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  • Criminal sanctions for gas and electric rigging introduced

    The government is taking steps to crack down on anyone who attempts to manipulate the energy markets. On April 13, 2015, the U.K.’s energy regulators will be given new powers to prosecute anyone suspected of rigging the wholesale electricity and gas prices.

    Under the new laws, it will now be a criminal offence for anyone to use insider information to buy wholesale energy products, or to artificially inflate the wholesale price of energy. Any individual convicted of these offences could face a two-year jail term.

    There are already regulations in place to try and prevent the rigging of the wholesale gas and electricity prices, and Ofgem already has the power to conduct investigations and to impose fines on the individuals and companies involved if it is found  they have flouted the rules, however, until now it has not been a criminal offence.

    As well is facing a possible jail sentence, anyone convicted will also receive a criminal record, and companies that are found guilty will face similar sanctions.

    The government believes that by introducing an additional criminal offence, it will act as a deterrent.

    Commenting on the new announcement, Energy and Climate Change Secretary Ed Davey said:

    “Manipulating the energy market is absolutely unacceptable – which is why we’re introducing the strongest possible sanctions, including prison sentences”.

    “Tougher penalties will help to create a fairer and stronger market, providing more protection for bill payers and building on action we’ve already taken to increase competition, drive down bills and make it easier and quicker than ever for consumers to switch energy suppliers.”

    Ed Davey first proposed the new measures to criminalise energy price rigging in 2014 and a public consultation was later launched.

    Speaking at the time of the proposals, Energy UK told The Independent:

    “Energy companies welcome scrutiny about how the market is working and our members have nothing to hide.

    “Energy companies are also committed to quick switching and have kept government fully informed of the work already underway to cut switching times dramatically while making sure customers’ consumer rights are protected. Already around one quarter of a million customers switch every month, proving it is not only possible but easy.”

    Ofgem investigation

    There has been a previous year-long investigation into allegations of price rigging in the industry, however, after a 12 month review Ofgem and the Financial Conduct Authority concluded there was no further action to be taken regarding the claims.

  • Didcot A demolition continues

    In 2012, Npower announced the famous Didcot A tower was to be demolished. Now, Npower has announced the demolition, which is being carried out by specialist firm Coleman and Company, is nearly a third of the way complete. So far, three of the cooling towers have been demolished and the Didcot A coal yard has also been destroyed.

    The 47 hectare site that was left behind following the demolition of the coal yard has now been sold to developers Clowes Development Limited and a consultation process is now underway to determine what will become of the land.

    In addition, Turbine Hall has also been demolished and recovery of the remaining scrap is still continuing. Thus far, 20,000 tonnes of scrap materials have been collected and 36,000 tonnes of concrete from the site has been recycled; many of the tanks that were used to fuel the Didcot A tower have been demolished and the external ductwork has been taken down.

    Work will continue on the site well into 2016. The main stations buildings are scheduled for demolition in the summer of 2015 and the north cooling towers and chimney are likely to be demolished the following year. It is predicted the demolition of the site will be completed by September 2016.

    The Didcot A power station closed in 2013 after being in use for more than four decades. Speaking at the time, a spokesperson for Npower said the decision to shut down the power station was “driven by government policy” and the need to replace less energy efficient means of power generation with low carbon alternatives.

    The first towers were felled in July 2014; it took less than ten seconds to demolish them. The demolition of the towers was described as a sad day and the end of an era for Npower.

    Speaking at the time, Alan Robinson Chief Commercial Officer for Npower, said:

    “In anticipation of the closure of older coal-fired power stations, such as Didcot A, RWE has invested strongly in modern gas-fired stations. Didcot A has played a vital role in ensuring security of supply for the UK for over 40 years. Our new gas stations are continuing where Didcot A left off by providing reliable, low-cost electricity.”

    “RWE has invested more than £6bn in the UK in new renewable technologies and state-of-the-art gas-fired power stations, which will continue to help keep the lights on whilst dramatically reducing environmental emissions”.

  • Didcot B back online following fire

    The Didcot B Power Station is back online following a fire that occurred in late October. It was eight days before the power station was in action again and repair work is still continuing; until the affected module is repaired fully the tower will only work at 50% of its usual capacity.

    The fire began on a Sunday evening and affected one of the cooling modules in the Didcot B Power Station; the tower stands alongside the Didcot A tower, which was decommissioned in 2012.

    When the fire broke out, an emergency team put in place a co-ordinated plan and worked alongside local emergency services to extinguish the flames as soon as possible. The Fire Brigade stayed on site until the next morning and then control of the cooling tower was handed back to the team at Npower. The fire caused millions of pounds worth of damage, and 25 fire engines were called to the scene.

