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DCP 228 – What you need to know for April 2018

From April 2018, the new regulatory change from OFGEM, DCP 228 will alter the way in which electricity distribution charges are calculated. This will affect the way business properties are billed. Distribution charges currently account for up to 19% of your bill. As a result, you may look to re-examine the times at which you use energy in order to reduce costs.
The main distribution charge is DUoS (Distribution Use of System) which correlates to usage and is calculated using a Red, Amber and Green banding system. The aim of DCP 228 is to revise how DUoS charges are calculated, so they accurately reflect the costs incurred by network operators during peak and non-peak periods.
The change will also affect Common Distribution Charging Methodology (CDCM) and how customer tariffs are set. Under the existing CDCM structure, energy consumed during DUoS Red Band (peak) periods is priced much higher than during either Amber or Green (non-peak) periods. However, the new change will mean that charges during Red Band periods will be lowered and raised during Amber and Green. This will essentially flatten the charging structure, creating more of a balance across the bands.

How will your business be affected?
All businesses will be affected by DCP 228, excluding the UK’s larger electricity connectors whose charges are governed by the Extra High Voltage Distribution Charging Methodology (EHVDCM).
For many half-hourly businesses, DCP 228 will mean a rise in energy costs. However those with a high use at peak times may see a small decrease on their bills. The level of impact will be based on your region and DNO (Distribution Network Operator).

What can I do?
Monitoring when your business is using the most energy is the first step to reducing consumption when tariff rates are at their highest. How can you monitor this? AGP can help you identify ways to reduce energy costs and mitigate the impact of DCP 228 on your business.  Our Profile Alerts are a successful way to analyse your electricity usage, helping you to reduce consumption and save on costs, whilst also combating energy waste.


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Gas shortage to push up bills after 'perfect storm' of energy problems

• Jillian Ambrose, ENERGY EDITOR
• Gordon Rayner, POLITICAL EDITOR

12 December 2017 • 10:04pm
Households and motorists have been warned to expect sharp rises in gas bills and petrol prices after a “perfect storm” of supply problems as the winter freeze begins.

The shutdown of the North Sea’s most important oil and gas pipeline system on Monday was compounded by an explosion at a major processing facility in Austria, which is the main point of entry for Russian gas into 
Europe.

After the incidents, wholesale gas prices hit their highest level for six years, rising by more than 50pc in the space of 24 hours, raising fears that the increase will be passed on to customers.

Oil prices have climbed so steeply that motoring organisations are warning of a 3p per litre increase at the pumps by Christmas.

MPs have told energy companies that any hike in bills for consumers would be a “disgrace” because wholesale prices are agreed well in advance.

Ian Liddell-Grainger, the Conservative MP and member of the parliamentary business and energy select committee, said: “Passing on price rises to the consumer would be totally unfair because it’s not their fault and this is nothing to do with them.

“The big energy companies buy their gas and oil about six months in advance, so there should be no need to increase bills.

“They should continue to honour their commitments to consumers. If they pass this on to their customers, it would be a disgrace.”

As well as problems affecting the Forties pipeline in Aberdeenshire and the Baumgarten facility in Austria, a series of smaller setbacks also added to the sense of crisis.

One of the largest North Sea sites is struggling to produce gas at its normal rate. The ageing Morecambe field is supplying at only around two million cubic metres (mcm) per day, less than half its usual rate of 5  mcm.

On Tuesday, BBL, the Dutch company that operates the gas pipeline between the Netherlands and the UK, had to restrict supply temporarily across the Channel because of problems with a compression station.

Meanwhile, Norway’s giant energy company Statoil said that it reduced output from its platform in Troll, Europe’s biggest offshore gas field, because of a power outage.

Norway is one of the main suppliers of gas to the UK.

The current cold snap has driven gas demand in homes and businesses to their highest forecast levels since early 2013.

Overnight on Monday and early Tuesday, temperatures dropped to as low as 8.6F (-13C) near Shrewsbury, in Shrophshire.

Demand for gas has also been driven steadily higher in recent years by the shutdown of coal plants.

The events have pushed gas prices to their highest level for six years, from just 57p a unit before the shutdown of the Forties pipeline on Monday to more than 90p on Tuesday evening.

Oliver Sanderson, a Thomson Reuters analyst, warned that the “spectacular” confluence of problems could result in high prices for the rest of the winter. “This isn’t just about where we’ll find the gas we need for today – it’s about where to find the gas we’ll need in January,” he told The Telegraph.

“If small suppliers haven’t bought energy in advance, and that is possible due to the sudden start of cold weather in the last few weeks, they could be in trouble,” he warned.

“The European gas market seems to be going through a perfect storm,” said Massimo Di-Odoardo, an industry analyst at Wood Mackenzie.

The wholesale gas price for January has already climbed by almost a third, sparking concern that energy suppliers will pass increased costs on to their customers by raising tariffs.

A winter of surging gas prices could even cause smaller suppliers to go bust if they burn through their cash while trying to buy enough gas to heat customers’ homes.

