclosed to the Commission and to other Member States.

EU external energy policy, as detailed in the new Communication, is focused on diversifying gas supplies, in particular the development of the Southern Corridor route as an alternative to Russian gas. At the same time, the Commission is at pains to make it clear it wants to build on and re-enforce the EU’s relationship with Russia and other Eastern bloc countries.

The EU Communication has already generated a deal of public debate and discussions still to come in both Council and Parliament are likely to be quite heated. However, the Polish Presidency, which runs until the end of November, have this as their number one energy priority and will aim to make real progress before they have to hand over to the Danes in January 2012.

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