ENA Bulletin 21 May

Issue 293: Monday 21 May 2012

  • ENA Conference to be opened by Welsh First Minister

  • ENA call for more thinking on Government heat strategy

  • ... As Environment Agency Chair says shale gas has role

  • ENA shortlisted for two Awards

  • ENA encouraging MPs to take up metal theft Bill

  • ENA SHE Conference: The “golden thread” of health and safety

  • Queen’s Speech highlights

  • Mr Hendry gets a little too close to Mr Davey!

  • Brussels update

  • Forthcoming events organised and/or supported by ENA

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ENA Conference to be opened by Welsh First Minister

Recognition of the vital role our smarter networks of the future must play came last week with confirmation that the First Minister of Wales Carwyn Jones AM will open the ENA Annual Low Carbon Network Fund (LCNF) Conference.

The Conference runs from Thursday 25th October – Friday 26th October 2012 at the Wales Millennium Centre, Cardiff. It is fitting that the Conference takes place at the heart of the Welsh Government quarter and we are proud that the First Minister is going to open it.

This is a powerful endorsement of the critical contribution the networks must play to deliver a sustainable secure and affordable energy system. The First Minister has shown his commitment to energy issues by his leadership of the Welsh Assembly Government energy strategy. He also has a keen interest in the role smarter networks can play in Wales in delivering on this strategy. ENA recently met Welsh Energy Minister John Griffiths AM and the Welsh Assembly Government’s energy advisor Dr Ron Loveland.

This Conference follows the success of the inaugural LCNF Annual Conference last year in Newcastle. This is the only distribution network engineering conference so the opportunities to discuss and debate developments are unparalleled.

This year will include an update on the latest progress from the Tier 1 & 2 projects as well as introducing the recent successful Tier 2 bids to the industry such as how to use existing infrastructure more flexibly to increase renewable generation and how alternative methods of network reinforcement can boost their capacity.

The conference continues to grow and will also provide more opportunities to exhibit and promote the work of the networks and the companies working with them.

A full programme will be available in due course as well as details of how to book your place and accommodation.

If you are interested in exhibiting or sponsorship opportunities please contact events@energynetworks.org or call + 44 (0) 20 7706 5114.

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ENA call for more thinking on Government heat strategy

ENA will say this week that options shouldn’t be closed down when considering the future strategy for heat. This comes as we submit our response to the DECC Heat Strategy Consultation. In it we will say that while we agree with DECC that the UK faces a challenge to reduce emissions from heating and cooling we believe that any approach adopted should consider all technologies and fuels.

The DECC Heat Strategy document is useful from a strategic vision perspective, however it lacks any detailed analysis of the options and in particular the challenges of peak heat and what this means for investment in the UK’s electricity infrastructure.  Crucially it entirely ignores the key economic factors that must be taken into account in any strategy, especially considering the “Energy Trilemma” of balancing the three competing imperatives of carbon, costs and security of supply.

Our members also believe that policies developed should consider and evaluate consumer issues and address the challenge of the level of appetite of the UK public to make fundamental changes to the way in which they use heat.

The UK needs to develop a balanced solution to hit 2020 and 2050 targets, considering sustainability, affordability and security. ENA is in a unique position to address this in that we represent both electricity and gas network operators. As a result our various workstreams undertaken by our members are considering different electricity and gas scenarios and how the electricity and gas networks could be transformed as a result. Through the Low Carbon Network Fund projects, which ENA is coordinating, we are addressing the challenge of an all electric future while at the same time our members are undertaking work that looks at a more balanced approach to energy supply.

The UK’s existing gas networks currently provide the bulk of existing heat demand, however if, as proposed in the Heat Strategy, there is a  movement of this load to other networks (namely electricity and district heating) then DECC must take into account the seasonality of heat demand and the within day peaks on the electricity systems. There is also the issue of the significant levels of investment required in these new networks to meet these peak demands, especially with the increase in network loadings, due to the emergence of electric vehicles. 

ENA, as part of addressing the challenge of potential increased electrification, are considering how smarter management of the distribution network can mitigate these costs. As part of this we are working with electricity suppliers to better understand how demand-side measures coupled with a smarter network can reduce the need for large scale distribution network investment that would otherwise be needed. It is against this backdrop that we are addressing the issues raised in the Strategy.

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 ... As Environment Agency Chair says shale gas has role

In a bid to set out the potential energy independence of the UK, the Chair of the Environment Agency Lord Chris Smith gave a cautious endorsement of shale gas exploration in the UK a few weeks or so ago. “We cannot abandon either green or growth” he said. Not surprisingly this immediately got him in the headlines. The committed environmentalist was taking a bold step in supporting the controversial extraction process.

He said "Potentially, fracking ticks the box on energy security, on availability and on cost”. But does it tick the box on environment? He said the answer was complex, and is something like "up to a point".  However, Lord Smith believed that with careful use of the drilling technology, with rigorous monitoring and inspection, and with the development of a major programme of Carbon Capture and Storage for gas-fired power generation, “then shale gas could be a truly useful part of our energy mix in the years to come.”

