News September 2013

30 September 2013

Energy Investment

George Osborne has suffered a further blow to his credibility after global financial institutions such as Bank of America and the insurance giant Aviva accused him of driving away crucial investment in the energy sector. On the day of the Chancellor’s Conservative Party Conference speech, investors controlling more than £1trn of assets have strongly criticised him after he removed from the Energy Bill a clause that would have made Britain’s electricity supply almost entirely green by 2030. The attack comes as the Coalition government is said to be in talks to delay the implementation of a multi-billion-pound green scheme to help take the pressure off the fuel bills. It is reported to be considering agreeing to the demands to reform the home insulation scheme, the Energy Companies Obligation. But other investors have warned the Government must step up its commitment to the green agenda. The financial consortium is concerned that the Government has failed to signal a clear commitment to low-carbon energy, making it very difficult for potential investors to determine the risk associated with backing wind, solar and other energy projects. As a result, many are shying away from making important investments, they argue.

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Posted: 30 September 2013

29 September 2013

NuGen

CHINA’S state nuclear technology developer is in talks to buy land earmarked for new atomic reactors in Sellafield, Cumbria. It is understood that State Nuclear Power Technology Company (SNPTC) will go ahead only if it receives assurances from Whitehall that it will one day be able to build Chinese-designed nuclear stations in Britain. The deal was raised in talks last week with Ed Davey, the energy secretary, who is on a 10-day visit to China. SNPTC is building the first version of its new reactor, the CAP 1400, in China. It is understood the company wants a government pledge that it will help guide the new design through Britain’s regulatory approval process. SNPTC is considering joining the Nugen project, which was set up in 2009 by Iberdrola, the owner of Scottish Power, along with France’s GDF, and SSE, the utility. Nugen bought a large parcel of land next to the Sellafield toxic waste dump with plans to build up to six reactors. SSE pulled out two years later. Iberdrola informed GDF last year that it too would no longer proceed. Toshiba’s Westinghouse has recently entered talks to buy out Iberdrola. SNPTC would likely be a purely financial partner in Nugen.

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Posted: 29 September 2013

28 September 2013

Politics

George Osborne tells the environmental lobby today that Britain should not be “in front of the rest of the world” in tackling climate change. In an interview with The Times, the Chancellor dismissed as a gimmick Ed Miliband’s pledge to freeze energy prices, but he signalled that he could ease green measures if prices continued to rise. “I think we have to keep a very, very close eye on the affordability of energy prices going forward,” he said.

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Posted: 28 September 2013

27 September 2013

Energy Costs

Leaders of consumer and energy groups have rallied to support Ed Miliband’s proposals to freeze prices and shake up the power market, saying his initiative had exploded outdated ideas that radical reform was not necessary or possible. As Centrica and SSE saw their share prices hit hard for the second day in a row, Adam Scorer, director of policy at the independent organisation Consumer Futures, said he did not accept the threats from the big six power companies that a shake-up could lead to the lights going out and investment drying up. Co-operative Energy said it too disputed claims by the big six that investment would be chased away by the uncertainty of a price freeze and the breakup of vertically integrated power companies. Ramsay Dunning, general manager at Co-operative Energy, added: “We believe by increasing competition through more diversity of generation and supply, this will open up investment opportunities from outside this cosy group. This could include the crowdsourcing of finance from individual investors and the more active involvement of pension funds.”

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Posted: 27 September 2013

26 September 2013

Politics

Britain is now in the unexpected position of having the Conservative, Labour and Liberal Democrat parties all agreeing on the need for nuclear power. A Lib Dem Minister is overseeing a chaotic and unsuccessful energy policy and it will be a very useful area for the other political parties to showcase Lib Dem incompetence in the run-up to the next general election. No doubt party bigwigs argued that at the very least the Lib Dems needed to get their policy in line with their actions – hence the need for the Lib Dem members to vote for nuclear power, which they dutifully did. This raises a number of questions about how Britain makes long term decisions for energy policy with its large, long lived infrastructure. Britain is going through ‘Electricity Market Reform’. The outcome has been zero reform (if reform is taken to mean making the system more fit for purpose) albeit many changes have occurred.