    It is still not known what caused the fire; Npower have stated that an investigation is being held into the cause. While the investigation is underway, the cooling tower, which is one of two at the Didcot B plant, will remain out of use. Npower are unable to say how long the module will be out of action for.

    In a statement, Npower said that the power station was shut down as soon as the fire began to take hold and that there was no injuries caused to staff at the plant; the public were not put at risk as a result of the fire.

    Roger Miesen, Head of Hard Coal and Gas, on the RWE Generation board, said:

    ‘It’s good news that Module 5 is back online so quickly. It will be available to generate power this winter and essential repairs will be in the region of single digit million pounds. Didcot B, as part of RWE Generation’s wider fleet, has an important part to play in contributing to the UK’s security of supply.

    ‘Our thanks go out for the fantastic response and dedication of the emergency services who worked alongside RWE teams to bring the fire under control quickly and safely. Huge credit is also due to the RWE site and central engineering teams whose expertise meant that we are able to bring Module 5 back into service after only nine days.’

    The gas-fired power station creates enough energy to power 1 million homes, but energy supplies were not affected. 

  • Didcot B repair work announced

    Npower has announced a programme of works to restore the Didcot B cooling tower, which was damaged as a result of a fire in October 2014.

    The energy company has been searching for contractors to undertake the project to repair the damage that was caused to module five of the Didcot B cooling tower in Oxfordshire. The search to find contractors took six months and Npower have now announced that SPX Cooling Technologies has been selected to complete the repair work.

    Cells 19 and 22 of the cooling tower were also damaged during the fire, but this was only minor. Npower states that they will be back in service in the summer of 2015 and cells 20 and 21, which received more extensive damage, should be restored and be back in use by September 2015.

    Work will also need to be completed to repair the fans of the cooling towers; it is expected that this work will be finished by December 2015.

    Due to damage that has been caused to the towers, Npower state that it will be necessary to rebuild the entirety of some units. However, components that weren’t so badly affected by the effects of the flames can be repaired.

    As well as employing outside contractors to do some of the work, the owners of Npower, RWE, will complete some of the repair work itself.

    Commenting on the repairs, the manager of the Didcot B power station said:

    ‘We are pleased to announce the project to repair the cooling tower of Module 5 has begun. The power station has been available to generate since the fire but the repairs will enable us to achieve a higher efficiency, and full station capacity as we approach the winter months.’

    ‘I would like to again thank the emergency services who worked alongside RWE teams to bring the fire under control quickly and safely.’

    The Didcot B power station fire made headline news in 2014. The BBC reported that 100 firefighters and 25 fire engines were called out to control the blaze. As a result of the fire, Npower said the station would need to be closed down for the foreseeable future while the repairs were carried out.

    The fire started in one of the Didcot B cooling station but soon spread to a number of the other towers.

    Following an investigation into the cause of the fire, Npower have since identified a fault within the fan unit, which the power company says started the blaze.

  • Doubt surrounds UK Steel manufacturing industry

    Uncertainty continues to surround the UK steel manufacturing industry following a review by Tata of its European Portfolio. In late March it was announced that due to the demand for steel being on the decline across the globe, the current excess of steel supplies and excessive manufacturing costs, the future of Tata steel plant in Port Talbot is now in doubt.

    A plan for Strip Products UK, which aimed to transform and restructure the business, was also deemed as unviable during the review, and it was decided that the Tata steel board would not be able to fund the plan.

    Heavy Losses and Proposed Sale

    It has been reported that the Port Talbot plant is losing £1 million and a day, however, these figures have not been confirmed and there is a question mark over the precise amount of the losses.

    There have been calls for the government to take ownership of the plant, but this is a plan that has been rejected by the Prime Minister and the only hope to save thousands of jobs is to sell the Tata steel plant.

    Sajid Javid Criticism

    Business Secretary Sajid Javid faced criticism for being on holiday at the time the news was announced, however, Mr David has said in a statement on his website that it was his efforts that convinced Tata to put the plant up for sale rather than close it down. The Business Secretary also defended his party’s efforts to support the manufacturing industry in the UK, specifically the steel industry.

    However, Stephen Kinnock, the Labour MP for Aberavon has described the Tory party’s response to the steel industry’s predicament as “a mixture of incompetence and indifference” and he has started the #saveoursteel campaign.

    CBI statement

    The CBI has issued a statement regarding the current steel manufacturing crisis. The CBI Deputy Director-General for policy and campaigns, Josh Hardie, said:

    “It’s clear that firms in our steel industry face major global challenges to stay competitive.