This week’s “perfect storm” of problems will raise questions about the UK’s energy security, said Malcolm Graham-Wood, a veteran energy industry advisor.
He said the gas crunch is an “entirely predictable” result of the UK’s creaking infrastructure and Government’s bungling energy policy.

Mr Graham-Wood blamed the Government for its “short-sighted and ridiculous” decision not to invest in new gas storage facilities. The 32-year-old Rough storage facility off the coast of Yorkshire was forced to shut earlier this year

Unidentified gas charges have increased

Nov 09, 2017 Freddie Rand Coal, Gas & Oil, Industry Round-up 0


Inspired Energy

Unidentified Gas (UIG) charge, effective from 1st October 2017, is an unavoidable industry cost paid by all gas suppliers due to issues such as unregistered meters, pipe leaks and theft of gas by some end users.
Since the implementation of Project Nexus – a large UK Gas industry project – in June this year, suppliers have seen significantly higher than anticipated levels of UIG. This has resulted in a higher charge that suppliers and then in turn customers will have to pay.

These changes increase existing unidentified charges by a factor of 10. Since June 2017, many suppliers have absorbed the cost of UIG themselves and have not passed it onto customers. However some suppliers have included them on invoices for September’s gas consumption.

As a result, customers on a pass-through contract will experience what was previously a minor element of a bill become a large and disproportionate charge. Customers with more than one gas supply will be the most affected.

Background Knowledge – Project Nexus & the New UIG Process
One of the main changes which Project Nexus formed was the replacement of the Unallocated Gas (UAG) process with an UIG process. The new UIG process was designed to ensure that a more accurate view of the volume of UIG was provided. Since the implementation of Project Nexus in June 2017, the total amount of UIG is derived on a daily basis from a formula that subtracts shrinkage, DM (daily metered) allocations and NDM (non daily metered) estimates from the total gas input into the system. The amount of gas ‘missing’ is therefore the UIG volume.

Ofgem – Proposals to combat UIG
The gas industry is still undergoing consultation about the UIG charge. Gas shippers met with regulator Ofgem on 7th November, suggesting a charge should be set at a certain level and scaled across the industry. Ofgem was not unsympathetic but was wary of any proposals that might reduce efficiency and incentives on data accuracy and theft reduction. Consultation is continuing with an open meeting on 13th November to discuss further proposals.
 


Energy Jargon Buster

The energy industry is very complex, meaning it’s very easy to get lost when discussing your usage or your contract.
AQ (Your annual consumption used)
EAC (Estimated Annual Consumption is your estimated gas and electricity usage in a year)
Duos (Distribution use of system) A non-commodity element of your price, which pays for the maintenance of your local energy infrastructure.
CED (Contract end date it’s the day your contract ends.)
LOA (This allows us to deal with your account on your behalf. We use this to go to market to tender your contract.
KWh (Kilowatt Hour) – the electricity consumed or generated every hour. A kilowatt comprises of 1000 watts
KWp (Kilowatt Peak) – the maximum possible electricity generation from a system
MWh (Megawatt Hour) – the electricity consumed or generated every hour, measured in megawatts (1000 kilowatts)
KWth (Kilowatt Thermal) and KWh(th) – kWth is the unit of heat supply capacity measuring the potential output from a heating plant. It is not to be confused with the units of heat produced which is measured in kWh(th)
HH (Half Hourly) – the meters with a ‘00’ profile number used by energy-intensive organisations
KVA (Kilovolt ampere) – unit of power related to running industrial machinery. Kilovolt-amp (kVA). KVA is kilo-volt-ampere. KVA is a unit of apparent power, which is electrical power unit. 1 kilo-volt-ampere is equal to 1000 volt-ampere
 
Big Six – the term referring to the major energy suppliers in the UK today with over 90% share of domestic customers. These are British Gas, EDF Energy, and npower, Scottish Power, SSE and E.ON UK
Non-Big Six – the term used for alternative energy suppliers to the Big Six
DNO (Distribution Network Operator) – companies licensed to distribute electricity in the UK. These are divided into 14 geographically defined areas, based on former area electricity board boundaries. DNOs are responsible for allocating MPANs and the ECOES database of electricity supply points
MPAN (Meter Point Administration Number) – unique reference number for your electricity supply
MPRN (Meter Point Reference Number) – unique reference number for your gas supply
Single phase – AC 230 volt electricity supplied to our homes. It has two wires, live and neutral. Single-phase power will have period with zero power but in most situations this does not matter because the load has enough energy storage.
Three phase – a further two electrical circuits. In a three-phase service the individual voltages peak one after the other in sequence so the power is more constant at AC 415 volt phase to phase. A 3-phase system is much more efficient for high-capacity installations, but is more costly to install. This is why 3-phase utility power is typically only available in industrial and commercial areas.
Standing charge – daily charge that covers the cost of maintaining your supply
 
