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Npower Sells Power and Gas Subsidiaries for £218m

20 Nov 2013

On 19 November, RWE npower and Telecom Plus agreed the sale of RWE npower Limited’s subsidiary companies, Electricity Plus and Gas Plus, to Telecom Plus Plc, the owner of the Utility Warehouse brand. The transaction is subject to both the approval of Telecom Plus shareholders and the OFT; Completion is expected in late December or early January.

Once complete, this transaction will result in Utility Warehouse further enhancing its position as a major force in the UK energy supply market with more than 770,000 customer accounts nationwide.

Telecom Plus Plc will pay Npower Limited an initial £196.5m for the companies and their electricity and gas customer accounts, with a further £21.5m paid after three years. Telecom Plus and RWE npower have also agreed a new wholesale supply agreement, under which npower will continue to supply electricity, gas and other services to Electricity Plus and Gas Plus for the next 20 years at a more competitive rate.

Paul Massara, CEO of RWE npower, said,
“In one move we have helped to create the biggest independent competitor in Britain’s household energy supply market. This is good for competition and good for consumer choice. Today’s announcement shows that Britain is well on the way to having a Big 7 rather than a Big 6.”

“Both Electricity Plus and Gas Plus have expanded substantially over recent years and we are pleased to be able to provide long term support for an entrant which now has more than 770,000 customer accounts nationwide. This shows that there is a willingness to compete in Britain’s energy market, and that the market is anything but broken.”

“This is good news for Utility Warehouse customers, for npower, and for the energy industry.”

Charles Wigoder, Executive Chairman of Telecom Plus said,
“This is a transformational deal for the company, delivering significant earnings enhancement, a revised and improved twenty year supply agreement with npower and the opportunity for us to provide even more competitive energy prices to our customers in future. The combination of these will play a major role in helping us accelerate our current rate of high quality organic growth, and achieve our goal of supplying our unique multi-utility proposition to more than one million households over the medium term.”

Story appears courtesy of Npower

Severn Trent Appoint Liv Garfield as New CEO

18 Nov 2013

The Board of Severn Trent, the UK’s leading provider of water and waste water announces today the appointment of Liv Garfield as the next Chief Executive. Liv is currently CEO of Openreach, part of BT Group and will take up the role on the retirement of Tony Wray in spring 2014.

Liv has been at BT since 2002 and has been CEO of Openreach since 2011. During her time at BT she also held the positions of Group Director of Strategy and Regulation, MD Commercial & Brands and UK Customer Services Director, within BT’s Global Services division.  Liv is also a non executive director of Tesco plc.

The Board confirms that there is no relevant information to disclose under Listing Rule 9.6.13R (2) to (6).

Andrew Duff, Chairman of Severn Trent, said:
“We are delighted that Liv is joining us to be our next Chief Executive. Liv brings experience of managing customer service delivery and complex organisations in a regulated environment. We are all looking forward to working with Liv and warmly welcome her to Severn Trent.

It is a testimony to the quality of this company that we have been able to attract someone of Liv’s capabilities. This is in great part due to the outstanding job that Tony Wray has done during his time as CEO. Tony will retire in spring 2014 and the board would like to take this opportunity to express their appreciation for the very significant contribution that he has made.”

Liv Garfield said:
“I am really looking forward to joining Severn Trent. It is a leader in an industry going through significant change and has, at its heart, a commitment to serving its customers well. I look forward to building on the achievements that Tony and his colleagues have accomplished over these past years and to ensuring that Severn Trent continues to go from strength to strength, whilst delivering for all of its stakeholders.”

Story appears courtesy of Severn Trent.

Ofwat Rejects Thames Water’s 8% Price Increase

08 Nov 2013

Ofwat has decided to turn down Thames Water’s application for an additional price increase for 2014-15.

It was for Thames to justify that this increase was in customers’ interests. Within the three month timescale for assessing the application, Ofwat found that the evidence the company submitted did not justify its proposed £29, or 8%, additional increase in customers’ bills.

Ofwat’s chief regulation officer Sonia Brown said:
“We said we would challenge Thames’ application, in the interests of customers. We did just that and on the evidence provided we are not convinced that an extra bill increase is justified.”

This is Ofwat’s final decision on this application. Thames Water now has the right to trigger an appeal to the Competition Commission.

Ofwat’s decision means the maximum that Thames can add to customers’ bills for 2014-15 is still 1.4% above inflation, as set in the 2009 price review. Last week Ofwat’s chairman Jonson Cox wrote to all water companies asking them to consider whether they needed to increase their bills for 2014-15 by the full amounts set in the last price review, given the hard time their customers are facing.

