Energy and Utilities Update | 26 March 2020

Written on 26 Mar 2020

Welcome to our latest update on regulatory and market developments in the energy and utilities sector. In this edition we look at how the UK government is working with energy companies to respond to coronavirus, the Budget's commitment to infrastructure spend, a £90 million funding boost to support trials for new transport innovation, and more.

How is the UK government working with energy companies to respond to coronavirus?

The UK government has announced emergency measures agreed with energy retailers to protect customers left vulnerable as a result of Covid-19.

All customers with prepayment meters who are unable to add credit may explore different options with their suppliers to ensure the continuity of their energy supply. Any customer in financial distress may seek support from their supplier and  the disconnection of credit meters will be suspended altogether.

Octopus, an electricity and gas supplier specialising in sustainable energy, had already announced that they are making emergency credit available for vulnerable customers, who may be affected by the Covid-19 virus. Other measures include remote working for Octopus staff, as well as making alterations to staff working schedules.

Similarly, Npower is urging customers who may struggle to top up pre-payment meters due to self-isolation to get in contact with their supplier as soon as possible. It is expected that the energy industry will release further guidance for its customers over the next few days.

Read more here.

The Budget's commitment to infrastructure spend

The UK's first Budget since October 2018 was announced on 11 March, and included a £640 billion commitment to infrastructure spending, including £27 billion to be spent on strategic roads between 2020-2025. The government is due to publish a more detailed statement in the form of the National Infrastructure Strategy later in the spring.

The Budget also showed a commitment to environmental initiatives, including a Carbon Capture and Storage Infrastructure Fund, a Green Gas Levy and an increase to the Climate Change Levy rates that businesses pay on gas.

Notably, the budget predated the majority of the extensive measures recently announced by the Chancellor to tackle Covid-19, and it remains to be seen how the outbreak will impact upon the timetable for the delivery of the commitments announced in the budget.

Read more here.

Funding for electric charging points

Triodos Bank, a sustainable bank, has provided finance to Pod Point, a charging network developer. As one of the UK's largest charging network developers, Pod Point will use the funding to develop charge points at 600 Tesco stores. This model is sponsorship-based, and the charge points will have screens capable of displaying advertisements. The charge points will therefore be free for customers to use, and complement Pod Point's existing portfolio of 62,000 charging points across the UK.

The move from Triodos Bank is their first loan to support electric vehicle charging in the UK. Pod Point will also receive finance from Tesco and Volkswagen to supply the charge points.

Read more here and here.

The UK government commits £90 million funding to greener journeys  

The UK government has announced a £90 million funding boost to support trials for new transport innovation with a focus on electric scooters and drones.

Trials of e-scooter networks and medicine delivery by drone are to be held across 3 areas in the UK. The data collected will be used to shape future action on decarbonisation.

The pilot scheme is part of a regulatory review entitled "Future of Transport", which was launched by the UK Government on 16 March and is committed to making journeys "easier, smarter and greener".

Read more here.

Planning applications for UK renewable energy projects at four year high   

PX Group, an infrastructure solutions business, estimates that in 2019 there were 269 planning applications for new wind, solar and bioenergy projects. This is the fourth consistent year of growth in such applications and represents a 75% increase on the number of such planning applications made in 2016.

This increase is the result of lower technology costs and greater support from financial backers looking to make returns on renewable energy.

It is predicted that the numbers of clean energy projects will continue to rise in the coming years in light of the government's decision earlier this month to lift the block on subsidising onshore wind projects that has been in place since 2016.

Read more here.

UK's first residential avenue fully converted to lamppost charging for electric vehicles

The City of Westminster in London is now home to the UK's first residential avenue to be fully converted to lamppost charging for electric vehicles (EVs). This is the result of a collaboration between Siemens, a producer of energy-efficient technologies, EVs  provider Ubitricity and Westminster City Council.

Sutherland Avenue is over half-a-mile long and has a charging point installed in each of the 24 lampposts along the street. The two adjoining roads are set to be completed with lamppost chargers in the next few weeks.

There has been a 40% increase in EVs being charged in the Borough of Westminster during 2019. The borough already has more charge points than any other UK local authority and there are plans to increase to 1,000 charge points within the next year.

Read more here.

Gnergy becomes the first energy supplier to cease trading in 2020

Gnergy Limited, a small energy provider, has ceased trading, following a struggle to pay its debt to Ofgem.

In October 2019, Ofgem issued Gnergy with a final order over its failure to pay £673,800 in renewables obligation payments. This was followed by a notice of failure to comply in January this year.

Ofgem will appoint a new supplier for Gnergy's 9,000 domestic customers along with its handful of non-domestic customers. The energy regulator has sought to reassure customers that their energy supply is safe and has urged customers not to switch supplier.

Read more here