    “Our industrial base can best be supported by developing a long-term industrial strategy, protecting research and development investment to help raise productivity and ensuring energy costs remain competitive.

    “The Welsh and UK governments must work together, alongside businesses, to maintain and increase investment in Wales.”

    Liberty House and steel group with offices around the globe are reported to be interested in purchasing the plant, however, there are some concerns that government funding would need to be made available if the sale is to go ahead.

    It came shortly after the company has announced a deal to sell its plants in Scotland. The Clydebridge and Dalzell steel plants are to be sold to the Scottish government and they would then be sold on to liberty House.

  • Energy auctions drive renewable prices down

    The Department of Energy and Climate Change says its energy auctions have led to 27 renewable energy projects being offered new contracts. The Government says the energy projects will create enough power for nearly 1.5 million homes.

    As a result of the auctions, the National Grid predict £315 million a year in new contracts will now be made available to five renewable energy companies. Some of the contracts will be given to companies that specialise in renewable forms of energy such as onshore wind and solar power, which is growing in popularity. However, contracts are also to be offered to offshore technologies.

    The auctions were part of the Government’s Contracts for Difference initiative, which has been designed to help reform the energy market in the UK by encouraging investment into greener forms of power generation. Successful bidders will get contracts that will last for 15 years.

    As a result of the auctions, there could be two new offshore and 15 new on shore wind farms. It could also lead to the establishment of 5 new solar projects.

    Price Reduction

    The Government says the green energy auctions have helped to dramatically reduce prices for green energy by up to 58% in some cases; the move towards greener forms of power generation will also help to considerably reduce CO2 emissions, thus helping to create a cleaner environment.

    In a move to drive down the prices of renewable energy, as part of the auctions, contracts were only offered to the companies that gave the most competitive prices. The Government says this means consumers will get much better value for money.

    As well as a 58% reduction in the price of solar energy, offshore wind energy has been made 18% cheaper, while onshore forms of energy are 17% cheaper.

    Commenting on the auctions, Ed Davey, Energy and Climate Change Secretary, said:

    “This world leading auction has delivered contracts for renewables projects right across the UK. These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to home-grown energy while reducing our reliance on volatile foreign markets”.

    “The auction has driven down prices and secured the best possible deal for this new clean, green energy.”

    The contracts will be awarded to companies based in England, Scotland and Wales and will include both small businesses and independent generators.

  • Energy price rigging could lead to two year jail term

    New proposals put forward by Energy and Climate Change Secretary Ed Davey could lead to anyone found guilty of rigging energy prices facing a jail term of up to two years, it has been announced.

    If the new laws are introduced it could mean that energy regulators will be given new powers to prosecute if it is suspected that someone has rigged gas and electricity prices. Moreover, if the laws were brought into force it would mean that if anyone was to make misleading claims about wholesale energy prices in a bid to manipulate the market, they could be charged with an offence.

    Commenting on the proposed new laws, Ed Davey said:

    “Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.

    “The government is doing everything it can to help consumers by increasing market competition to drive prices down. We have also set up the first ever annual competition assessment, which has led to the first ever referral of the sector to the competition authorities.”

    Current regulations mean that energy regulators have the power to investigate anyone that is suspected of breaching the rules and they can impose fines. However, a change in the law would mean much harsher punishments and could lead to a prison term of up to two years.

    The government has announced the proposals as part of its attempts to reform the energy market so that consumers’ rights are put first. The announcement is part of the government’s attempts to loosen the stranglehold that the big six energy companies have on the energy market. The government also hopes that its actions will lead to greater competition in the energy sector

    It has also been announced that there is to be an investigation into competition and transparency in the retail energy market. The investigation is considered necessary to restore the confidence that has been lost in the power industry in recent years.

    Commenting on the new proposals, Rachel Fletcher, senior partner, markets, Ofgem, said:

    “Ofgem has a track record for taking strong action against companies that break the rules. And we want the strongest possible deterrents in place to guard against market manipulation and insider trading. We put forward the case to government for greater powers to take action if needed, and we welcome this consultation.”

  • Exports stall for small and medium sized manufacturers

    While small and medium sized manufactures in the UK have announced new job opportunities, increased orders and more domestic orders, they are still struggling when it comes to exporting goods.

    According to the statistics from the CBI SME Trends Survey, domestic orders remained steady, but export orders show little sign of picking up. It is also predicted that domestic orders will continue to increase in the next quarter, but small and medium sized manufacturers remain pessimistic about the future for exporting.

    A quarter of the 426 businesses surveyed stated their exports increased, but 28 per cent said they have fallen. These statistics are the same as the last quarter and companies expect the export market to remain unchanged in the near future.