On 2 December, companies will submit their business plans for the next price review, which will cover the period from 2015 to 2020. Ofwat has called on these plans to reflect their customers’ priorities, and believes there is scope for reductions in bills from 2015. If companies do not propose reductions, they will need to fully explain to their customers why. Jonson Cox last week repeated that Ofwat will set 2015-20 prices using an independent, rigorous process. Its final decision is due on these prices by January 2015.

Story appears courtesy of Ofwat


Government Unveils Energy Reforms

04 Nov 2013

The Government has unveiled a suite of developments in the energy market, including the view of immoral authorisations, increasing penalties for any such market manipulation and moves to make switching supplier simpler.

Energy Secretary Ed Davey said the industry needed to change to put consumers “in control”, during the continuing controversy over rising bills. Mr Davey has said that these reforms will make it easier for consumers to switch and get the best deal, which will force energy companies to compete more dynamically for their custom.

The minister announced plans to make switching simpler and quicker, and a new investigation into energy firms’ accounts, to make them more transparent on profits and prices, as well as increasing penalties for market manipulation and regularly checking that the market is working.

He said: “The energy industry needs to change to put consumers in control. That means making it easy for people to change supplier to save money, it means regular market assessments to check their behaviour, and it means tougher penalties for market manipulation and putting an end to opaque finances.”

(Source: The Telegraph, 4 Nov 2013)

Enzen to Speak at EUA Utility Asset Management Seminar

23 Oct 2013

Enzen are pleased to announce we will be participating in the Utility Asset Management Seminar, on 30  October 2013 organised by the Energy & Utilities Alliance (EUA).

Paul McKeon, Asset Management Principal at Enzen Global will be speaking on the day in Session 3 – Smart Utilities, Solutions and Continuous Learning. Please also come and visit our stand during the breakout sessions.

For more information or to book your place, please click here.

UK’s Big Businesses are Investing in Safeguards

22 Oct 2013

A survey, carried out jointly by the Major Energy Users’ Council (MEUC) and Power Efficiency, shows that more than 95 per cent of Britain’s biggest companies are investing in safeguards. This is following recent warnings from regulator Ofgem that the UK generating capacity is nearly at full stretch.

The survey, which contains the views of 129 major commercial and public sector energy users, found that 60 per cent of respondents were initiating ‘behavioural change programmes, while 50 per cent were investing in renewable energy sources. In addition, 43 per cent of the companies questioned said they were installing onsite generation.

According to the Ofgem, spare capacity could fall from today’s 14 per cent level to less than 5 per cent in three years, with a risk of blackouts starting in the winter of 2015-16.

Of the businesses surveyed, 35 per cent  said the Carbon Price Floor, introduced this year at £16 per tonne of carbon emissions is a cost which  will need to be passed on to their customers by increasing the prices of their products and services.

The survey also revealed that more than 90 per cent of the respondents think energy inflation “poses a major threat to UK competitiveness”.

Andrew Buckley, director general of the MEUC, said: “The parlous state of energy supply will come as little surprise to many in industry who have watched politicians sleep walk into this crisis of their own making. Whilst the relative merits of affordability, security of supply and environmental protection will continue no doubt to feature in the run up to the next election, business customers are having to take their energy future into their own hands now, as evidenced by the results of this survey.”

Source: Utility Week, 22nd October 2013

Oil & Gas UK appoint E&Y to assess the Industry

21 Oct 2013

The industry body Oil and Gas UK has commissioned new research into the economic contribution of the industry. They have appointed Ernst & Young to assess the billions of pounds the supply chain generates annually. The study would use data from more 1,000 companies, with the results expected to be released in March next year.

UK Business and Energy Minister Michael Fallon said gaining further insight was important. He said: “The UK’s oil and gas supply chain is highly robust with the potential to contribute significantly to economic growth over the coming decades.

“Gaining even further insight into its strengths and capabilities will only help to support the ongoing work of our joint oil and gas industrial strategy to create new jobs, encourage investment and increase exports.”

Oil and Gas UK’s business development director Stephen Marcos Jones said: “We have a world-leading global supply chain based here in the UK which we believe contributes £5-6bn every year to the Exchequer and exports £7bn worth of goods and services. “It is important we continue to make the UK an attractive place for these companies to stay.”

Source: BBC, 17 October 2013  

Ofwat to Reject Thames Water’s Proposed Bill Increase

18 Oct 2013

Ofwat has published a draft decision that would disallow Thames Water’s request for an interim increase in prices next year. Thames had asked to add an extra £29 or 8% to the annual average household bill. Ofwat’s draft decision is subject to a short period of technical consultation, which allows for the submission of new evidence. A final decision is due in early November.