Later in the House of Commons Energy Minister Charles Hendry said he “very much welcome[d] the comments made by the chair of the Environment Agency”. He said Lord Smith was “correct in assessing that, “subject to rigorous regulation and monitoring”, hydraulic fracturing can safely be used in the UK for shale gas exploration. He said he also agreed with “the need to proceed with caution. He said “fracking should be carried out only under close regulatory control, to ensure that risks are minimised and the environment is fully protected”.

The Minister went on to say that “we cannot ignore what is happening elsewhere around the world”. He said the gas price in the United States is now one quarter of that in Europe and one seventh of that in Asia, “so this is a game-changing technology” he concluded. However, he said this was a densely populated island.”We have to have public support for this technology going forward and we intend to go about this in a very constructive way, involving all the expert opinion we can”, he concluded.

As Lord Smith said himself there are some big issues to grapple with here. "It won't always be easy. There will sometimes be occasions where, in seeking one environmental objective, we risk upsetting another” he said. However, it seemed this passionate environmental campaigner felt the balance was in favour of UK shale gas extraction.

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ENA shortlisted for two Awards

ENA have been shortlisted for two awards in the forthcoming CBI Trade Association Forum Best Practise Awards. We have been shortlisted in two categories, Sector Representation and Big Society for our work on the metal theft campaign.

The Awards ceremony takes place on Thursday 28 June.

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ENA encouraging MPs to take up metal theft Bill

Even as we are nominated for awards for our work on the metal theft campaign the campaign still continues. This week saw the results of the ballot for MPs to put forward Private Members Bills in Government time. The Government is keen for one of these MPs to take on a Bill to bring the final vital measures needed to reform the scrap metal industry.

We celebrated the passing into law two weeks ago of a new cashless system for scrap metal dealers. We said then that this law change will make a great difference. However, more is needed to ensure the full benefit of a cashless system.

To ensure it is effective we need a new Scrap Metal Dealers Act (SMDA) that reflects Graham Jones' original Private Members Bill, which ENA had worked hard to support. In addition, the new Bill needs to clarify the definitions under the SMDA, which are antiquated and out of date. This is also how we will address the itinerant dealers issue.

Our other requirements for the new Bill include:

  • A robust licensing scheme for scrap metal dealers to replace the present registration scheme.

  • A licence fee to fund the regulation of the licence.

  • Greater police powers to close unscrupulous scrap metal dealers in line with alcohol licensing.

  • Police authority to search and investigate all premises owned and operated by scrap metal dealers.

  • Use of photo identification and CCTV to identify sellers of scrap metal, and their vehicles.

  • Vehicle badging for mobile scrap metal dealers.

  • Magistrates' powers to add licence restrictions and prevent closed yards from re-opening.

The cashless regime is the “jewel in the crown” of the legislation we called for. However, the new SMDA we expect to see shortly will provide the “crown” that supports this new system. Together they will deliver a fundamental reduction in this plague of metal theft that costs the energy sector £60 million a year.

On Monday 28 May we will celebrate with the Home Office Minister the success so far. Let’s hope by then we will have secured an MP to take forward this vital piece of legislation.

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ENA SHE Conference: The “golden thread” of health and safety

SHE2012 was held 2 weeks ago and it brought 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.

Human factors and the importance of worker involvement were highlighted as critical to delivering ongoing improvement in health and safety in the electricity industry.

ENA's 23rd Annual Safety, Health and Environment conference heard from a wide range of speakers including the networks, the generating companies, unions and HSE. They celebrated the successes in recent years and looked at the challenges ahead.

Basil Scarsella, Chief Executive of UK Power Networks, sponsors for this year’s conference, said "Safety is the golden thread that aligns the interests of employees with shareholders. It is paramount to individuals and critical to company's reputation. We need to keep our assets safe and our greatest assets are our people."

David Gartside, HSE Board Member, praised the work of Powering Improvement "Powering Improvement represents a very strong commitment to managing safety and the partnership approach has been key to delivering the success so far."

Dan Shears from the union GMB spoke of the importance of worker involvement to prevent incidents and praised ENA for holding such a good conference, "Reducing injuries is a joint problem requiring a joint solution. Workplaces where the workforce are involved in taking health and safety decisions are safer and healthier. The great thing about Powering Improvement is that this principle is implicit in everything it tries to achieve."

Peter McCormick, Powering Improvement Co-ordinator at ENA spoke with passion about his commitment to the initiative "Every SHE manager wants to avoid the dreaded knock on the door where they have to explain that their family member won't be coming home that night. Your commitment to Powering Improvement must come from the heart."

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Queen’s Speech highlights

The Queen’s Speech saw the announcement of three Bills of interest; an Energy Bill, an Enterprise and Regulatory Reform Bill and a Draft Water Bill. The Enterprise and Regulatory Reform Bill will introduce the Green Investment Bank. It also introduces workplace dispute resolution and provisions on directors pay. From a regulatory perspective the Draft Water Bill will introduce greater competition in the regulated water sector.