ESOS (Energy Savings Opportunity Scheme) – mandatory carbon reporting scheme that came into force in 2014. It affects organisations with over 250 employees or with a turnover of over €50m and a €40m balance sheet
https://www.gov.uk/energy-savings-opportunity-scheme-esos
CCL (Climate Change Levy) – a tax paid by industrial, commercial, agricultural and public services. It does not apply to small businesses, domestic energy users or charities engaged in non-commercial activities. CCL is paid at either the main rates or carbon price support (CPS) rates. Main rates apply to electricity, gas and solid fuels like coal.
EPC (Energy Performance Certificates) – an EPC is required whenever a property is built, sold or rented. It contains information about the property’s energy use and typical energy costs. A rating from A (most efficient) to F (least efficient) is awarded and valid for 10 years. In 2018 the government will make it illegal to let any property with an EPC rating of F and G
https://www.gov.uk/buy-sell-your-home/energy-performance-certificates
DECs (Display Energy Certificates) – DECs show the actual energy usage of a public building and must be displayed at all times in a prominent place clearly visible to the public. They are required for buildings that have a total useful floor area of more than 500m2 (this will be reduced to 250m2 on the 9th July 2015) that are occupied by a public authority and frequently visited by members of the public.
CfDs (Contracts for Difference) – a government scheme for trading renewable electricity that will provide a more stable financial market than is currently offered by ROCs through the introduction of a minimum strike price for electricity.
Electricity Market Reform (EMR) – measures to attract £110bn investment, which is needed to replace current generating capacity and upgrade the grid by 2020. Two key mechanisms are the CfDs and Capacity Market.

Three ways Triad alerts help your business

What are Triads?
A Triad only covers a half hour period but can have a big impact on your energy costs. Our alerts help you stay focused on energy usage in winter.
How many alerts?
We send out about 20 alerts a year.
So, by working together, you have a good chance of managing your energy for financial benefit.
Do I need it?
If your business has generating capacity and can provide excess electricity to the National Grid during a Triad, you can be well rewarded.
Why Triads matter to major power users
If your business uses a lot of electricity the price you pay could be adversely affected by how much energy you use during the three half-hour periods of peak demand that the National Grid uses to determine its annual charge for transmission.
What do I need to know about Triads?

Triads are the three half hour periods of peak power demand across the National Grid in a year (from November to February). These three points are used to calibrate the system costs, which are passed on to industry.
Peak demand – who pays for Triads?
If your business is a heavy consumer of energy, you do. Triad charges to business can range from around £15-£40 per kilowatt depending on where you are in the
country. So, in any half-hour on a cold day in winter when there’s a chance of a Triad, it makes sense to minimise your power consumption. If your business is a heavy power user, you should sign up for our free Triad alerts.

Is TNUoS the same as Triads?

TNUoS is short for Transmission Network Use of System. The terms are often used interchangeably, though Triads may be more familiar. The aim of the Triad system is to incentivise industry to help smooth out peaks in energy demand during the winter, especially in cold snaps.

 

How many Triad warnings might I get?

There could be around 20-30 potential Triad warnings in winter (November to February). However, since Triads are assessed after the event, it’s impossible to know in advance which half-hour will be a Triad. That’s why it’s important to sign up for our Triad warning service and have a serious energy efficiency strategy in place.
Can I make money from Triads?
Yes. If you can generate power and are able to supply excess electricity to the National Grid during Triad periods, there can be substantial financial incentives available. Simply sign up with SSE Business Energy on the form below.

How do Triads work?

A Triad represents one half-hour period of the highest demand for electricity. To avoid Triads affecting businesses in consecutive half-hours, each has to be at least 10 days apart. When power demand peaks, the National Grid network is under maximum pressure to deliver power where it’s needed, and causes generators to bring online more expensive (and less efficient) production capacity. So, it’s in everyone’s interest to work together to minimise energy usage.

New measures from OFGEM

Recently, OFGEM have announced that they will be introducing a new measure on 1st April 2018, known as DCP161 and could result in businesses being financially penalised if they do not take any action. this is being introduced to recover additional costs that DNOs (Distribution Network Operators) incur when capacity levels are exceeds by customers.
Currently, there are no real incentive for businesses to actively manage their available site capacity and Peak Demand because they are charged at the same rate as their allocated capacity. However, from April 1st, they would be financially penalised for doing this, charged an excess penalty rate which could be over three times higher than the existing standard rate. Obviously, this could result in a significant increase in the overall electricity charges if the site was regularly exceeding its assigned availability capacity.
But there are ways to mitigate these price rises, for example looking to increase site capacity levels, or start actively managing peak demand, or a mixture of both.
AGP can help any business manage their capacity chargers by optimizing the available capacity, as well as also looking at ways to reduce the peak energy demand to avoid any excess charges.
We can assist any businesses with any issues regarding this new DCP161 tariff, so please contact us for more information.

