ENA Bulletin 1st February 2010

In the news …

• ENA appears before Energy Select Committee on planning
• ENA gives evidence to MPs on future role for networks
• ENA meets Shadow Transport Secretary and Mayor’s adviser
• The future of gas heralded by green NGO
• RPI-X @20 - the review of energy network regulation continues
• Energy Bill clears Committee stage
• Brussels Update
• Forthcoming Events

'The Bulletin' is ENA's free fortnightly round-up of key issues affecting the sector. Visit http://www.energynetworks.org/bulletin for the latest edition or sign up at
http://www.sign-up.to/signup.php?fid=602&pid=4068

______________________________________________________________
ENA appears before Energy Select Committee on planning

Speaking to the Energy and Climate Change Select Committee on 20th January, ENA’s Chief Executive David Smith said the Government’s Draft National Policy Statement on the networks “set out the framework within which companies can make the necessary investments to meet the low carbon sustainable future.” He said the planning system must   “provide the three Cs: clarity, consistency, certainty”.

David was giving evidence to the Committee, alongside National Grid executive director Nick Winser, as part of its inquiry into the Department of Energy and Climate Change’s proposals for energy national policy statements (NPSs). The inquiry aims to determine whether the energy NPSs provide the best framework to enable the Infrastructure Planning Commission to assess future planning applications for energy infrastructure.

David said “the draft NPSs should be subject to the deepest and widest consultation process to ensure they have agreement and legitimacy and give the right level of detail to the IPC in its decision-making process… we also need to make sure that what happens on DECC consents, the Town and Country Planning Act and the IPC is absolutely seamless.”

David also reminded the Committee that failure to put the necessary network infrastructure in place will reduce reliability on energy systems and potentially damage local, regional and national communities and economies, and said the anticipated substantial increase in population over the next few years needed a flexible planning regime. He emphasised this was particularly important in areas of low line usage.

David stressed that the industry was fully committed to the principles of the Holford rules governing the visual impact of infrastructure on the landscape.

In response to a question from Labour’s Dr Des Turner MP about the public’s exposure to electric and magnetic fields generated by power lines and substations, David said he welcomed the Government’s statement identifying sensible, low-cost steps to take. “As an industry, we have already said we would volunteer to implement those as soon as it falls to us.”

Making a strong political point, Charles Hendry MP (Shadow Energy Minister) suggested there was a “major discrepancy” between National Grid’s assessment of the likely role of gas and the Government’s assumptions for the role of gas as set out in the NPSs. He said the Government’s Low-Carbon Transition Paper estimated that, by 2020, the contribution of gas-fired power plant to UK electricity production would fall from 40% of the mix to 29%, while National Grid and the regulator Ofgem suggest it could be 60%.

Nick Winser replied that National Grid’s view was “clearly articulated… Our view is very clearly that usage will be flat, or declining slightly, over that sort of period, and that imports will rise.”
______________________________________________________________
ENA gives evidence to MPs on future role for networks

Alan Claxton (ENA’s Director of Energy Futures) called for policy clarity to enable the industry to bring on the advanced (smart) networks needed in the battle against climate change.

He was speaking at the second evidence session on 27th January as part of a Parliamentary Renewable and Sustainable Energy Group (PRASEG) inquiry into issues affecting access to networks for renewables and other low-carbon technologies.

Alan said mixed messages were coming from Ofgem. While initiatives like the £500 million Low Carbon Network Fund were very welcome, the Distribution Price Control Review (concluded in December 2009) made reducing costs the priority. The technical challenges were surmountable but there was a need for policy clarity and certainty. The mandate established for smart meters had delivered this certainty, he said, but a similar mandate was needed for smart networks.

Alan set out ENA’s work in helping shape the sustainable and secure networks of the future. Our organisation is helping prepare the route map to smart grids with DECC and is updating technical guidance for developers on connecting both small and larger scale distributed generation to the network.

______________________________________________________________
ENA meets Shadow Transport Secretary and Mayor’s adviser

Key messages on future streetworks legislation are getting through to the Conservatives.

Tony Glover, along with Les Guest (National Joint Utilities Group CEO), met Theresa Villiers MP (Shadow Transport Secretary) on 20th January. Her support for lane rental as a means to regulate streetworks was a cause for industry concern as trial schemes had shown it to be ineffective and expensive. At the meeting, Tony and Les proposed a more focused and streamlined lane rental system (covering major busy parts of the road network) which she backed in a speech later that same day.

