ENA Bulletin 18 April

Issue 291: Wednesday 18 April 2012

  • ENA highlight the potential for interconnection

  • ENA: clarification paves way for metal theft law in days

  • ENA Annual Review – feedback

  • Proposed new consumer redress power for Ofgem

  • ENA/SBGI Utility Seminar – Street Works Minister to speak

  • ENA SHE Conference 2012 

  • Brussels update

  • Forthcoming events organised and/or supported by ENA


ENA highlight the potential for interconnection

ENA hit the front page of the Guardian last week highlighting the potential for interconnection across Europe. The article written by Damian Carrington particularly focused on reaping the benefits of interconnecting with Iceland. The article centred on a ringing endorsement for interconnection from Energy Minister Charles Hendry. He spoke about his recent meeting with Iceland’s Ambassador to the UK and the discussions about the potential of benefiting from the country’s geothermal and hydro resources of power. With only 300,000 people there is a considerable potential for excess energy that could be exported to the UK. ENA also featured in the Daily Mail and took to the airwaves to further discuss the issue.

Interconnectors have the capability to address the trilemma of energy security, affordability and sustainability. From an energy industry perspective interconnectors will be important in enabling renewable energy by providing a solution to wind intermittency. They also add diversity to our electricity mix and strengthen security of supply.

In the European context, they enable more integration with the wider European energy market and bring the benefits of converged prices. For example, on Norwegian connection the use of clean hydro power from Norway can help reduce overall carbon emissions from fossil fuels. Interconnectors have an essential role to play in making best use of Europe’s renewable energy and allowing access to a European electricity grid.

For consumers the ability to link electricity supplies from the rest of Europe is good for competition in the market and will generally help to keep prices competitive.

There are currently 9GW of potential projects being considered and if they progressed would have to meet the full rigours of commercial scrutiny. The BritNed Interconnector between the UK and The Netherlands, completed in 2011has a capacity of 1,000MW and was the first to be built for 25 years. Currently the East West interconnector between the UK and Eire is under construction and is due for completion this year, it will have a capacity of 500MW. Meanwhile, an interconnector between the UK and Belgium Nemo is currently at the planning stage and could be operational by 2018 with a capacity of 1,000MW. In addition, another 1,000MW interconnector with Norway NSN is also at the planning stage and due for completion by 2018.

We have also increased our gas interconnection over the past few years. Since 1988 it has been possible for 25.5 billion cubic metres to pass through the UK from Belgium via Interconnector UK. The BBL pipeline connection to The Netherlands has a capacity of 16–9.2 billion cubic metres and the Langaled Pipeline to Norway opened in 2006 has a capacity of 25.5 billion cubic metres and there is also the Moffat Interconnector between the UK and Eire.

It is clear that the Energy Minister sees interconnection as a vital component of the UK’s energy policy going forward. The Scottish Government are also interested in its potential to underpin Scotland’s energy policy. ENA discussed this issue with Angus Robertson MP, the SNP Westminster Leader at our Well Connected event in Edinburgh back in March.

Interconnection has firmly been put on the UK’s energy agenda. With a diverse range of projects being considered it may be the word interconnector could soon have the same currency as smart.

ENA: clarification paves way for metal theft law in days

Yesterday the Government had a final opportunity to consider what ENA and others have considered a dangerous loophole that could see an exemption from the cashless system for itinerant scrap metal traders. This came as MPs considered Lords Amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill.

The Bill now includes welcome and essential changes to the law on metal theft. These include the banning of cash transactions and the lifting of the cap on fines and sentences for those caught stealing or accepting stolen metal. However, despite the efforts of Lord Faulkner in the House of Lords to remove exemptions allowing itinerant traders to continue to pay cash for scrap, they remain part of the Bill in its current form.

The Shadow Justice Secretary Sadiq Khan MP had tabled an amendment to close the dangerous loophole. ENA had constantly made clear that we considered it was a tragedy that the Government having come so far already was allowing this loophole to persist. However, at the eleventh hour reassuring words came from the Home Office. The Bulletin understands that the Home Office envisage that this will only cover a small group of itinerant traders, who are limited to collecting metal by means of visits from house-to-house and therefore any itinerant collector who collects scrap metal more widely would fall outside the definition of ‘house-to-house’ and would not be entitled to an exemption. This group of collectors are reliant on selling their metal into the scrap metal industry; when they do so, they will not be paid in cash.