Inflation in Britain is set to rise above 3

By Associated Press
Published: 09:44, 17 October 2017 | Updated: 14:04, 17 October 2017
LONDON (AP) - Inflation in Britain is set to rise above 3 percent in the next month or two as Brexit-related price increases push through the economy, the Bank of England's governor warned Tuesday, reinforcing expectations interest rates will soon rise for the first time in a decade.
Mark Carney's comment came after official data showed consumer prices rose 3 percent in the year to September, from the previous month's 2.9 percent rate. The increase, which took the rate to its highest since March 2012, was largely due to rising prices for food and transport.
If it had risen further, Carney would have had to write to Treasury chief Philip Hammond explaining why inflation is more than a percentage point above the 2 percent target and what the central bank were going to do about it.
Description: In the photo made from video, Governor of the Bank of England, Mark Carney, gives evidence to the Treasury Select Committee in Portcullis House, London., Tuesday Oct. 17, 2017. Inflation is set to rise above 3 percent in the next month or two, the Bank of England's governor warned Tuesday, a cautionary note that reinforces expectations interest rates will soon rise for the first time in a decade (PA via AP)

In the photo made from video, Governor of the Bank of England, Mark Carney, gives evidence to the Treasury Select Committee in Portcullis House, London., Tuesday Oct. 17, 2017. Inflation is set to rise above 3 percent in the next month or two, the Bank of England's governor warned Tuesday, a cautionary note that reinforces expectations interest rates will soon rise for the first time in a decade (PA via AP)
In testimony to lawmakers on Tuesday, Carney said he's "more likely than not" to have to write that letter in October or November.
It's because of this above-target inflation that the bank's rate-setting panel is expected to raise the benchmark interest rate by a quarter-point from the record low of 0.25 percent on Nov. 2. After the last meeting, when seven of the nine members voted for unchanged rates, Carney warned a "modest" hike was likely in coming months despite Brexit uncertainties and sluggish wage growth. Investors think it's more or less a done deal now that the bank has signaled the increase.
"The bank's credibility has been questioned following numerous false dawns on interest rate hikes," said Ben Gutteridge, Head of Fund Research at Brewin Dolphin.
A rate rise would come despite an expected easing in inflation next year and mounting evidence that the economy is faltering as the official Brexit date of March 2019 draws nearer - it is growing slower than any other Group of Seven industrial economy.
The main reason why inflation spiked over the past year is the pound's 15 percent or so drop fall since Britain voted to leave the European Union in June 2016. That ratcheted up the cost of imported goods like food and energy, trebling inflation since September 2016.
Carney put his weight behind the need for a transitional deal after Brexit and indicated that the outlines of a deal should be agreed on early next year to keep financial firms in particular from pushing ahead with contingency plans, including moving jobs out of Britain.
"There is a limited amount that firms can do in a short period of time," he told lawmakers. "It's important ... not too much is asked from them."
He argued that a disorderly exit from the EU is in no one's interest, especially financial firms dealing with complicated contracts and cross-border issues of insurance or data. Though the economic impact of Brexit will be felt most keenly in Britain, Carney said financial issues could be more acute for the EU in the short run, as London is a financing hub for many European firms.
Fears of a "no-deal Brexit" have ratcheted higher recently as talks between the British government and the EU have made little headway.
Carney conceded that firms have become "less confident about a smooth transition" in contrast to households. That warning weighed on the pound, which fell 0.5 percent at $1.3186.
In a speech last month, Prime Minister Theresa May laid out her wish for a transition period lasting around two years after Brexit, during which Britain's economic relationship with the other 27 EU countries will remain largely unchanged. A transition deal could also give both sides time to forge a longer-term relationship.
While acknowledging that Brexit offers Britain the long-term opportunity to reset its economy, regulations and trading orientation, Carney cautioned about the impact of moving too far from EU, given that the bloc accounts for nearly 50 percent of British exports. Those advocating a "clean" Brexit, whereby Britain leaves the EU without a deal, worry that any future trade agreement could see Britain replicating EU laws, thereby limiting the country's ability to forge a different path.
"The bird in the hand is quite large," Carney said.

Urgent Market Update - June 2017

Centrica have announced they will be closing the Rough Storage facility within the next four to five years. Rough, located just off the cost of Yorkshire, has become increasingly unsafe, and it is uneconomic for Centrica to continue with the constant repairs and refurbishment needed to keep the facility open.
The storage facility opened in 1985, and holds approximately 9 days of gas storage, it’s the UKs largest natural gas storage site. Britain already imports about half of its gas from Norway, and continental Europe, and large amounts liquefied gas from Qatar .
The UK will become largely dependent on energy imports, and this will have a volatile effect on gas pricing. Analysts at Barclays have said that the closure will create a lot of uncertainty in terms of Energy pricing.
Although there isn’t a material impact yet, possibly due to a large amount of recoverable gas in the system, over winter months if we experience periods of cold weather, we could see gas in high demand, and we have no way to regulate the cost of imports.
Please contact your relationship manager if you would like our opinion on how to advise your customers to best cope with the expected long term volaltility in market pricing
Kind Regards,Online Direct

