Chancellor of the Exchequer Philip Hammond is blocking a set of government proposals to overhaul the U.K. energy industry because of the potential spending implications for a new prime minister, people familiar with the matter said. The plans are included in a long-awaited energy white paper that the business department has been working on for months, according to the officials, who asked not to be identified because the policies haven’t been announced. Measures include the way nuclear power plants get funding, boosting technology to capture industrial greenhouse gas emissions for storage, accelerating the decarbonization of the power industry and efforts to make housing more energy efficient. Greg Clark hoped to publish the proposals in July, but Hammond is reluctant to give the go-ahead to new spending before a successor to Theresa May is in place, the people said. Whitehall officials across departments are also concerned the document is both incomplete and too sizable a policy plan to put forward just before a new premier takes over, according to two of the people familiar. One option being considered is to publish more urgent sections before recess leaving the rest for the next government to handle. If Johnson wins, as expected, neither Hammond nor Clark are likely to remain in their cabinet jobs. That’s because Johnson has said his cabinet members will have to be prepared for the U.K. leaving the European Union without a Brexit deal — something that Hammond and Clark have said they can’t support. The new prime minister will be announced on July 23.
Bloomberg 12th July 2019 read more »
Ministers are set to unveil a controversial new method for funding nuclear power stations and carbon-capture projects – one that heaps cost and risk onto consumers. The business department is expected to publish a consultation this week on regulated asset base (RAB) financing in the nuclear sector. It is a method used by water companies and Heathrow airport, allowing them to begin charging households years before a project has been built. French giant EDF wants to pioneer the financing model at its proposed Sizewell C power plant in Suffolk. EDF is building the £20bn Hinkley Point C station in Somerset, but argues that it cannot afford to build any future plants in the UK without a new financing approach. Ministers are wrestling with how to meet the UK’s power needs, with ageing coal and nuclear stations set to close. However, government plans to publish a full energy white paper this week seem to have been dashed by concerns over how to pay for the programme, and the change in Tory leader. The white paper is now expected in the autumn.
Times 14th July 2019 read more »
If all goes to plan Hinkley Point C should start powering 6m homes from 2025, earning its developers the hefty, taxpayer-backed price of £92.50 per megawatt-hour of electricity produced. Hinkley is a rare dash of activity in a sector battered by bad news and government inactivity. This week, business and energy secretary Greg Clark will try to sketch out a future for the new nuclear industry with a funding blueprint that will pass some of the risks and costs on to bill-payers. He has been spurred into action by Japan’s Hitachi and Toshiba, which have both pulled the plug on new nuclear projects in Britain. Clark’s paper was meant to appear alongside a broader revamp of energy policy, but sources suggest political turmoil and Treasury concerns are expected to delay the full white paper until autumn, when a new energy secretary is in post. In a sector being upended by technological change, from electric cars to smart power grids, every delay in devising a coherent, long-term policy further weakens the power system and Britain’s competitiveness. For now, the industry is likely to have to settle for Clark’s nuclear blueprint. Even if a full energy paper emerges, it could be torn up by his successor. Many tip the current chief secretary to the Treasury, Liz Truss. If they are right, Truss will arrive to a full in-tray.
Times 14th July 2019 read more »