ENA discussed the NJUG proposal to make the London Code of Conduct - which sets out standards for road works - into a national code. Theresa welcomed this. In a subsequent meeting, Kulveer Ranger (the Mayor of London’s Director of Transport) was very positive about extending the London Code nationally.

Meanwhile, just as his London Permit Scheme was launched, the Mayor seemed to pour cold water on it. Speaking on the Today programme on 11th January, he said the scheme would not deal with the problem of digging up the road and put his faith into lane rental. Kulveer maintained the proposed lane rental scheme for London would focus on the busiest roads only.
______________________________________________________________
The future of gas hailed by green NGO

Gas will continue to key in UK energy supply according to ‘UK Gas Security: Threats and Mitigation Strategies’, a report commissioned by Greenpeace and written by Dr Jim Watson, the Director the Sussex Energy Group.

This report emphasises the need to see energy security in the context of the low-carbon agenda and can be downloaded from: http://www.sussex.ac.uk/sussexenergygroup/documents/gas_security.pdf   
______________________________________________________________
RPI-X @20 - the review of energy network regulation continues

On 20th January, Ofgem released a set of ‘emerging thinking’ papers as part of its two-year review of the economic regulation of energy networks.

The papers focus on outputs along with the need to encourage long-term efficiencies and innovation across the energy network sector. Ofgem’s vision for regulation is based on incentives with a greater regulatory discretion.

Ofgem will develop fuller proposals from July onwards, which will be in the first few weeks of a potential new government. It envisages making its proposals for regulatory changes by the end of this year - probably about the same time a new Energy Bill begins its debate.

Along with Ofgem’s ‘Project Discovery’ (an investigation into wholesale markets) RPI-X@20 can be seen as a response to the triple challenges of ensuring security, affordability and sustainability in energy.

This all comes in the run-up to a General Election, and as the Government seeks ‘to clarify’ Ofgem’s duties. If RPI-X@20 can be read as a blueprint for how to implement Government policy, it rightly identifies networks as lying at the heart of this process.
______________________________________________________________
Energy Bill clears Committee stage

The Energy Bill concluded its Committee stage on 21st January. It emerged unscathed from two weeks of Committee deliberations. Although the Bill is politically anodyne, there were attempts by the opposition parties to get through some more contentious issues. On Ofgem’s remit there were few challenges, although Charles Hendry made it clear that the Conservatives believe policy is the realm of Government; carrying it out is the role of Ofgem.

The date has not been set for the Bill’s return to the floor of the Commons for its remaining stages but the 9th or 10th February looks likely. That would ensure the Bill at least gets its second reading in the Lords before a General Election is called.

Details of the proceedings can be found at: http://services.parliament.uk/bills/2009-10/energy/committees/houseofcommonspublicbillcommitteeontheenergybill200910.html
______________________________________________________________
Brussels Update

Commission Appointments Delayed

We expected the new Energy Commissioner Oettinger, to start work in earnest this week. However, MEPs have given some of the other nominee commissioners a hard time which has delayed the whole approvals process.

The plan now is a final vote on the whole Commission in Parliament on 9th February, with the new Commissioners expected to take up their posts on 10th February.

The nominee Energy Commissioner is generally considered to have given a confident performance when interviewed by ITRE members, and we understand that Commission officials have been impressed by his mastery of his brief.

Interestingly, as part of the wholesale Commission re-organisation that is underway, we hear that Philip Lowe, currently Director General in the Competition Directorate, is in line to be DG in the Energy Directorate i.e. Oettinger’s  no 2. If this is the case, then Mr Lowe’s competition background could make for an interesting mix with the new centre right Commissioner’s pro business approach.

2010 Energy Policy Plans

With the previous Energy Commission being kept on as caretaker, and the new Commission waiting in the wings we have no new EU legislation.

Nevertheless, as far as the networks are concerned, it is clear the Commission is looking at ways to support and finance the work needed to achieve overall EU objectives of greater interconnection, aiding energy security, and an accelerated introduction of new low carbon technologies.