As reported before the Government is committed to further legislation particularly in respect of how a new licensing regime would operate. This would also provide an opportunity to review the definitions in the current Act, which they believe currently constrict them.

A year ago it would have been considered impossible that we would have in a matter of days a cashless system for scrap metal dealers enshrined in law. We have called it a bold and significant step in tackling the crime of metal theft. It is.

ENA Annual Review – feedback

ENA has been getting some very positive feedback on our Annual Review and Guide to the Networks that we recently published. As mentioned in the Bulletin a few weeks ago it was spotted in 10 Downing Street. Although we haven’t had any feedback from the PM below is some of the positive feedback we have had from politicians from across the UK and Northern Ireland.
Ed Davey, DECC Secretary of State said it was “very useful”.

Scottish Liberal Democrat MP John Thurso said “I much look forward to reading it”.

Member of the Northern Ireland Legislative Assembly David McNarry said he found it “very interesting and informative”.

Welsh Assembly Member Rosemary Butler said “I shall read it with interest”.

If you haven’t had a copy of it yet copies can be requested from [email protected]

Proposed new consumer redress power for Ofgem

Back on 20 September last year Chris Huhne, the then DECC Secretary said the Government was considering giving Ofgem new powers to require energy companies to provide consumer redress “when consumers have lost out as a result of a company breaching a licence condition. Redress would include refunding customers directly or requiring the company to pay into funds that benefit consumers”.

We understand that Ministers are now considering this issue.

If these powers were granted we understand Ofgem would use the proposed power in conjunction with its enforcement powers and could order redress to be made to consumers as well as or instead of imposing a fine (although, as is the case now, the fine would be required to be reasonable to the circumstances of the case). Ofgem would have discretion to decide what form of redress is appropriate – this could include direct pound for pound compensation for measurable losses, good will payments where it is not easy or practical to calculate the losses to individual consumers, or public apologies. Redress would be in addition to Ofgem’s current powers to fine companies up to 10% of their annual turnover but would not be subject to a cap.

Should Ministers decide to proceed DECC will publish a consultation.

ENA/SBGI Utility Street Works 2012 – Street Works Minister to speak

The Street Works Minister Norman Baker MP will be the headline speaker at Utility Street Works 2012. He will give an update on Government thinking as well as launch a Safe Digging Charter.

The 1-day seminar is taking place on 26 April 2012 at the Institution of Civil Engineers, 1 Great George Street, London.

Building on the success of recent years, the event once again provides timely and topical presentations on all aspects of street works spanning policy and regulation, stakeholder interests, safety, partnerships, technology and best practice. This year’s event will also include inputs from English and Scottish regions.

In an Olympic year and with ever increasing pressure on utilities to replace ageing infrastructure in crowded urban environments – and with minimal disruption – the event provides an ideal opportunity to hear from experts in the field, to network with peers, and of course sample the supporting industry exhibition.

Speakers include: Les Guest, CEO NJUG, Office of the Scottish Road Works, Staffordshire CC Roads & Highways, Westminster City Council Commissioner for Transport, Scotia Gas Networks, National Grid, J Murphy and Sons Ltd, National Underground Assets Group, Balfour Beatty Utility Solutions (BBUS) and Morrison Utility Services.

Sponsored by: J Murphy and Sons Ltd and Morrison Utility Services.

Supported by: Utility Week, NJUG, PIG, SBWWI, and UKSTT.

For enquiries or further information on sponsoring, exhibiting, or attending contact: [email protected].

ENA SHE Conference 2012 – Wednesday 2 to Friday 4 May 2012

Over many years the Annual SHE conference has become the must attend event drawing large numbers from across the energy industry. The 2012 conference promises to deliver thought provoking discussions around worker involvement, occupational health and how we deliver safety in a high hazard industry.

The 23rd ENA Safety, Health and Environment Management Conference (SHE2012) will be held on the 2–4 May 2012 at The Guoman Tower Hotel, London and will be hosted by UK Power Networks.

SHE2012 will bring together health and safety professionals and trade union representatives within the energy industry along with Government policy makers, regulators and experts from outside the sector to discuss and debate best practice in the management of SHE issues.

