energy

Energy prices to soar again as Jeremy Hunt rejects pleas to halt rise

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Not a good story for energy inefficient rural settings, this article tells us:

Chancellor Jeremy Hunt has rejected calls to prevent sharp rises in domestic energy bills for all households in his March budget – meaning millions of users will see costs soar by about 40% from April.

Instead, Hunt will emphasise the extra support he is giving to the poorest and most vulnerable households, including those on benefits, in what he will describe as a more fairly targeted system of support.

Demands for the Treasury to halt a planned rise in the energy price guarantee (EPG) – the discounted cost of gas and electricity to consumers – from £2,500 to £3,000 a year for the average household in the March budget have been growing in recent weeks, particularly as the wholesale cost of energy has been falling.

Because an additional £400 of extra government help with energy costs for all households, made in monthly payments since October, also ends in March, the effective rise for all but those on the lowest incomes will be about 40%.

Calls for Hunt to stop the rise in the EPG have been led by consumer champion Martin Lewis, founder of the website MoneySavingExpert.com, who has said the move would be an obvious “rabbit out of the hat” that the chancellor could afford to pull out of his red box in March.

The Labour party has also been calling for the rise in the EPG to be stopped, and for the extra costs to the government of doing so to be met through the proceeds of a more punitive windfall tax on the vast profits of energy companies.

Calls for windfall tax as North Sea oil and gas profits soar

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Here was I thinking changing times had done for the likes of these big oil and gas giants….With more homes off grid in rural settings these rising costs are likely to hit rural dwellers hardest. This article tells us:

Bumper shareholder payouts, soaring profits, booming asset valuations: the oil and gas industry has bounced back from the depths of the pandemic with a vengeance.

After a difficult 2020, when plunging demand led in some cases to negative prices, crude recovered in 2021 and wholesale gas prices have soared in Europe and the UK. Gas has risen as much as tenfold to new all-time highs, due to factors including low storage capacity, strong Chinese demand and low wind generation during the summer.

BP boss Bernard Looney said recently illustrated this bonanza when he said the oil and gas giant has become a “cash machine”. North Sea oil and gas companies are expected to report near-record cashflows of almost $20bn (£14.9bn) for the current financial year, according to industry experts at Wood MacKenzie.

The revival of the industry’s fortunes has spurred calls for a windfall tax on North Sea producers, with the proceeds used to subsidise energy bills for households facing a cost-of-living crisis. The Liberal Democrats first made the call last week, and Labour also took up the call at the weekend. Rachel Reeves, shadow chancellor of the exchequer, said: “There is a global gas price crisis, but 10 years of the Conservatives’ failed energy policy, and dither and delay, has created a price crisis that’s being felt by everyone. We want to stop bills going up.”

The Conservative former energy minister Chris Skidmore has also publicly backed the idea, which has been rejected by the government.

Shell, the world’s largest producer and trader of liquefied natural gas (LNG), said last week that profits would be higher than expected thanks to high prices.

Unlike gas that arrives via pipelines from fields in the North Sea, LNG is shipped across oceans to the highest bidder, meaning companies like Shell benefit from surging global prices.

Cool running: supermarket fridges could help power UK

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If you’ll pardon the pun this is such a cool idea! The article tells us:

Supermarket freezer aisles could soon help power the National Grid after trials found that hundreds of thousands of fridges could provide a nationwide “virtual battery”.

The trials were undertaken by Tesco along with researchers at the University of Lincoln in a mocked-up supermarket, built to test whether fridges can help to balance the energy system.

Researchers found that complex algorithms, developed by the software firm IMS Evolve, can temporarily cut the electricity supply to fridges when needed while still keeping the food cold.

These mini power cuts to the freezers could automatically create short pulses of extra electricity on the grid to match any dips in the grid’s energy frequency.

The system operator already pays firms that own utility-scale batteries to provide this service but the trial indicates that retailers can also play a role, while at the same time reducing their carbon footprints.

Professor Simon Pearson, of the University of Lincoln, said: “Cold food is, in fact, the UK’s largest battery. There is sufficient ‘cold energy’ in the food to keep a refrigerator cold if the system reduces power for short periods to help offset power shortages on the National Grid.”

Every industrial fridge is turned off at least once a day as part of a standard defrost cycle to remove ice buildups in the system.

“Our work effectively replicates a defrost cycle but matches the timing of the cycle to the power availability on the National Grid,” he said.