Expectations currently are:

1.    EU Energy action Plan 2010 – 2014, strategic vision and objectives to 2030, including the financing of low carbon technologies
2.    Infrastructure package, including new energy security and infrastructure funding instrument (to replace Trans European Networks (TEN-E) funding for TSO infrastructure projects).
3.    Communication on Smart Grids
4.    Low Carbon Road Map to 2050
5.    Revised EU Energy Efficiency Action Plan (politically difficult, may not be until 2011)

We already know that the Commission is ramping up its work on Smart Grids. The new EU Task Force has established a number of working groups on which the ENA has representation, though both the Geode and Eurelectric organisations.

In terms of smart meter initiatives, the EU Task Force is making good progress in developing an EU model. In the next 6 months the focus will be on the functionalities necessary for the operation of smart grids. The hope is to have a finalised model by June.

Post Copenhagen

We hear that DECC sees follow up actions from Copenhagen are a key priority for the UK, namely to convince other lead nations of the need for a binding Treaty. The Prime Minister has said he will lead the global campaign to achieve this.

The Copenhagen Accord is not a legally binding agreement, but, for the first time, developed countries like US and China have publicly agreed on the need to maintain the temperature increase to below 2 Celsius.

The EU is still considering how and when it will increase its proposed emissions reductions target for 2020 from 20% to 30%. This proposal was, in the end, not put on the table by the EU negotiators in Copenhagen. The UK Government strongly supports raising the emissions target, but is aware of the energy industry’s concerns that should not be done hastily or without similarly ambitious targets agreed by other countries.

On the domestic front, work is progressing on the UK’s 2050 road map, setting out our low-carbon strategy for the next 40 years. DECC is expecting to publish its report in March i.e. before the General Election. ENA hopes to see a road map that provides real clarity on the actions that will fall to each part of the energy sector, not just the networks, and recognises the need for change to the regulatory framework to incentivise this work.

______________________________________________________________

Forthcoming Events

Transmission & Distribution/Smart Grids Europe 2010
29th-31st March 2010, Amsterdam

This conference and exhibition will bring together 90+ of Europe’s industry professionals to deliver case studies on long- and mid-term electricity network issues delivering the specific cases you can leverage to implement best practice to your business. Alongside Transmission & Distribution Europe, the 2nd edition of Smart Grids Europe is being organized. The 2-day Smart Grids Europe programme delivers international case best practice case studies showcasing European utilities like Endesa, ENEL, ESB, EDF realising utilities smart grids potential.

•    http://www.smartgrids-europe.com
•    http://www.td-europe.eu/

Utility Regulation
London, 04 March 2010 (09:30 - 05:15)

The 2010 Seminar marks the half way point for the review of regulation of Great Britain’s energy networks (RPI-x@20). Together with ‘Project Discovery’, the conclusion of PR09 and DPCR5 in water and electricity respectively, this year’s leading Utility Regulation Event is set to offer unique insights, programme updates and expert commentary from across the sector. The speaker panel this year includes regulators, the regulated, professional advisors and includes perspectives from both GB and international markets.

• Book online: http://www.sbgi.org.uk/orderform.aspx/04bee9d8-85b6-496f-94ef-c6166987f32d
• Download brochure:
  http://www.sbgi.org.uk/ContentFiles/UN/Event%20brochure%204%20March%2010%20v3.pdf
• For further information please contact Ana Ray on 01926 513 761 or email ana@sbgi.org.uk

REMINDER: CHANGE OF DATE

Smart Metering 2010
Delivering a Smart UK
2 March 2010, 76 Portland Place, London, UK

This conference examines the key issues, including finance and delivery of a smart meter programme, customer engagement, data management, forging the future smart grid and the “smart home”.

Featured speakers include

• Senior Representative, Head of Metering Team, DECC
• Christopher Bull, Smart Grid Programme Director, National Grid
• Bridget Morgan, Head of Smart Metering Delivery, Ofgem
• Petter Allison, Director of Smart Metering, Centrica
• Cathy Mannion, Director Electricity Networks and Retail, Commission for Energy Regulation
• Marian Spain, Director of Strategy, Energy Savings Trust

Further information:
http://conferences.theiet.org/smart-metering/index.htm?origin=energy-networks


For more information, contact Tony Glover: 020 7706 5122 (tony.glover@energynetworks.org)


Copyright © Energy Networks Association 2010. 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.