    Moreover, there was less optimism surrounding the future for exports in the coming year, and a number of firms expressed concerns over how the exports would be affected by political and economic conditions.

    Export Challenges

    There are several factors making exports a challenge for UK-based businesses. The increase in the Pound against the European currency means UK firms are less competitive, while the on-going financial problems in Greece are causing continued concern.

    Katja Hall, CBI Deputy Director-General, said:

    “Smaller manufacturers are reporting solid increases in output, orders and jobs. While growth was a little slower this quarter, they expect a pick-up in activity in the next three months.

    “However, prospects for exporting to the rest of Europe remain a concern. Sterling’s recent rises against the Euro may mean more money in the back-pocket of holidaymakers, but it makes it that bit tougher for British manufacturers to stay competitive and sell inside the Eurozone.

    “Business will also be keeping a close eye on how the Greek situation develops in the coming weeks.

    New Government

    However, with a new government about to be elected, firms are hopeful there will be a more concerted effort to develop a long-term export strategy for the future, and businesses hope that this will be adopted sooner rather than later, as the CBI makes it clear exports are key for helping to keep economic growth on track.

    Employment Prospects and Output

    Nevertheless, despite the continued negative outlook for exports, employment prospects are looking up. Job creation in the manufacturing sector continued in the last quarter and at better than average rates. Moreover, job creation is predicted to grow in the next three months as well.

    Output was also on the increase; this trend is expected to continue into the next quarter.

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  • Fortunes improve for small and medium-sized businesses

    Small and medium-sized manufacturing businesses in the UK are continuing to see their fortunes improve, according to the latest survey from the CBI. The survey, which reflects the last three months of trade, shows that the output in growth and the increase in orders have continued.

    For the fourth consecutive quarter, domestic orders and output both showed vigorous growth and it is expected that the upward trend will continue throughout the next quarter.

    Job Creation

    There was also good news on the job creation front. In the last quarter small and medium- sized manufacturing companies have seen a dramatic increase in the number of people employed in this sector; last quarter’s figures for employment showed the strongest growth since records began in 1988. However, while firm's optimism was up in the latest survey, it wasn’t as high when compared with the last quarter.

    Investment

    Smaller manufacturers also stated that they plan to invest in machinery in the next twelve months; however, many of the manufacturers don’t intend to invest in new buildings in the near future.

    Export Orders

    The one weak point for small and medium-sized manufactures continues to be exports. Exports remained flat in the last quarter. However, many were optimistic that export orders would begin to improve again in the next few months,

    Commenting in a press release, Katja Hall, CBI Deputy Director-General, said:

    "Smaller manufacturers are settling into a regular growth pattern, with their order books and output growing for the fourth consecutive quarter.

    "Firms remain upbeat about their business situation and they are hiring at their fastest rate since 1988.

    "But export orders have underperformed this quarter, which may in part be because of the strength of Sterling.

    "We need the Government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth."

    Key Findings

    Key Findings from the latest CBI survey showed that 36% of small and medium-sized businesses experienced a growth in orders in the last quarter.

    31% of companies said that their order output was on the increase and 16% experienced a decrease.

    36% of firms had an increase in domestic orders, but 19% of companies said that their orders fell.

    And 34% of companies announced an increase in employment, but 9% said that there had been a fall.

  • Four companies shortlisted for windfarm contract

    Four bidders have been added to a short list to own and run a transmission link for two offshore windfarms, Ofgem has announced. The competition to win the contract has been strong and the shortlisted companies are competing to own and operate more than £400 million pounds worth of high-wattage transmission links for two windfarms, which are based in the UK.

    The shortlisted bidders will now go through to the final stages of the bidding, and then Ofgem will make its decision over which company will be awarded the contract to own and manage the transmission links.

    The bids relate to the Westermost Rough and Humber Gateway projects and the bidding is part of the offshore regulatory regime, which was first announced as a partnership by the Department of Energy and Environment and Ofgem in 2009. The regime allows tendering for licensing offshore electricity transmission and the aim is to keep the cost of transmission links as low as possible for consumers.

    Once the contract has been awarded, the new Offshore Transmission Owner will be given a 20-year license to own and operate the links, Ofgem said. The four shortlisted bidders have been named by Ofgem as the Balfour Beatty Equitix Consortium (Balfour Beatty Investments Ltd and Equitix Ltd), the Blue Transmission consortium (3i Investments Plc and Mitsubishi Corporation), Mari Energy Transmission (Macquarie Capital Group Ltd and Frontier Power) and Transmission Capital Partners (Transmission Capital Partners Ltd Partnership and International Public Partnerships Ltd).

