ENA Bulletin 17 February

Issue 287: Friday 17 February 2012

  • ENA piling on the pressure on metal theft 

  • ENA at Scottish Affairs Select Committee

  • ENA point to “period of transition” as price control launched 

  • ENA hear Alistair Buchanan at the Parliamentary Energy Group

  • ENA to meet think tank who call for local ownership of networks 

  • ENA at Labour consumer regulator investigation launch

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

  • ENA SHE Conference 2012 

  • ENA Chief Executive chairs New Energy Economy conference with Energy Minister

  • Brussels update

  • Forthcoming events organised and/or supported by ENA 

______________________________________________________________

ENA piling on the pressure on metal theft

ENA was at the heart of a concerted effort to add further pressure to the Government last week to ensure the full package of measures ENA is calling for to stop metal theft are implemented.

On Tuesday 7 February we backed a crucial Commons debate on the issue that saw MPs queuing up to speak. ENA had played a crucial part in helping secure the debate and strongly supported MPs Graham Jones, Chris Kelly and Robin Walker who led the debate.

Following this on Wednesday 8 February, a critical meeting of the All-Party Group on Combating Metal Theft (for which ENA provides the secretariat) heard from the Home Office Minister Lord Henley as well as BIS Minister Mark Prisk and the Deputy Mayor of London Richard Barnes.

Earlier that day ENA spoke at a conference held by the Association of Chief Police Officers on metal theft where the Minister also spoke and announced further details on Government thinking.

This all followed an unprecedented number of questions on the issue to the Home Secretary on Monday.

MPs in the debate on Tuesday could not have been clearer. The cross-party unanimous message was that they ENA’s position on regulating the scrap metal industry. The motion had called for a “radical change” and that was what Graham Jones, Labour MP for Hyndburn reaffirmed. He called on the Government to go further in tackling the country's "epidemic" problem.

Opening the backbench business debate, he called for the introduction of a "robust" licensing scheme for scrap metal dealers.

"Industry is being hard hit by daily thefts and the general public are not only horrified at the escalation and cost, but disgusted at the theft of Britain's heritage; reports of war memorials being desecrated have shocked the nation" Graham said.

“Energy Networks Association claimed there had been a 700 per cent increase in thefts from the networks between 2009 and 2011” he added.

He welcomed the Government’s recent announcements but he said they missed “key elements that underpin the success of a cashless payments system”. A “robust licensing system” was also required to overhaul “the inadequate and flawed Scrap Metal Dealers Act 1964".

Shadow Home Office Minister, David Hanson echoed ENA’s message that "banning cash transactions, while positive, will not in itself solve the problem".

"Legitimate scrap yards will go cashless, but some yards, as has been said, will continue to take cash and to operate a black market", he told MPs.

Chris Kelly MP for Dudley South said: "I have even been told of a metal dealer's customer record book containing the name Mickey Mouse and the address Disneyland, Paris. That reinforces my view that metal is usually sold within a few miles of where it has been stolen".

Robin Walker MP for Worcester expressed concern that a straight ban on cash payments, in the absence of better regulation of the industry, could lead to an increase in black market metal recycling.

Home Office Minister, Lynne Featherstone said: “we want to cut out the easy, anonymous reward for metal thieves by banning cash payments for scrap metal and making it much harder for illegitimate dealers to trade in stolen metals by introducing a more rigorous licensing scheme".

There was strong support at the All-Party Group meeting on Combating Metal Theft. The Group heard from two Ministers of State – Home Office and BIS and the Deputy Mayor of London. The MPs and Peers present included MPs Graham Jones, Chris Kelly, Stewart Jackson, Margot James, Mark Garnier, John Spellar, and Lords Faulkner, Jenkin and Tope.

There was also a packed room of affected groups and scrap metal dealers. Groups as diverse as the Church of England, BT, Network Rail as well as major waste management companies like SITA UK and Jacquie Owen from Blackgates Engineering (one of only three specialist model engine makers in the world) were there to add their voice of support. There was also very strong support from the Deputy Mayor Richard Barnes AM.