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Posted: 26 September 2013

25 September 2013

Energy Prices

Ed Miliband used his boldest and most populist speech as Labour leader on Tuesday to announce that he would freeze gas and electricity bills for 20 months if he wins the election, prompting claims by the big six energy firms that such price fixing would lead to California-style energy blackouts and stall investment in new power stations. In an emblematic policy designed to show he will fight to protect voters’ living standards, Miliband told his party’s conference in Brighton that he would “reset” the failing energy market. He insisted that the profiteering energy firms could absorb the £4.5bn costs of a freeze. The party cited figures showing consumers had paid £3.9bn over the odds since 2010.

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Posted: 25 September 2013

24 September 2013

Politics

Ed Balls: We need a radical transformation in our economy. Because in the twenty-first century, the companies and countries that will succeed will be those who can exploit the huge opportunities the new digital age and the era of big data are bringing – in high-value manufacturing, digital media, education and medical technology. And the question is whether we will seize this opportunity or squander it? We will legislate for a decarbonisation target for 2030 and unlock billions of pounds in new investment in renewables, nuclear and clean gas and coal technology. And we will give the Green Investment Bank the borrowing powers it needs to do its job. Conference, that is what the next Labour government will do.

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Posted: 24 September 2013

23 September 2013

Nuclear Investment

Ed Davey will on Monday begin a 10-day visit to China to drum up inward investment in Britain’s next generation of power stations and offshore wind farms as London is officially taken out of the diplomatic “deep freeze”. The energy secretary is the first British cabinet member to visit China for at least 18 months after Beijing cut contact with the UK last April following David Cameron’s decision to meet the Dalai Lama, Tibet’s spiritual leader, in London in early 2012. Mr Davey is set to sign a memorandum of understanding on offshore wind as he seeks to engage with China, which is looking to expand its offshore wind capacity. Mr Davey will also use his China visit to tout Britain’s nuclear opportunities as it looks for investment into the next generation of power stations. All but one of Britain’s 16 nuclear reactors will be retired by 2023. The state-owned China General Nuclear Power Group is already in talks to share the cost of EDF’s planned power station at Hinkley Point in Somerset. It may also become involved in two other plants EDF is planning at Sizewell. However, in return for investment, the Chinese are demanding greater operational control, which has caused a national security headache for the government given the sensitivities around nuclear power.

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Posted: 23 September 2013

22 September 2013

Energy Costs

The energy minister Greg Barker has spoken out in favour of energy company profits, insisting they are necessary in order to fund crucial investment in new power plants and that Britain enjoys some of the lowest electricity and gas prices in Europe. Ministers want Britain’s energy suppliers to help fund £110bn of investment in new power plants to keep the lights on this decade. “Unless companies are making profits they cannot reinvest those profits back into new projects,” Mr Barker said. Mr Barker’s comments come as British Gas is expected to reignite debate over profits and prices with a household price rise of up to 8pc in coming weeks.

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Posted: 22 September 2013

21 September 2013

NuGen

Britain’s nuclear prospects received a boost yesterday after details of a multi-million pound deal emerged. Reactor maker Westinghouse, which is owned by Toshiba, is preparing to buy into one of the consortia looking to build reactors in the UK. The Japanese giant is in talks to join NuGen, which is owned jointly by ScottishPower owner Iberdrola and GDF Suez. The consortium’s plans are to build a reactor at Sellafield in Cumbria, to be commissioned in 2023. Now Westinghouse is in talks to buy out Iberdrola’s 50 per cent stake in the project, as well as taking some of GDF’s 50 per cent holding as well. Westinghouse would then use its own reactor technology to push the project forward. This week it was reported that Hitachi is pushing its own building plans further back after the endless delays of the EDF talks. And industry sources indicated that NuGen is unlikely to proceed if the talks between EDF and ministers break down.

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Posted: 21 September 2013