UK post-Brexit economy depends on energy market that’s a mess

Written by Bloomberg - 13/04/2017 7:29 am
 
Relying on natural gas to fuel Europe’s second-largest economy was never going to be easy for the U.K., even before Brexit.
Britain’s once vast North Sea gas fields are fading, and even after a decade of trying, the island nation hasn’t replicated the fracking boom that turned the U.S. into the world’s largest producer. Gas imports have jumped 87 percent in the past decade. That’s left the country at the mercy of foreign suppliers just as the U.K.’s planned exit from the European Union signals trade rules for the fuel probably will have to be rewritten.
Already, the U.K.’s $445 billion manufacturing industry, which uses gas to run machines, heat buildings and mix chemicals, is having to go as far as the Amazon rain forest to source fuel. An aging storage reservoir off the east coast that holds most of the country’s winter reserves has deteriorated so much it’s partly closed. Gas will become even more important as the government plans to quit using coal by 2025.
“The U.K. could do a lot better,” said Russel Mills, director of energy and climate policy at Dow Chemical Co., the world’s second-biggest chemicals maker. “The country’s already taking a bit of a risk in terms of the low level of gas storage. Brexit is going to complicate matters.”
Gas has been pivotal to the nation for four decades, but domestic output peaked almost 20 years ago and imports from Norway to Qatar are being used to make up the difference. About 75 percent of foreign supplies arrive by pipelines.
Shortages aren’t an immediate risk because liquefied natural gas import terminals are using about a third of their capacity. LNG is “a fantastic thing” for the U.K. market, Dan Monzani, head of security of electricity supply at the Department for Business, Energy and Industrial Strategy, said March 29 at a conference in London.
Tim Malone, a spokesman for the department, didn’t respond to emails and phone calls seeking further comment.
Imported fuel adds to costs for U.K. consumers, whose electricity costs are already higher than for other EU nations, according to a government paper from January on the nation’s post-Brexit industrial strategy. Fuel purchased in other currencies became relatively more expensive for U.K. buyers in 2016 when the pound fell more than 13 percent against the euro and dollar.
New Cables
The nation is an importer of power from France and the Netherlands and total energy purchases from abroad are now at levels not seen since the 1970s. New electricity cables are planned with France, Germany, Norway and Denmark to help boost supply security, but they risk trade tariffs once Britain leaves the EU.
“Finding energy partnerships with EU member states will be an important task in the years to come,” said Jade Kalinowsky, a senior trader at Fredericia, Denmark-based utility Dong Energy A/S.
While there are approvals for as many as 26 new gas-fired power stations, investors are hesitating because of the vast array of policies to navigate, according to the U.K.’s Major Energy Users Group. Diesel and coal generators have emerged as winners in government auctions designed to entice investments in large-scale gas-fired plants.
“We’ve lost our way,” said Keith Anderson, chief corporate officer at Iberdrola SA’s Scottish Power unit, which had a gas plant approved in 2011 it hasn’t yet built. “Investors want a clear signal. The market signals are just not there. Do you want gas plants built?”
Supporting Utilities
To ensure supplies, the country relied for decades on gas pumped into the Rough storage facility, a depleted North Sea field. The underground reservoir is deteriorating from age. Stockpiling fuel at the site is halted until at least May 2018 due to the risk of leaks.
“I personally don’t see how the system is going to fill the gap of 3.31 billion cubic meters that Rough is able to provide without having a big impact in prices,” said Guillermo Baena Gomez, a senior market analyst and energy trader in London at Advantage Utilities Ltd. “That could lead to a ‘gas crisis’ due to the change in supply and demand in the U.K.”
Bloomberg New Energy Finance estimates that Centrica Plc.’s Rough, which accounts for 70 percent of the U.K.’s total storage capacity, won’t ever return to service.
Shale could provide some domestic supplies. Two companies were granted permission to drill or hydraulically fracture shale in the last year. But even gas, with half the emissions of coal, is becoming politically fraught, according to Natascha Engel, a member of parliament for the Labour party for North East Derbyshire, an area where Ineos Group Holdings SA intends to apply for a license to frack.
“Fracking is a really awful word, it sounds quite frightening,” she said at an industry event in Birmingham last month. “So people don’t really look beyond that so much.”
National Grid Plc, which manages the nation’s pipelines, estimates power output from gas plants may drop as much as 64 percent by 2025, according to a scenario where the nation focuses on climate protection. A business-as-usual scenario has gas output rising.
“Nobody will build gas plants with these sorts of numbers being bandied about,” said Eddie Proffitt, chairman of the natural gas group at the U.K.’s Major Energy Users’ Council. “I’m not sure the government itself is clear what it wants.”

UK energy users have a taste of Brexit and they don’t like it

Written by Bloomberg - 05/10/2017 7:00 am
Energy news
SSE launches first ever "Valuing Difference' report - News for the Oil and Gas Sector
 