Keynote speakers confirmed for SHE2012 include: Judith Hackitt (Chair, HSE), Basil Scarsella (CEO UK Power Networks), Ed Mitchell (Director of Environment and Business, Environment Agency), and Robert Davis (CE EA Technology Ltd).

SHE2012 Delegate Fees:

Members: £749
Non members: £849

To book your place at SHE2012, please click here.

Click here to view the programme.

Brussels update

EU Energy Ministers unofficial catch up

This week EU Energy Ministers are meeting in Horsens, Denmark, away from Brussels’ prying eyes and ears, for informal discussions. Two potentially contentious issues will be on the table.

Firstly, and inevitably, Ministers discussions will focus on the state of play on the Energy Efficiency Directive negotiations. Member States recently gave the Danish Presidency an open mandate to negotiate with the Parliament, but there is still understood to be a conspicuous absence of consensus between the various national Governments on a number of issues. The key question is can they support binding national efficiency targets, or binding measures? Most Governments are saying no to targets, but they also want the measures in the Directive as drafted by the Commission (and then strengthened by the Parliament) to be relaxed, and more high level, allowing for greater flexibility in the implementation, taking into account national circumstances.

The Commission, keen to broker a deal, and to get Member States to accept more ambitious measures, is understood to have offered to produce data supporting the contention that non action/limited action on energy efficiency savings now could result in a much higher final cost to Member States, in terms of higher energy imports, and the costs of building new generation, transmission and distribution infrastructure to meet the continuing high levels of customer demand.

The other hot topic, in the longer term, is that Ministers will review the 2050 Energy Roadmap, published just before Christmas, and it’s ‘no regrets’ scenarios.

The Roadmap contains a range of fuel mix scenarios, all focusing on 2030, which are consistent with the EU’s overall agreed objective of an 85% reduction in the 1990 level of emissions by 2050. The Commission’s view is that decarbonisation, although costly, could be less expensive than current policies, in the long run. They also want to promote an accelerated move from energy systems with high fuel and operational costs, to systems with higher capital expenditure costs, particularly for the grids and power plants, but lower anticipated fuel costs over time.

The Roadmap scenarios include:

  • ‘Business as usual’; 

  • Current policy initiatives (e.g. 3rd Energy Package implemented); 

  • High energy efficiency; 

  • High renewables; 

  • Delayed CCS; and 

  • Low nuclear.

The clear message coming though from all the scenarios is the need for higher levels of energy efficiency and renewables, and overall a growing reliance on electricity in every sector, including transport and heating.

We know that a new EU renewables strategy document is expected from the Commission this year, in May or June, reviewing Member States’ achievements to date, and proposing new policy initiatives for 2030, including potentially new targets. One focus will be on network access and development.

An EU policy document on the Internal Energy market, analysing progress to date and identifying areas where more needs to be done (a 4th package?) is also expected from the Commission later this year.

In addition, we hear that a new EU energy efficiency strategy document/Roadmap, directly following up on the 2050 Energy Roadmap scenarios, is also being developed by the Commission, due for publication in Q1 2013. This new policy document will outline the choices, on the one hand more binding measures e.g. large scale housing renovations, more CHP connections and hopefully policies focusing on the transport sector (at last), or, on the other hand, new binding national efficiency targets for 2030.

Given the antipathy expressed by the majority of Member States’ towards binding efficiency targets for 2020, you might think that 2030 targets for efficiency or for renewables will not be made very welcome. However, there is much to be said for giving energy companies, and their investors and regulators some longer term policy certainty, and this could be achieved perhaps by agreeing some indicative targets.

ENA chairmanship of GEODE Smart Grids forum

ENA has been following with interest the European Parliament and Council discussions on the Energy Efficiency Directive. On behalf of our UK networks members, we have welcomed the Directive’s aims and objectives for network regulation to provide incentives for grid operators to offer system services to network users permitting them to implement energy efficiency improvement measures in the context of the continuing deployment of smart grids. At the same time we have been working with the Brussels institutions on the detail of the text, to avoid any unintended consequences.

David Smith, ENA’s Chief Executive, has now been appointed Chairman of GEODE’s Smart Grids forum. GEODE is a pan European association that represents more than 600 independent electricity and gas distribution companies.

GEODE’s Smart Grid forum is currently addressing a range of European issues, including the roll out of smart meters, development of demand response market, and electric plug in vehicles. The forum next meets in London, at ENA offices, on 25 May.

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