Lord Henley said in addition to the measures already announced that he was also looking at including new powers of entry as part of the same package of amendments. Lord Faulkner had helped lead a debate on amendments to this effect the previous week, which had seen them fail by only six votes to get through. There was also very welcome support from Lord Taylor, the DEFRA Minister, who had announced that strong measures to deal with convicted scrap dealers through the waste management regime for which he is responsible. ENA members will know Lord Taylor from our Lords Reception last May.

BIS Minister Mark Prisk showed there is still a debate in Government over how far they are prepared to go but it was clear that events and public opinion were moving in the direction of much stronger measures. This is something not lost on the Home Office and the Bulletin understands Downing Street itself.
______________________________________________________________

ENA at Scottish Affairs Select Committee

Energy Networks Association told MPs on the Scottish Affairs Select Committee on Wednesday 8 February that the cooperation of all network companies was a vital component in ensuring that power is restored quickly even in difficult circumstances. ENA was speaking at a key session of the House of Commons Scottish Affairs Committee inquiry into the resilience of the Scottish grid alongside SPEN and SSE.

ENA told MPs that the gas and electricity distribution companies have mutual aid arrangements in place to assist in the management of localised extreme events by providing for the transfer of staff and resources between companies.

ENA also set out how electricity and gas transmission and distribution companies have an established emergency planning forum under the auspices of ENA that ensures key decisions on emergency preparedness are delivered.

Full details of the session can be read here.  
______________________________________________________________

ENA point to “period of transition” as price control launched

Ofgem announced the launch of the next electricity distribution price control review on Monday 6 February. This is the first under the new RIIO framework. It will look at the cost of running the regional distribution networks that take electricity from the national transmission network and deliver it to our homes and businesses.

Key to this new approach under the RIIO framework is understanding the needs of stakeholders in the networks. The price control will last for 8 or 9 years from 2015 and will need to account for an increase in renewables such as more people wanting to connect solar panels to their homes and greater electricity demand due to new technologies, such as heat pumps and electric vehicles.

ENA made clear that network companies are all about delivering a service to the public and know that customers hold the key to our energy future. The price control review provides an opportunity to innovate, which is welcomed in this period of transition as we prepare for our lower carbon energy future.

The networks are the enablers for this transition and combine the highest aspirations of public service with the commercial rigour to deliver it efficiently and cost effectively. As their relationship with the customer changes the networks will also need to help make a smarter future a simple one for end users.

As part of the price control review for the gas distribution network, ENA has facilitated regular meetings with Ofgem to help ensure a successful process that understands the needs of all involved. It is expected that ENA will undertake a similar role at this review.

Ofgem’s announcement on ED1 can be viewed here.
______________________________________________________________

ENA hear Alistair Buchanan at the Parliamentary Energy Group

MPs and Peers were treated to a display of the Ofgem Chief Executive’s command of the energy situation on Wednesday 8 February. He was speaking at a meeting of the All-Party Parliamentary Group on Energy Studies. ENA were there to hear him and ask about the role gas can continue to play in the mix.

Buchanan said that with French Presidential elections this year France could become “nuclear neutral” if the Socialists and Greens coalition wins. He said that at the moment the UK was exporting electricity to France and Holland.

In response to a question from ENA on the future of gas he said he was not convinced of the impact shale gas would have on European prices. This was an interesting view at the moment with many seeing a long-term downward trend in gas prices. He said a report on gas security would be published in May 2012.

Talking a day after the electricity distribution price control was published the Ofgem Chief said that his primary job was the regulation of the networks. This, he said was now innovation and consumer focused.

The scale of investment was considerable he pointed out. National Grid, he said would increase investment from £8.4 billion now to £23.9 billion by 2021.