    Westermost Rough is situated in the North Sea and it is owned by WMR limited, which is part of Dong Energy A/S. There are 35 wind turbines on the wind farm and they are capable or producing 205 megawatts of electricity.

    A transmission system is being developed by the owner of the offshore windfarm, and as part of the construction there will be an offshore substation platform, offshore and onshore AC export cables and an onshore substation.

    Humber Gateway offshore windfarm is located off the coast of North Yorkshire and it is owned by E.ON Climate & Renewables UK. Eventually, it will have 73 wind turbines, which will have the power to produce 220 megawatts of electricity.

    Ofgem says that the transmission system is being constructed by the owner of the farm; as with the other windfarm the construction will include an offshore substation platform, offshore and onshore AC export cables and an onshore substation.

    Ofgem says that is expects to name the successful bidder for the Westermost Rough and Humber Gateway projects in 2015.

  • Fresh concerns over manufacturing industry

    CBI urges government to support manufacturing industry

    The CBI has urged the government to take more action to support the manufacturing industry. Carolyn Fairburn, Director-General of the CBI made a speech on Thursday, May 5, in which she called on the government to back an industrial strategy for the future.

    As part of the strategy, Ms Fairburn stated that each part of the manufacturing industry should have a strategic plan. The Director-General said:

    “Every manufacturing sector should have a plan for its future and many already do - we would suggest that each plan addresses these three questions.

    “First, is the sector strategic for the UK?  Second, is the sector currently globally competitive, and if not why not? Does the UK have a competitive advantage?

    “Third, what actions could government and business take to make it more competitive?”

    Key factors holding back manufacturing

    During the speech, Ms Fairburn detailed how three key factors: skills, energy and research and development were holding back the manufacturing industry.

    The director-general called for more action to be taken to encourage young people to join the industry by highlighting what manufacturing looks like in the 21st century, rather than the old fashioned image some might have of it.

    Energy Costs and Research and Development

    While measures have been put in place to reduce energy costs of businesses, Ms. Fairburn stated they needed to be more of effort to find cost effective sources of energy to fuel businesses, which will help make them more economical to run, and she also urged the government to commit more funding to research and development in the manufacturing industry.

    Concerns over Manufacturing

    Ms. Fairburn’s speech comes at a time when they are a number of concern over the future of the manufacturing industry in the UK. The steel industry faces an uncertain future as workers at Tata wait to find if a buyer for the plant will be found, and the PFI figures are the worse for three years.

    The uncertainty surrounding June’s Brexit vote is also fuelling the uncertainty that surrounds certain sectors of the UK’s manufacturing industry.

    Markit Performance Marketing Index

    The report by Markit highlighted concerns over the UK manufacturing industry and the effect this might have on the wider economy. Currently, there is a decline in domestic demand and in export orders. Moreover, there have been job losses in the sector in four consecutive months, according to the latest figures.

  • Galloper Windfarm gets £1.5 billion investment

    Three companies have invested into the Galloper windfarm project, helping to secure £1.5 billion of funding. The new project partners are the UK Green Investment Bank, Siemens Financial Services and Macquarie Capital. Each of the companies will have a 25% equity in the windfarm, and they will be joining forces with RWE Innogy to move the project a step closer to reality.

    Welcoming the announcement, Energy Minister Andrea Leadsom said:

    “This is fantastic news for the region and the whole of the UK, reflecting the fact that we are open for business and the best place in the world to invest in offshore wind. This milestone shows how the UK’s offshore wind industry is going from strength to strength.”

    Commenting on the investment from the three firms, Hans Bünting, CEO of RWE Innogy said:

    “Today’s announcement is the culmination of many months of successful negotiations with our partners and investors and shows that the UK is still a strong market for offshore renewables”.

    Bünting added that securing the financing from the three partners was vital for keeping the project “on track”.

    In addition to its investment, Siemens will be supplying and installing 56 6 MW turbines as part of the Galloper windfarm, and they have signed up to a 15 year contract to provide ongoing maintenance.

    Head of Investing for the UK Green Investment Bank, Ed Northam, described the investment as a significant milestone in the development of the UK offshore industry.

    Construction work on the project, which is situated off the coast of Suffolk, will begin in November 2015. It is estimated the construction work will create approximately 800 new jobs, and when it is complete the windfarm is expected to produce enough energy to power more than 300,000 homes.

    When the project is up and running, the windfarm is likely to employ 90 people to keep the site operational.

    Project completion

    Permission for the Galloper windfarm was first granted back in 2013; cabling work got underway in 2014. It will be situated 27 km of the Suffolk coast and it will have the capacity to create 336 MW.

    In January 2016, work will begin at Sizewell beach to lay the cables and offshore construction work is scheduled to start in November 2016. The completed project will also have 6MW turbines and one substation.