Britain is getting a preview of what some energy bills might be like after Brexit. And it’s not popular.
While negotiations on the U.K.’s exit from the European Union have stalled, natural gas prices had the biggest summer rally in three years thanks to dwindling domestic supply and the planned shutdown of the country’s biggest storage facility. Industrial-scale consumers paying millions of pounds for energy are seeking reassurance that Brexit won’t make it worse, as the plunge in the pound has already boosted import costs.
Things are bad enough that Ineos Group Holdings Plc, the U.K.’s biggest closely held company, is considering making its own version of Britain’s iconic Land Rover Defender car in Germany, where industrial power rates are 24 percent cheaper than in Britain. And Centrica Plc, the nation’s biggest supplier to households, warned of risks with Brexit in August, when it increased electricity bills for the first time in three years.
Until its divorce from Europe becomes final in March 2019, Britain is a member of the EU’s single market, which allows electricity and gas to flow freely across borders through cables and pipelines. While there’s no indication it’ll hamper free trade, some are worried energy is an afterthought, which risks unintended consequences.
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“My perception is that it’s not high on the priority list,” said Felix Lerch, executive chairman of Uniper SE’s U.K. business, which operates power stations, pipelines and a gas storage facility. “You don’t know at this point in time where it’s leading.”
A Brexit strategy speech by Prime Minister Theresa May in Florence, Italy, on Sept. 22 didn’t mention energy at all. That’s even as Britain’s dependency on foreign gas is set to rise to almost two-thirds of consumption by 2025, from about half now, on dwindling North Sea output.
Scared Traders
The country is so heavily reliant on Norway, its biggest foreign supplier, that announcements of routine maintenance through the summer scared traders, with prompt prices jumping more than 20 percent in the third quarter. The Scandinavian nation, which met 38 percent of U.K.’s demand last year, is still on track to export a record volume this year.
Jim Ratcliffe, the self-made billionaire founder of Ineos, whose profit mainly comes from chemicals, said the government is listening to concerns from the commercial sector, but the nation has been hurt by a long-term move away from industrial activity, including energy, as a pillar of the economy. Manufacturing has slumped from 17 percent of the U.K.’s gross domestic production in 1995 to 9.7 percent percent last year, according to the World Bank.
“If you’ve got a business where energy’s important, like chemicals, you’re always going to go to Germany before you go to the U.K.,” said Ratcliffe, who will invest about 600 million pounds ($796 million) in developing the new car. “To encourage someone to invest real money in the U.K. there has to be some unique selling point.”
Britain’s wholesale power premium over costs on the continent is partly because coal stations have closed at a faster pace than across the channel after a floor price on carbon emissions was introduced in 2013.
The planned loss of Centrica’s Rough gas store means prices may rise further because the country will need to compete with other importers, from France to Japan, for liquefied natural gas cargoes.

Energy prices could be capped this winter, suggests minister

A gas and electricity price cap could be imposed as early as this winter, Energy Minister Greg Clark has said. He told the BBC that the regulator, Ofgem, would receive legal backing from parliament to introduce a cap.Asked if this could mean action this winter, he replied: "Precisely. That's exactly why I'm keen that Ofgem makes use of their powers."
But the boss of British Gas-owner Centrica, Iain Conn, warned that price caps could mean the end of cheap deals.
On Wednesday, Prime Minister Theresa May revived plans to cap prices, something that was promised in the Conservative's election manifesto but was absent from June's Queen's Speech.
Her statement was followed by sharp falls in energy company share prices. But Thursday trading saw a partial recovery, with most up by 1% or more.
Mr Clark told the BBC's Today programme: "If they [Ofgem] need legal back-up there is a strong consensus in parliament for this, so we will publish legislation and we'll invite the whole House to endorse this so that they have the legal certainty."
The full details will be published in a draft Parliamentary bill next week.
Flatter prices
Some 12 million people are on energy companies' Standard Variable Tariffs (SVTs). These tariffs are typically the most expensive.
SVTs are already falling from favour with energy suppliers. E.On has said it will phase out standard variable tariffs from next year and Centrica's Iain Conn agreed they should be abolished.
The Competition and Markets Authority has said consumers have been collectively overcharged £1.4bn by energy providers, a figure disputed by Mr Conn, who said the figure was equivalent to the industry's entire profit so it was not possible for companies to have overcharged by such a sum.
Mr Conn also argued the price cap plan would not be best for consumers, as there was "clear evidence" they did not work.
He told the BBC: "In New Zealand, in Spain, in California and in Ontario they tend to limit choice, reduce competition and prices tend to bunch around the cap."
This had also been noticeable in this country, he said: "We've seen this this year in the UK with the new pre-payment meter cap where most prices are within £2 of each other."
Mr Conn accepted the market needed to change, and acknowledged the industry itself should accept an element of blame for the way the market had evolved.
Many in the industry were critical of Theresa May's announcement on Wednesday, arguing that a price cap risked stifling competition.
"Over three million consumers have switched already this year and the number of standard tariffs have fallen by almost a million in the last six months," said Lawrence Slade, Energy UK chief executive.
First the Prime Minister says there will be a draft bill for an energy price cap. Then we hear that if Ofgem comes up with a cap quickly, time-consuming legislation won't be needed.
In fact, Greg Clark suggests the protection could be in place before this winter's heating bills start racking up.
The problem, though, is that Ofgem has long taken the view that, on its own, it cannot impose a full cap because suppliers will appeal against it and probably win.
Mr Clark may be hoping that Ofgem will act promptly regardless of that danger, encouraged by the government standing behind it with a big stick.
Another possibility is a two-stage process.
The regulator brings in a more limited cap it is working on for several million low income families on Standard Variable Tariffs. That could happen before Christmas.
Then next year sees the introduction of a legal cap for all 12 million on standard rates.