Reflecting on the Electricity market Reform proposals he said he thought that to ensure clarity the Capacity Mechanism would be announced sooner than the expected 2015 date.
______________________________________________________________

ENA to meet think tank who call for local ownership of networks

An influential think tank said this week that there should be community ownership of local energy networks. The Government must radically overhaul the 'closed shop' energy market by unleashing the community energy sector, said a new publication from ResPublica.

The report, ‘Re-energising our Communities: Transforming the energy market through local energy production’ was funded by Friends of the Earth. It says that local people should be empowered to move beyond the status of “passive users and consumers and instead become producers and distributors of their own energy supplies”.

The Report said communities should have “the right or entitlement” to own their own local energy network. They went on to say that through upcoming reforms to the electricity market, communities should be entitled to bid for the ownership of their local network by contractually partnering with energy suppliers. They did not make clear how this might work. ENA have made contact with the Report’s author Caroline Julian to better understand this proposal.

The full Report can be read here. 
______________________________________________________________

ENA at Labour consumer regulator investigation launch

ENA attended the launch of a Labour Party investigation into consumer regulation on Friday 10 February. The investigation will be led by Ed Mayo, former Consumer Council head. Launching the investigation was Chuka Umunna MP, the Shadow Business Secretary. He said Labour wanted to have a full review reflecting the root and branch review of all policy areas.

The process will include hearings and will look at how all sectors are overseen and will include the energy sector redress and consumer regulation process.

Further details can be found here.
______________________________________________________________

 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.

Chairman: Les Guest, CEO NJUG.

Confirmed speakers from: Scotia Gas Networks, National Grid, J Murphy and Sons Ltd, National Underground Assets Group, and Balfour Beatty Utility Solutions (BBUS).

Invited speakers from: Transport for London, Virgin Media, Veolia Water, Office of the Scottish Road Works Commissioner, Staffs CC Roads & Highways, and the Department for Transport.

Sponsored by: J Murphy and Sons Ltd and BBUS.

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

For enquiries or further information on sponsoring, exhibiting, or attending contact: vanessa@sbgi.org.uk.

______________________________________________________________

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

Over many years the Annual SHE conference has become a hugely successful and popular 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 March 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.
_____________________________________________________________

ENA Chief Executive chairs New Energy Economy conference with Energy Minister

ENA Chief Executive David Smith will be chairing the morning session of the New Energy Economy conference on Wednesday 22 February.

Opening the conference, which will look at delivering the UK’s future energy needs, David will set out the key role the networks play in enabling smarter networks that will help reduce the cost to customers.

He will then chair the keynote session, which will hear from Energy Minister Charles Hendry on delivering the UK’s energy transition – a topic the networks are critical to as the facilitators of the low-carbon future.

Details of the conference are available here.
_____________________________________________________________

Brussels update

New EU internal market measures

Later this year the Commission will publish its overall review of the implementation of the 2nd and 3rd packages across Europe. As usual there will be some success stories and also some laggards. More intriguingly, the Commission is also understood to be working up some new energy policy proposals with regard to the future operation of Europe’s internal energy market.

A strategic review of the operation of the internal market is currently underway in Brussels, prompted in large part by Germany’s surprise decision last year, following Fukishima, to phase out their nuclear plant. Although Germany is confident it can replace nuclear with renewables, this decision presents some challenges to the German grid in terms of intermittency issues. In the wider European context, Germany is likely to be importing more energy from outside its borders, with potential implications for their neighbours’ energy security, and the delicate energy supply and demand balance between Member States.

The 2nd and 3rd packages were intended to deal with energy business structures, and to encourage greater interconnection through the creation of the ENTSO organisations, their Ten-year Network Development Plans (TYNDP) and EU Network Codes.

Last year’s Infrastructure Package seeks to address barriers to interconnection in terms of permitting and finance.