    When it is finalised, the Galloper windfarm will be situated near to the Greater Gabbard windfarm, which opened in 2012. The Galloper windfarm is expected to be operational from 2018.

  • Gas and oil production in the UK predicted to increase

    The UK’s gas and oil production increased by 7 per cent in 2015, according to new figures released by Gas and Oil UK, however, it is warning that it will be difficult to sustain these levels during the coming year.

    In a statement, Oil & Gas UK’s chief executive Deirdre Michie, said:

    “Government data for the first 10 months of 2015 shows that the total volume of oil and gas produced on the UK Continental Shelf (UKCS) was up 8.6 per cent compared with 2014, with the production of liquids up 10.6 per cent and gas up 6.1 per cent.

    “Output in November and December tends historically to be more stable, but even so, Oil & Gas UK now expects year end production for the full year of 2015 to be seven to eight per cent higher than last year.”

    However, Michie also made it clear that gas and oil production will face many challenges in the year ahead; the most pressing challenges for the offshore gas and oil industry include the low prices for oil, and the sector is also facing job losses.

    In a recent statement, Michie also spoke of the importance of a resilient gas and oil industry, and it is imperative that the gas and oil industries adapt their strategies if they are going to compete globally and gain vital investment.

    The official announcement that production was on the increase followed predictions issued by the government in late 2015, but figures are expected to decline from 2020, according to the UKCS Oil and Gas Production Projections.

    New Initiatives

    A number of new initiatives were introduced in 2015 to help bolster the gas and oil sector in the UK. In late 2015, an Industry Behaviours Charter was signed by the Oil and Gas UK Board. The aim of the charter was to improve efficiency in order to transform the offshore gas and oil industry and enhance collaboration between SMEs, contractors and operators, as well as to develop new business models.

    In addition, the Rapid Efficiency Exchange was launched to allow gas and oil companies to come together to share useful advice on improving efficiencies in the industries, while also providing a forum to discuss the challenges that face the sector.

    Government support

    Oil and Gas UK added that an important factor for the future of the industries would be support from the government and HM Treasury.

  • Government announces energy security measures

    The government has announced a series of steps intended to reform the Capacity Market and secure energy supply. The reforms follow an earlier consultation, which was held in March.

    The changes announced by the Department of Energy and Climate Change are being taken to better cater for the demands of energy during peak times, to help keep costs down for both businesses and domestic households alike, and to help secure the future of energy supply in the United Kingdom.

    The core reforms

    The reforms have resulted in a number of core changes. The first major transformation announced is that more energy is to be purchased, and the date for buying it is to be brought forward. There will also be increased sanctions for companies that do not comply with their Capacity Market agreements.

    As a result of the reforms, the next energy auction is due to be held in January 2017 to help secure energy supplies for the coming year. The government is yet to set a target of how much energy is to be purchased, but it is likely to increase significantly in order to enhance capacity. However, a final decision will not be made until June, when the final details will be made public.

    The Energy Bill

    In a further effort to secure energy supply, the government has formerly introduced the Energy Bill. The bill includes a number of measures in order to help the government reach its commitments to affordable, greener forms of energy.

    The Energy Act will introduce a number of powers to ensure stronger support for the North Sea oil and gas industry. It will also give local communities a greater say when it comes to the introduction of new wind farms, and it will mean the Renewables Obligation subsidy will face an earlier closure; it will no longer be available to new offshore wind projects.

    As a result of the new act, the Oil and Gas Authority will be given a much broader range of powers, and the regulatory controls that were previously the responsibility of the Secretary of State are to be transferred to the Authority.

    Commenting on the announcement, Amber Rudd, Secretary of State for Energy and Climate Change said:

    “By strengthening the Oil and Gas Authority and giving it powers to drive greater collaboration and efficiency in the industry, this Act shows that the broad shoulders of the UK are committed to helping our oil and gas industry attract investment, support jobs and remain competitive for the future”.

  • Government announces licenses for 27 onshore blocks

    The Oil and Gas Authority has announced that 27 onshore areas of land or blocks, are to be offered to businesses as part of the 14th Onshore Oil and Gas Licensing Round. The announcement of the fresh licensing round was first made in 2014.

    Other blocks of land that were applied for are to undergo further assessments to establish the environmental impact of the applications, and when this has been completed licenses will then be offered to the companies. The announcement regarding the remaining companies that have been awarded licenses is due to be made later in 2015.

    Commenting on the new licences, Lord Bourne, the Energy Minister for the UK, stated:

    “Keeping the lights on and powering the economy is not negotiable, and these industries will play a key part in providing secure and reliable energy to UK homes and businesses for decades to come.