The boss of a fuel poverty charity told the BBC that a broad energy price cap would not help vulnerable consumers.
Jenny Saunders, chief executive of National Energy Action, told the BBC's Wake up to Money Podcast: "We've been advocating a rather more focused cap, not a general cap on all standard variable rate customers because we recognise there are particular problems for very vulnerable households - people on the lowest incomes.
"We're not advocating a full cap across the board, target it to those who need it, people who are rationing their energy use, who are going to go cold this winter.
"The cost of doing this will be smeared right across the customer base so if we're going to reduce the cost across the board for standard variable tariffs it will go up for other customers who are on fixed-rate tariffs, and we've been encouraging a lot of people to go onto fixed rates."

What is a DEC?

Display Energy Certificates
What is a DEC?
Display Energy Certificates known as DECs, promote the improvement of the energy performance of buildings occupied by a public authority and form part of the implementation of the Energy Performance of Buildings Regulations 2012 (England & Wales).
The purpose of DECs is to raise public awareness of energy use and to inform visitors to public buildings about the energy use of a building. DECs provide an energy rating of the building from A to G (A being very efficient and G being the least efficient).
DEC and accompanying advisory report are required for buildings with a total useful floor area of over 250m2 occupied wholly or partly by public authorities and are frequently visited by the public.
Local authorities can issue a penalty charge notice of £500 for failing to display a DEC at all times in a prominent place clearly visible to the public, and £1,000 for failing to possess or have in their control a valid advisory report.
How long is a Display Energy Certificate (DEC) valid?
Where the building has a total useful floor area of more than 1,000m², the DEC is valid for 12 months. The accompanying advisory report is valid for seven years.
Where the building has a total useful floor area of between 500m² and 1,000m², the DEC and advisory report are valid for 10 years.
Service we provide
We can help your organization meet its regulatory obligations and improve its energy performance through our DEC service.
Our highly qualified and fully accredited energy assessors will produce your DEC and advisory report and ensure that they are lodged on the non-domestic energy performance register.
We can also support your organisation throughout any changes it wishes to make in order to improve its energy rating and energy performance in the future, helping reduce your buildings operating costs and enhance its user experience.
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Gas and electricity prices may have to rise further, warns industry body
Energy UK chief tells MPs rising wholesale prices and government subsidies mean continuing pressure to increase bills
Gas and electricity prices may have to rise further, warns industry body
Energy UK chief tells MPs rising wholesale prices and government subsidies mean continuing pressure to increase bills
Wednesday 22 February 2017 15.11 GMT Last modified on Thursday 23 February 2017 16.47 GMT
Britain’s big six energy suppliers are under pressure to pass on more price hikes to consumers’ energy bills, the industry trade body has warned.
Npower, EDF and Scottish Power have already announced price rises for millions of customers, blaming a mix of rising wholesale costs, installation of smart meters and government policies paid for through bills. British Gas has frozen prices until August, while SSE and E.ON have yet to declare their intentions.
The chief executive of Energy UK, which represents most of the 40-plus energy suppliers, told MPs on Wednesday that the rises were justified.

Scottish Power customers to be hit by 7.8% price hike
Customers will see energy bills rise by £86 a year as supplier becomes third of the big six to raise prices
Read more
“It is plain that we have seen increases in wholesale prices over the last 12 months or so, and we can see going out into the future there are continuing pressures there,” said Lawrence Slade. He said month-ahead wholesale gas prices for March were 100% higher than last year, and electricity was up 69%.
In addition, the cost of government policies, such as subsidies added to bills to support renewable power, “should not be underplayed”, he said. Such costs would make up £120 to £140 of the average annual household energy bill next year, Energy UK said.
Slade refused to say whether he thought Npower’s recent electricity price increase of 15% was acceptable and said he had no knowledge of individual companies’ future pricing plans.
But the head of the energy regulator, Ofgem, dismissed the idea that government policies or smart meters were adding significantly to suppliers’ costs, and said increasing fossil fuel prices were the main pressure.
Dermot Nolan told MPs on the Commons business, energy and industrial committee said: “There were comments by a number of firms saying it was government policy or smart metering [driving hikes]. I don’t think the government policy is particularly valid on this point. I don’t think smart metering by itself will be driving significant increases.”
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He argued it was “hard for me to judge” whether Npower had justified the increase in its standard variable tariff. When pushed by the committee chairman, the Labour MP Iain Wright, on whether the regulator could cap such tariffs and if he was failing consumers by not doing so, the Ofgem chief executive said he did have such powers but the decision was one for policymakers, not him.
Despite acknowledging that the big six still had an 84% share of the market, Nolan told the MPs that the energy market was becoming more competitive. In a reference to the challenger companies First Utility and Ovo, he said the UK was moving towards having a big eight rather than big six.
Calls for a price cap, as proposed by the shadow chancellor, John McDonnell, are likely to be repeated in coming days.
On Wednesday, ScottishPower’s parent company, Iberdrola, announced net profit was up 11.7% to €2.7bn (£2.3bn) in 2016, and on Thursday the parent company of British Gas, Centrica, is expected to report that full-year earnings rose from £891m to £950m for its UK energy business. It is also anticipated that one of the medium-sized energy suppliers would announce a price rise on Thursday.
John Penrose, a Conservative MP, has written to the business secretary, Greg Clark, urging him to impose a relative price cap, so standard variable tariffs were not more than 6% above the company’s best deal.