The Energy Bill implements the EMR as expected. One interesting provision will introduce a Strategy and Policy Statement that would set out the Government’s strategic priorities for the energy sector in Great Britain, describe the roles and responsibilities of bodies who implement or are affected by GB energy policy and describe policy outcomes which are to be achieved by the regulator and the Secretary of State when regulating the sector. An interesting question arises as to what this means for the role of Ofgem.

There was a bit of last minute confusion that led some to assume that the Bill may have been in peril. The rumours focused on a delay rather than a removal. Some were a bit quick off the starting block to condemn or welcome this. DECC were even quicker in dampening down the rumours. The reality turned out to be that they were publishing a draft Bill “in order to speed up its passage through Parliament and to enable pre-legislative scrutiny which will help make the legislation more robust”. They made clear that this would not delay when the EMRs are introduced. They said they anticipated legislation reaching the statute book by 2013 so that the first low-carbon projects can be supported in 2014.

Meanwhile the House of Commons Energy and Climate Change Committee announced that it will be holding an inquiry to examine the draft Bill with a view to reporting soon after the House rises for the summer recess on 17 July. They said this was to ensure that the Committee’s conclusions and recommendations can feed into preparations for the introduction of a real Bill in the autumn.

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Mr Hendry gets a little too close to Mr Davey!

Lib Dem MP Tessa Munt had a fit of the giggles on Thursday 17 May after the Energy Minister Charles Hendry inadvertently sat on DECC Secretary of State Ed Davey after answering a question at the despatch box.

Mr Hendry made light of the error, and joked, "Mr Speaker, the humour was because I inadvertently sat on the Secretary of State which shows our commitment to work seamlessly together in this coalition."

Commenting on the spectacle as he was called to speak by Mr Bercow, shadow energy minister Tom Greatrex said "Thank you very much Mr Speaker and I will endeavour not to accidentally sit on either of my frontbench colleagues this morning."

Humour is not dead at DECC Questions clearly!

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Brussels update

European transmission networks’ 10 year plan (TYNDP) and EU energy policy

ENA recently took part in a European Energy Forum dinner debate in the European Parliament, chaired by UK MEP Giles Chichester, looking at the relationship between EU energy policy developments, and the forward planning of the pan European electricity grid.

Daniel Dobbeni, President of European TSO Association ENTSO-E, and CEO of the Belgian system operator ELIA, gave the MEPs present a succinct and persuasive presentation of the European TSOs new 10-year network development plan - TYNDP 2012 - consulted on earlier this year, and due for official publication next month.

ENTSO-E membership, which includes ENA members National Grid, Scottish Power and SSE, totals 41 TSO’s in 34 countries, i.e. cross border interconnection means that its membership necessarily goes well beyond the current 27 EU Member States.

Mr Dobbeni stressed that the significant investments that TSOs are making in grid infrastructure have largely been triggered by EU political decisions on energy and climate policy objectives, on market integration, renewables integration, and ensuring security of supply. The TSOs are working to meet ‘society’s’ expectations.

The TYNDP 2012 comprises a central report or ‘vision’ for the European extra high voltage grid, six detailed regional investment plans, and a scenario outlook and generation adequacy forecast, underpinned by extensive scenario modeling.

The big change from the first, pilot TYNDP in 2010 is the top-down scenario 2020, built in accordance with the agreed climate and energy policy objectives, and the National Renewable Action Plans.

EU Infrastructure package – key networks issues

The European TSOs anticipate that €104bn investments in transmission networks will be required between now and 2020 to match the major shifts in generation mix and location. The International Energy Agency has estimated the investment needs in Europe’s distribution grid at €520 billion by 2035, being almost three-quarters of the total transmission and distribution grid investments. Granting appropriate incentives as well as lighter permitting procedures is thus of the utmost importance for distribution system operators as well as TSOs.

Looking at the projects identified in TYNDP 2010, one in three planned investments are currently experiencing delays in implementation, due to over long permitting processes. So ENTSO-E strongly supports the Commission’s proposals in the infrastructure package on the fast-tracking of key European projects, and, in particular, for a ‘one-stop-shop’ national planning authority, and a fixed 3-year time limit for permit granting procedures (with some clarity on when the clock starts ticking). ENA would strongly support this approach of a streamlined and accelerated planning process for approving all transmission projects, and would say it must also underpin the permitting of distribution level infrastructure projects.

For EU funding of energy infrastructure projects, we know that DECC think that very limited amounts of public financing should be needed, and really only in exceptional cases. The UK Government considers that the vast majority of projects should be able to attract sufficient private investments. This is a view that ENA would endorse, but the regulatory framework for our networks members must be appropriate and supportive, particularly in terms of the innovative and riskier projects needed to create smarter grids.

ENA’s DNO members’ focus, as far as the EU infrastructure package is concerned, is of the need to widen the eligibility criteria for smart grid projects to include so called ‘low voltage’ projects, since the majority of new generation, local renewables and other distributed and micro generation will connect at the distribution not transmission level. Innovating on a large scale and in pressurised timescales, work that the networks are already undertaking would certainly benefit from greater regulatory and financial support from the EU.

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