    “It’s important we press on and get shale moving, while maintaining strong environmental controls

    The Government said that close to one hundred companies had applied for the initial licenses for shale gas exploration, and chemical company INEOS has revealed that it is one of the successful applicants.

    With three licenses granted for shale gas exploration in the East Midlands, this opens up brand new opportunities for INEOS Shale, who pledged a £640 million investment into shale gas exploration last year.

    Gary Heywood, CEO for INEOS Shale said:

    "We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from our licenses.  This will depend on the pace of planning approval. If we can, it will provide a local source of competitive energy and raw materials to support manufacturing jobs in the UK.”

    Ministers say that the new rounds of blocks are essential to secure UK energy supplies into the future, and that they will also be a vital part of the continued UK economic recovery by creating new jobs.

    Controversy

    Shale gas has its opponents and there has been controversy caused by plans to allow shale gas exploration in the UK. However, others argue that it is important for finding fresh sources of energy and it is vital for job creation, and for ensuring energy production into the future. The Government predicts that investment in shale gas could be worth as much as £33 billion, and it could assist in the creation of more than 60,000 jobs.

  • Government draws up draft regulations for fracking

    The Government has drawn up a set of draft regulations that set out which areas will be protected from underground fracking.

    The regulations also detail the additional protections that will be given to Areas of Outstanding Natural Beauty, World Heritage Sites, and National Parks etc.; when fracking is permitted in these areas, restrictions will be put in place to protect them.

    Despite this, environmental groups have reacted angrily to the announcement that areas such as National Parks could be used for fracking. However, in a statement, Energy Minister Andrea Leadsom said:

    “The UK has one of the best track records in the world when it comes to protecting our environment while also developing our industries – and we’ve brought that experience to bear on the shale gas protections.

    “We need more secure, home grown energy supplies, and shale gas and oil have a vital role to play – much better that we use what we have at home than relying on supplies from volatile foreign imports.

    Ms. Leadsom added that the fracking industry would be “developed safely with world class environmental protections, creating jobs and delivering better energy security while safeguarding of some of our most precious landscapes.”

    Task Force on Shale Gas

    The draft regulations from the Government come at the same time as the latest report from the Task Force on Shale Gas, which examines the possible health implications and environmental concerns that could be caused by the shale industry in the United Kingdom.

    In its report, the Task Force detailed a number of recommendations to make the fracking industry safer. This includes companies providing full details of the chemicals that are used as part of fracking and regular monitoring from the Environment Agency to ensure that chemicals are kept at safe levels.

    The Task Force also suggested that a National Advisory Committee should be formed so that data could be collected and monitored, making it possible to analyse any possible impact that fracking could have on health and the environment.

    Commenting on the report, Lord Chris Smith, who chairs the Task Force on Shale Gas concluded by saying that:

    “Only if the drilling is done properly and to the highest standard, and with rigorous regulation and monitoring, can shale gas fracking be done safely for local communities and the environment.”

    Fracking has long been used in the U.K, but it gained more prominence when proposals were announced to use the method to extract shale gas; efforts are already being stepped up by several communities to prevent fracking in their local areas.

  • Government signs historic agreement with EDF

    The UK Government has signed an historic agreement with the French-owned energy firm EDF, which paves the way for a new generation of nuclear power. After an unexpected delay to further review the Hinkley Point C proposals the government finally gave the go ahead for the two new nuclear reactors in mid-September 2016.

    The Current secretary of State for Business, Energy and Industrial Strategy Greg Clark, Jean Bernard Levy, CEO of EDF and He Yu, chairman of the China General Nuclear Power Group (CGN) came together to sign the Contract for Difference and Secretary of State Investor agreement in late September.

    Commenting on the development, Greg Clark stated:

    “Signing the Contract for Difference for Hinkley Point C is a crucial moment in the UK’s first new nuclear power station for a generation and follows new measures put in place by Government to strengthen security and ownership.

    Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear power stations like Hinkley play an important part in ensuring our future low-carbon energy security.”

    Building and Funding of Hinkley Point C

    The £18 billion plant is being partly funded by the CGN group, who have invested £6 billion; the government has also pledged funding towards the new plant.

    Hinkley Point C will be the UK’s first nuclear power plant for twenty years and Vincent de Rivaz, CEO of EDF Energy in the UK, said it will “kick start Britain’s nuclear revival”.

    Once built, the Somerset-based plant will produce 7 per cent of the UK’s fuel needs, and the signing of the agreement will also allow the development of Sizewell C and Bradwell B.

    Hinkley Point C Plans

    Hinkley Point C is due to start producing electricity in 2025 and it will provide power for 6 million homes. 