Ofwat has examined the evidence of increased costs provided by Thames Water in its August application. Under the regulatory rules, Thames must satisfactorily demonstrate that the level of increased costs is above a certain threshold to permit any additional increase in bills between five yearly price reviews.1 This threshold equates to a bill increase of around £9 or above. Having examined Thames Water’s evidence, Ofwat believes their application falls below this threshold, with the company only providing sufficient evidence for increased costs associated with an annual bill increase of £7.

Ofwat’s Chief Regulation Officer Sonia Brown said:
“We said we would challenge Thames Water’s request. We have looked at the details and do not believe the current evidence justifies an increase in bills.”

Ofwat’s consultation on its draft decision gives all parties, including Thames Water, the opportunity to submit new evidence. Ofwat will consider any new evidence, which could then result in a change in its assessment of justifiable costs, before announcing its final decision in early November.

Story appears courtesy of Ofwat

SSE Increases Prices by 8%

15 Oct 2013

SSE Energy Supply Limited has called on government to protect customers by paying for environmental and social policies through taxation, instead of bills. That would cut a typical dual fuel bill by £110 this year and redistribute costs “to those more able to afford it”, it claimed.

They have said that wholesale energy costs have gone up by 4 per cent, network charges by 10 per cent and levies on bills to pay for government policies by 13 per cent since its last price rise a year ago, the company said the tariff hike, which kicks in on 15 November, was necessary because of increased costs.

Will Morris, group managing director of retail, said: “Over many years policymakers themselves have failed to highlight adequately the cost to consumers of the policies they have pursued in government.  They can’t expect to have power stations replaced with new technologies, the network to be upgraded and nationwide energy efficiency schemes all to be funded for free. And as an energy provider we are in the unenviable position of having to pass this cost on to customers through energy bills.

“We will work with any political party on initiatives to keep bills as low as possible for customers and, in turn, we urge them to work together to achieve consensus in energy policy. And if politicians want to do something to make bills cheaper and fairer, they should take the cost of government policies out of bills and fund them through general taxation instead. Why wait until 2015? This would be far more progressive as those who can afford it would pay more while those most at risk of fuel poverty would be protected – taking around £110 out of their bills immediately.”

Ed Davey, Energy Secretary hit back at the suggestion that policy costs were the main driver of price rises. He said: “Half of an average energy bill is made up of the wholesale cost of energy. This far outweighs the proportion of a bill that goes to help vulnerable households with their bills and to cut energy waste, and to encourage investment in the new low-carbon energy generation we need to keep the lights on. SSE’s own figures show that wholesale price rises have contributed more than policy costs to this price increase, as a share of the bill.”

The move was also criticised by consumer groups. Adam Scorer, director of Consumer Futures, said: ‘Although widely expected, this is the last thing consumers want as the Autumn chill sets in. SSE’s average direct debit, dual fuel, bill will be up to £1376 from £1272.

Source: Utility Week



£6 Million Funding for Local Authority Heat Networks

30 Sept 2013

A new £6 million grant funding programme has been launched to help Local Authorities (LAs) in England and Wales to develop new heating and cooling networks, and expand existing networks.

To win a share of the funding, local authorities must bring forward ambitious and innovative proposals to develop and deliver heat networks that – as much as possible – draw their heat energy from renewable, sustainable or recoverable sources.

This could include any system in which heat is generated off-site by renewable or recovered sources such as waste heat from industry, energy from waste plants and biomass combined heat and power. Many university campuses, new mixed commercial and residential developments and high rise flats draw their heat from these systems.

Energy and Climate Change Minister Greg Barker said:

“Increasing the use of low carbon heating in our buildings is helping to reduce our dependency on costly, imported oil and gas.

“Thanks to the Coalition Government’s support, many UK buildings have already made the switch from traditional fuels to low carbon heat sources. This new grant funding programme builds on these successes by helping Local Authorities develop more commercially viable low carbon heat networks.”

The bidding process to apply for grant funding starts today (20 September 2013) and will continue for 18 months through a series of six bidding rounds. Bids will be assessed against transparent and robust criteria. These include the potential for commercial development, contribution towards low carbon and energy reduction objectives, compatibility with wider low carbon and growth agendas (where applicable) and a demonstrable commitment to robust project management and governance.

Where applications are submitted that are considered to be realistic commercial propositions, but fall short of the threshold for funding, DECC will offer advice to local authorities on how to improve their applications within that or subsequent rounds.

Recent successful heat network projects include the Olympic Park District Heating and District Cooling Network. This comprises 18 km of distribution pipes that provided the London 2012 Olympic and Paralympic Games with efficient heating and cooling using gas and biomass boilers. This amounts to 100 MW of heating and cooling capacity, could expand to 200 MW in the future and is projected to save 11,000 tonnes of CO2 each year by 2015.

Story courtesy of  Department of Energy & Climate Change