HS2 plans to sign sweetheart wind farm deals would breach procurement rules, Tory peer warns

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I think the on shore wind farm subsidy regime has historically little to commend it and this article raises my suspicions further. It tells us:


Proposals to power High Speed 2 using wind farms would breach official procurement rules, a Tory peer has warned ministers.

Viscount Ridley, the science writer and former businessman, claimed that a plan drawn up on behalf of the government owned-body building the railway involved a “hidden subsidy” that would ultimately be passed onto taxpayers or added to the cost of tickets.

The peer’s intervention came after The Sunday Telegraph revealed how a strategy document commissioned by the Government proposed powering the controversial rail line using onshore wind farms spanning the equivalent of 19,000 football fields.

The strategy set out prices that would be pre-agreed with energy firms, at rates…

Fate of UK’s nuclear plants in doubt over ageing infrastructure

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This is an interesting story, demonstrating the need to re-start the investment plans for new nuclear or to put more “umph” into other sources of energy. It also raises the question of what we are to do with the sites (in rural settings in Kent, Somerset, Lancashire and Cleveland) when the power plants close. Lets hope they’re not going to be left as off limits danger zones due to the cost of clearing them up properly. Sounds like this issue is getting closer to the top of the long policy grass sooner than expected……

Britain’s nuclear power stations recorded a 12% decline in their contributions to the country’s energy system over the past month, as outages raised concerns over how long the ageing plants will be able to keep operating.

A temporary closure of two of the country’s eight nuclear plants resulted in a double-digit drop in nuclear generation in January, compared to the same period last year.

Prospects for new nuclear projects have commanded headlines and government attention in recent weeks, with Hitachi and Toshiba scrapping their plans for major new plants.

But the fate of the existing plants, which usually provide about a fifth of the UK’s electricity supplies, has been pulled into focus by outages due to safety checks and engineering works running over schedule. Nuclear outages also push up carbon emissions because any capacity shortfall will typically be replaced by fossil fuel power stations.

UK households pick up £80m bill left over from failed energy firms

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In rural communities where energy is proportionately more expensive this is a depressing story, it tells us:

British households face an £80m bill to cover the costs of transferring more than half a million customers from bust energy firms, raising questions over whether the regulatory regime is fit for purpose.

Eight suppliers have ceased trading this year amid rising wholesale prices, forcing energy regulator Ofgem to step in and appoint new suppliers. Four have collapsed in the past two months alone, including One Select on Monday.

Each of the UK’s 28m homes could have an average of £1.75 added to their energy bills to compensate the new suppliers, according to a Guardian analysis.

Ovo, ScottishPower and other suppliers who have taken on customers of failed firms can recoup some costs through a mechanism known as “Supplier of Last Resort”, ultimately paid for by all consumers via their bills.

Those claims will take months to settle, but there are historical figures that provide a guide to the bill awaiting consumers.

Co-Operative Energy successfully claimed £14m for taking on the 160,000 customers of GB Energy when it went bust in 2016, implying the cost for rehoming 551,500 residential customers in 2018 would be £48.2m.

Industry experts said the number was credible, and could be higher still depending on the credit balances held by the collapsed firms. An initial application for compensation by one supplier this year would indicate a bill more like £76m.

Even taking the more conservative figure, the amount all households are liable for looks likely to be about £80m, or nearly £3 for each annual energy bill, once renewable energy subsidies left unpaid by failed firms are counted.

Regulator sorry for not capping UK consumers’ energy bills sooner

Bearing in mind the energy premium for rural dwellers this article will be of interest to Hinterland readers. I wonder how much attention the regulator pays in its thinking to the process of rural proofing?

The head of the UK energy regulator has said he will not receive his bonus, as he came under pressure from MPs who accused him of being a passive bystander and failing to prevent millions of customers from paying over the odds.

Dermot Nolan said he would not get his £15,000 bonus this year as he admitted he had not acted quickly enough to help households get off the most expensive tariffs or impose price protections for them.

The chief executive of Ofgem apologised to vulnerable customers for not capping their bills earlier. He also said the decline in the percentage of people on poor-value default tariffs had not been as dramatic as he hoped.

Rachel Reeves, the chair of the business, energy and industrial strategy select committee, said: “It’s not about what you hoped for, you’re the regulator for the energy companies. My children hope for lots of things from Father Christmas; they can hope, they don’t have much impact on what Father Christmas delivers in their stockings.