    Decommissioning of the plant will begin in 2083 and will cost more than £7 billion; the operators of the Hinkley Point C have been made responsible for the decommissioning and site clearance costs under new measures brought in by the government.

    Importance of nuclear energy to UK

    Nuclear power is part of the government’s plans to provide energy security for the UK and to help fill the need for low carbon energy sources. There are eight potential sites that could be commissioned by 2025, and Horizon Ltd and NuGeneration are just two companies who plan to build nuclear reactors in the UK.

  • Grangemouth project to receive £4.2 million funding

    £4.2 million worth of government funding has been made available to carry out a feasibility study for the proposed Caledonian Clean Energy Project. The Department of Energy and Climate Change has given funding of £1.7 million, while the Scottish government has given £2.5 billion in funding.

    The money will enable the Summit Power Group, who are based in Seattle, to carry out an intensive research and a feasibility study for the full–chain 570 MW Carbon-Capture-Storage (CCS) coal-gasification power station, which is planned for Grangemouth.

    According to the Department of Energy and Climate Change, the feasibility study and research phase will help to plan the design, sighting, and financing of the power station as well as the building work that will be required.

    Commenting on the funding, Ed Davey, Secretary of State for Energy and Climate Change said:

    “Carbon Capture and Storage could be crucial in helping us meet our ambitious climate change goals. The UK is one of the world’s frontrunners in this sector and the UK Government is leading Europe with its support of the two competition projects at Peterhead in Scotland and White Rose in Yorkshire.

    “Developing CCS more widely is vital if it is to become cost-competitive technology, and I’m excited at the prospect of Grangemouth contributing to the UK’s low carbon future.

    Development Work

    The next phase of making the Grangemouth project a reality will involve carrying out the research and development work, which is scheduled to last for 18 months. The results of this aspect of the project are important; there are plans to share it across the industry to help boost the understanding of successfully developing and deploying carbon capture storage commercially.

    Unique project

    The project at Grangemouth is the first of its kind, and if it is successful, it will combine a state-of-the-art coal gasification and carbon capture technologies all into one individual unit.

    The carbon capture storage technology would make it possible to retain the majority of the CO2 emissions that escape; these would then be transported off the site via onshore pipelines, which would then be stored deep under the North Sea.

    Carbon Emissions Pledge

    The government has pledged to take action to reduce carbon emissions and it has come up with numerous initiatives to encourage companies to come up with solutions to emit CO2 emissions and to fund greener forms of technology. If the Grangemouth project is implemented successfully in the future it will offer another way to reduce carbon emissions. 

  • Growth remains steady, but manufacturing faces challenges

    New figures from the CBI show that there is encouraging news for the economy. Growth in the UK continues to remain steady, however, the CBI predict that it might level off slightly during the final quarter of the year.

    Despite the positive news of steady growth, the CBI did sound a note of caution and stated that: “Expectations for growth are not as strong as earlier in the year”.

    Commenting on the latest growth indicator figures, Rain Newton Smith, Director of Economics for the CBI, said:

    “This shows a continuing story of solid growth.

    “Previously pent-up demand delivered a strong boost to growth during the first half of the year but this effect may be fading. The UK is continuing to expand on a healthy trajectory, returning now to steadier and more sustainable growth rates.  

    “Domestic political uncertainty is an issue for businesses but the global backdrop is a greater concern. The Eurozone is weak, with a real risk of deflation, growth in emerging markets has slowed and geo-political tensions in the Middle East and Ukraine are the biggest threats to confidence.”

    Manufacturing Industry

    One of the strongest performers was the service sector, but news wasn’t all good for the manufacturing industry. Economic indicators from the CBI showed manufacturing growth was still weak, but it has performed better in the last quarter with 15 of 18 of the manufacturing sectors reporting an increase in output. However, the reduced demand for exports meant that the growth in the manufacturing sector was stalling when compared with figures from earlier this year.

    Mixed outlook for manufacturing

    421 manufacturers were surveyed by the CBI and most indicated they expect output volumes to remain low in the near future. The majority of sectors stated export orders remained low, with the mechanical engineering sector suffering the most.

    Manufacturers also expect their output prices to increase over the next quarter due to price inflation.

    In addition, there  were mixed views on the possibility of growth in the next three months; 28% manufacturers think orders will increase while 18% predict they will fall.

    Moreover, there was a mixed picture for output in the last quarter; 36% of those surveyed said that output had increased in the last quarter, and 22% stated it had fallen.

    The CBI stated that manufacturers were facing many challenges in the export markets such as slow growth in the Eurozone and greater competition from countries like China.

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