Energy efficiency ‘bonfire’ after Brexit ‘could add £90 to bills’

Scrapping energy efficiency standards for household appliances and light bulbs after Brexit could drive up electricity bills by £90 a year.
According to the Energy and Climate Intelligence Unit (ECIU), appliances and light bulbs in the UK are currently more efficient due to EU standards.
However, there have been calls for a bonfire of the standards after Brexit, which will leave the nation to take back control of its own rules.
The ECIU believes a rollback of standards could also allow “supposedly cheaper” non-European models to come into the market.
Its analysis of the seven best-selling appliances and light bulbs in the UK found if all homes opted for less efficient models available on the Chinese market, the UK’s annual power use would increase by 3.5% – or half the expected generating capacity of the proposed Hinkley C nuclear plant.
Dr Jonathan Marshall, Energy Analyst at the ECIU said: “Once outside the EU, Britain will be able to set its own standards on the efficiency of our fridges and hoovers but heeding calls to throw current standards on a regulation bonfire could leave UK homeowners with an unexpected hike on their bills.”

Ofwat Publish TPI Principles for Water

Only a few days after the water market in England had been officially deregulated, Ofwat has taken the opportunity to push ahead with their plans to implement a non-binding code for TPI,s. This was the softer of the two approaches they discussed in their consultation document, published in March of this year.
As it is non-binding, it is not a requirement for those looking to trade. That isn’t to say that the code is something that should be ignored. Ofwat is set to engage with the UK government to become the de facto enforcement authority within the fledgeling new market. One benefit of signing up for TPIs is; that while it is voluntary, they plan to highlight which TPIs have signed up to such codes on a public register. The Principles can be seen below:
Principles for Voluntary Industry TPI Codes of Conduct for Water
1. TPIs shall be fair, transparent, and honest
2. Communication with customers (business, charity, and public sector) shall be in plain and clear language
3. All information provided to customers by a TPI shall be reliable, accurate, complete, timely and not misleading. Such information shall be made through appropriate channels and enable customers to make informed choices
4. TPIs shall not offer products that are unnecessarily complex or confusing
5. TPIs shall not sell a customer a product or service that is not fully understood by that customer, nor sell a product or service that is inappropriate for that customer’s needs and circumstances
6. TPIs shall not exaggerate the savings that could be achieved by switching, but shall be as accurate as possible
7. TPIS shall inform any micro-business customers that they have a 14 day cooling off period
8. TPIs shall cancel any mis-sold contract without penalties
9. TPIs shall respond to customers in an appropriate and timely manner
10. Customer service arrangements and processes shall be accessible to and effective for customer
With the market is in its infancy, water is a great opportunity for those working in the energy sector to expand their customer-base, and strengthen their existing portfolio, by offering added value to their dealings. By being transparent and keeping the customers informed TPIs could become a valued partner to their customers’ businesses.
The flip-side is, those who choose not to adhere to this Code of Practice could find themselves pushed out of the market by brokers quick off the mark to sign up, and suppliers who choose only to deal with TPIs registered with the code, regardless of whether those brokers flout the principles.
If you’re interested in becoming a water broker then don’t hesitate to at info@atlanticgasandpower.com

Minimum Energy Efficiency Standards

From April 2018 legislative changes in the Energy Act 2011 bring MEES into effect. The changes to the Act will make it unlawful for commercial landlords to let/sublet properties in England & Wales with the two lowest Energy Performance Certificate (EPC) ratings of F and G, subject to certain exemptions.
If you are managing or letting a property with a F or G EPC rating then you will need to take action to raise the energy efficiency of the property before the deadline.
Complying with MEES
AGP can help you comply in a number of straightforward and cost effective ways, including:
• Making sure your EPC data is accurate
• Finding a solution for the most cost effective methods to comply
• Project managing the required work
If you have a portfolio of properties we can manage the energy efficiency of them all, to ensure you comply with MEES, maximise energy efficiency, achieve cost savings across your portfolio and increase the value of your investment.
This does not necessarily mean huge expense or major site changes. Wherever possible we are recommending a programme of soft refurbishment to meet the MEES requirements.
What are the penalties for non-compliance?
The MEES Regulations will be enforced by Local Weights and Measures Authorities (LWMAs). LWMAs will have powers to impose civil penalties which are set by reference to the property's ratable value.
The penalty for renting out a property for a period of fewer than three months in breach of the MEES Regulations will be equivalent to 10% of the property’s ratable value, subject to a minimum penalty of £5,000 and a maximum of £50,000. After three months, the penalty rises to 20% of the ratable value, with a minimum penalty of £10,000 and a maximum of £150,000.
Where a property is let in breach of the MEES Regulations or where a penalty is imposed, the lease as between the landlord and the tenant remains valid and in force.
See this link
The AGP team have been working with clients to prepare them for the forthcoming changes. We would be happy to discuss the best approach for you and your property portfolio. For more information on MEES please email info@atlanticgasandpower.com