“But yours isn’t about hope; you are the regulator, you are the person who is delivering or supposed to be delivering on this. The whole language you use is like a bystander, rather than an active participant in the market.”

Peter Kyle, the Labour MP for Hove, said: “Your testimony sounds so incredibly passive. Do you ever roll your sleeves up and really get stuck in? I don’t see any evidence of that.”

Nolan replied: “I apologise if I seem passive, I honestly do not feel passive … I wish we had moved earlier in putting price caps in.”

Millions of EDF customers face second price rise this year

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Very bad news here once the summer is over for vulnerable older people in rural England…..

Millions of EDF customers will be hit with the second hike in their energy bills in four months, prompting criticism from the government as it prepares to step in to protect consumers.

From 21 June, 1.5m households on the supplier’s dual fuel standard tariff will be paying 8.5% or £91 more a year than they were before March.

The rise will strengthen Theresa May’s hand for the regulatory intervention that she has threatened.

A government spokesman said: “This price rise, branded ‘difficult to justify’ by Ofgem, will hit around half of EDF’s customers.

“It’s another sign the market isn’t working, and we will shortly set out proposals to help energy consumers as part of the government’s Plan for Britain.”

The French firm blamed the increase on rising wholesale energy costs and government policies paid through bills, which include schemes to alleviate fuel poverty and support low carbon power.

Five of the big six energy companies have raised their prices in recent months, with only British Gas promising to freeze them until August.

Government considering plans to make 7 day switching a reality across more markets

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For too long, consumers have stayed with their energy companies, phone providers and banks because they think switching would be too cumbersome and difficult. New evidence published this week shows that consumers appreciate quick and reliable switching, on an agreed date. Currently, there is no consistency between sectors on how long it takes for consumers to switch from one service provider to another that offers them a better deal. The government is now taking the first step towards consistently quicker switching across all major services by setting out proposals which could allow consumers to switch provider in a week or less. The government is asking consumers and industry for evidence of how these proposals could be implemented and new rules could be in place as soon as next year. The call for evidence looks at how long it takes for people to switch providers across a number of markets, including energy, broadband, mobile phones, current accounts and mortgages, and asks what more could be done to speed the process up. The document also seeks views on a range of other proposals to help consumers, including requiring that customers should be able to cancel contracts online if they signed up for them online. Government will meet with industry bodies in the coming months to discuss how the proposals could be taken forward. Consumers will also be able to unlock their phone at the end of the contract for free after agreement has now been reached with major mobile providers. This means it will be easier to change providers, but keep an existing handset. Overall, handset owners spend an estimated £48 million a year unlocking their phones.

Business Secretary Sajid Javid said: “I want to give consumers more power over switching providers for the services they rely on to make sure they are getting the best deals. The government is committed to creating a system that works for consumers and makes markets more competitive. “At the moment the time it takes to switch depends on which service you are switching. I want to hear what consumers and businesses think of making switching quicker and more consistent across all markets.”

Culture Secretary John Whittingdale said: “We are more reliant on broadband and phone services than ever before. So we want it to be as easy as possible for consumers to spot the best deal for them, and switch providers quickly and easily if they want to. The measures we are introducing will help make sure consumers are better informed about the quality of these services and the switching process is much simpler. Also, in those cases when things don’t go right, automatic compensation will be paid out.”

National Grid seeks back-up supplies

I read this as code for the fact that a confused energy policy has left us scraping the barrel….

The UK power industry has provided more electricity generation after a request from the National Grid.

There had not been a risk of electricity supplies being disrupted, it said.

National Grid earlier issued a Notification of Inadequate System Margin (NISM) as a result of multiple energy plant breakdowns.

“The market duly responded to this signal,” the company said.

The National Grid described the NISM as “one of the routine tools that we use to indicate to the market that we would like more generation to come forward for the evening peak demand period”.

An additional 500 megawatts had been requested between 16.30 and 18.30 on Wednesday

The company last issued a NISM in February 2012, and before that in 2009

When a notification is issued, generators with spare capacity can respond quickly, ramping up supply within the system

The National Grid said that if this failed to happen it had standby contracts with some gas-fired stations.

It also has “demand side management” contracts with businesses, which allow the grid to ask them to reduce energy consumption at specified times.

“More generation came forward and about 40 MW of demand side balancing reserve was ordered so the NISM has been withdrawn,” National Grid said.

The National Grid plans to increase significantly its use of demand side management to keep the system in balance.

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