The 2050 Energy Roadmap published just before Christmas, sets out a variety of possible scenarios for the EU’s future fuel mix, to satisfy its 80–95% decarbonisation goal. The Roadmap will be followed up by new strategic policy proposals on:

  • The internal market (expected in October). 

  • Renewable energy (expected in April). 

  • Nuclear energy (date unknown).

It is too early to say what the Commission might propose for the internal market, it may be that there will be an attempt to wrestle some power away from the Member States, or, more realistically perhaps, the Commission may seek to encourage greater sharing of intelligence, with itself taking on an oversight role. The energy chapter in the Lisbon Treaty makes it clear that decisions on fuel mix are exclusively for Member States’ themselves to decide, so the Commission’s options in this area are very limited.

The Commission’s new internal market proposals are expected in the autumn. DECC has encouraged the Commission to think more strategically, for the longer-term, and in turn, we hear that DECC is reviewing what implications its proposals for electricity market reform could have for our European neighbours.

This will be one to watch.

EU Internal Energy Market – 3rd Energy Package implementation

Saturday 3 March 2012 is the final deadline, the last in a series of important deadlines that have now passed, for the EU’s 27 Member States to complete their implementation of the legislative proposals contained in the 3rd Internal Energy Package.

Some of us will recall that, back in 2008, difficult political negotiations were underway, focused mainly on the Commission’s proposals for business separation or ‘unbundling’ of transmission and competitive activities within a single vertically integrated group. The dust has now settled, and the process of approval and certification of every European TSO, in accordance with the criteria in the Electricity and Gas Directives, is nearing completion. For the UK, Scottish Power and SSE are seeking Article 9(9) derogations from the new Electricity Directive’s full ownership unbundling requirements, on the basis that these provide more effective independence for the TSO than another possible model, the Independent Transmission Operator (ITO) model. The Commission has the final say on all TSO certifications, so we await their decision.

2nd Energy Package – legal proceedings against the UK and Ireland

The UK has a proud record of thorough, and timely, implementation of European legislation, which has led to some criticisms in the past of ‘gold plating’. This makes it all the more surprising that legal infringement proceedings issued by the European Commission against the UK and Ireland, in respect of the arrangements for gas interconnectors between Ireland and Northern Ireland, and between Scotland and Ireland, have now been referred up to the European Court of Justice? This is the third stage, formal infringement proceedings don’t normally get this far.

The infringement relates to specific issues associated with the gas pipeline connecting Ireland and Northern Ireland not being fully ‘open’ to the market, so that gas companies in Ireland cannot trade directly with Northern Ireland, and vice versa. In addition, it is said that the pipeline connecting Scotland to Northern Ireland does not allow short-term services and lacks capacity for commercial trade.

ENA understands that the British and Irish Governments are in dialogue with the Commission, and are seeking to resolve all outstanding issues. Simply put, the UK and Irish Governments have not done what was promised and there have been some unforeseen delays in the implementation of the common gas arrangements (CAG) between Ireland and Northern Ireland. The situation is resolvable, and it is highly unlikely that any fines will be imposed, but it is an illustration of the Commission toughening stance on implementation, and is likely to take the same rigorous approach to the 3rd package.
______________________________________________________________

'The Bulletin' is ENA's free fortnightly round-up of key issues affecting the sector.

Visit http://www.energynetworks.org/news/bulletin/overview.html for the latest edition or sign up at http://www.sign-up.to/signup.php?fid=602&pid=4068 to become a subscriber.

For more information, contact Tony Glover on 020 7706 5122 or email tony.glover@energynetworks.org.

Follow us on Twitter: @EnergyNetworks
Connect with us on LinkedIn

Copyright © Energy Networks Association 2012. Copying, duplicating or reproducing this or any other issue of 'The Bulletin' without written consent will constitute an infringement of this work under the Copyright, Designs & Patents Act 1988. All rights reserved.

Any opinions expressed in the Bulletin or its attachments do not necessarily reflect the opinion of any members of ENA.