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Utilitywise goes into administration

Energy broker Utilitywise has gone into administration, putting 1,000 jobs at risk.

The firm, which helps business clients to procure gas and electricity, said it had been unable to raise enough cash to cover its debts.

It also said a plan to sell the business had fallen through.

The collapse of Utilitywise (UTW) comes after a last-ditch rescue bid by the Newcastle-based company’s founder, Geoffrey Thompson.

Last month, it emerged it needed £10m to keep its business afloat, after coming up against “unexpected challenges and legacy issues”.

After failing to clinch the investment from shareholders, the company put itself up for sale at the end of January.

But in a statement on its website on Wednesday, it said the formal sale process for the group announced by the board “did not result in any offers”.

“Consequently, the directors of UTW sought the appointment of administrators.”

The firm has appointed FTI Consulting to handle the administration process and said its energy brokerage business would stop trading immediately.

However, its other subsidiary companies will continue trading while buyers for those parts of the group are sought.

Mr Thompson, who stepped down from the board two years ago, built UTW from a bedroom in South Shields into a multi-million-pound business listed on the AIM stock exchange.

According to a report in the Sunday Telegraph, the firm had recently warned staff it could not guarantee it could pay them in March.

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Scotland to fund UK’s biggest CCS study with six-figure investment

Scotland is to plough a six-figure investment into the UK’s biggest ever carbon capture and storage (CCS) research study.

The Scottish Government, the Scottish Funding Council (SFC) and Scottish Enterprise confirmed last night they will each commit £50,000 in an effort to reduce carbon emissions and halt climate change.

The £150,000 fund will go towards supporting a research partnership involving several Scottish universities, including Aberdeen and Robert Gordon University (RGU).

The cash injection aims to support the Scottish Carbon Capture and Storage (SCCS) knowledge exchange partnership, which brings together academia, industry and government.

Formed in 2005, SCCS assisted in bringing Scottish experts to the EU-funded Acorn Project.

Led by energy consultants Pale Blue Dot Energy, the Acorn project is working to develop the UK’s first operational carbon capture and storage (CCS) project at the St Fergus Gas Terminal in Aberdeenshire.

The Acorn project will now move towards full design studies.

The project received funding from the Scottish Government, UK Government, and the European Union.

Scottish energy minister Paul Wheelhouse said “The Scottish Government has been consistent in our strong commitment to the development and implementation of CCS technologies, as indicated by our providing funding to Pale Blue Dot Energy’s Acorn CCS Project at St Fergus, and to SCCS.

“Our waters in the North Sea also provides access to vast carbon storage resources in depleted oil and gas reservoirs and we believe that coupled with our existing oil and gas capabilities, ready supply chain, and strategically important industrial clusters, Scotland is potentially the best-placed country in Europe to realise CCS on a commercial scale.”

The Acorn project will see existing terminal infrastructure re-purposed to capture around 200,000 tonnes of CO2 per year initially, which will then be transported for storage in depleted North Sea gas fields, using re-conditioned existing pipelines.

Stuart Fancey, SFC director of research and innovation, said: “Scotland is home to the knowledge that the world needs to make carbon capture and storage an everyday reality, reducing carbon emissions and mitigating climate change.

“SCCS brings expertise from our universities and their partners to bear on the challenges of this new technology, a technology that can work with existing oil and gas infrastructure and offer new economic opportunities for Scotland.”

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Scottish Power to raise standard energy prices by 10 pct from April 1

LONDON, Feb 20 (Reuters) –

* Scottish Power, owned by Iberdrola said it will raise standard energy prices by 10 percent from April 1, in line with a price cap which regulator Ofgem raised by the same amount earlier this month

* The energy supplier is the fifth of the “Bix Six” UK energy suppliers to raise standard variable tariffs in the past couple of weeks

* SSE is the remaining supplier yet to announce a rise (Reporting by Nina Chestney; editing by Jason Neely)

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British Gas are the latest energy supplier to announce price rise

British Gas has become the fourth ‘big six’ energy supplier to announce a hike in its standard variable tariff.

The 10% price hike from April 1 will affect around four million British Gas customers who will see their bills rise to an average £1,254 to meet the regulator Ofgem’s latest price cap.

Prepayment meter customers will also face a £107 (9%) price rise.

In the last nine days EDF , E.ON and Npower have revealed its variable tariff would rise by 10%, adding hundreds of pounds to bills.

Ofgem announced on February 7 that it would increase the price cap for default and standard variable gas and electricity tariffs by £117 to £1,254 a year from April 1 due to hikes in wholesale costs.

The watchdog said previously that those affected would still pay a “fair price” for their energy as the increase reflects a genuine rise in underlying wholesale costs, rather than provider profiteering.

British Gas declined to comment specifically on its latest price rise but referred to a statement in January when it said it intended to adjust its standard variable tariff and default tariff pricing to broadly reflect Ofgem’s cap.

British Gas follows E.ON, EDF and npower, who all announced last week that they would be raising their prices to match the cap.

Richard Neudegg, head of regulation at uSwitch.com, said: “British Gas’ confirmation that it is hiking bills up to the maximum permitted by the price cap should surprise no one, but that doesn’t mean their customers should fall for the price cap trap.

“Eight million households already know they’ll be part of possibly the largest energy price rise ever to happen on a single day when the new cap kicks in on 1 April.

“With more suppliers expected to raise their prices to the new cap, over half the energy customers in Britain could affected.

“But they have a chance to escape being part of the grim statistics, instead they can save hundreds of pounds by switching away.”

“Nine in 10 energy deals available today are cheaper than the new cap will be. Now is the time for energy customers to grab one of those cheap deals and find themselves up to £324(5) a year better off.”

Stephen Murray, energy spokesman at MoneySuperMarket, said: “Ofgem opened the door to supplier price rises earlier this month and now the big six are kicking it down.

“For E.ON, EDF and npower last week, now read British Gas.

Alex Neill, managing director of home services at consumer group Which?, said: “The energy price cap will be cold comfort for the millions of British Gas customers who will now face eye-watering price hikes in April.

“This is the fourth price increase announcement in quick succession with the rest of the big six expected to follow suit.

“While there are fewer cheap deals on the market than a year ago, energy customers can still save almost £300 a year by switching to secure a better deal before the April hike.”

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E.ON UK to raise energy prices by 10 percent from April

LONDON (Reuters) – E.ON UK (EONGn.DE) will raise its standard variable energy prices by just over 10 percent from April, becoming the first of Britain’s “big six” energy firms to announce a rise in line with regulator Ofgem’s new price cap.

Last week, Ofgem said the cap on duel-fuel bills – both gas and electricity – would rise by 117 pounds a year, or 10.3 percent, to 1,254 pounds a year from April 1 for average energy use.

“In line with that, we’ll be making changes to our standard variable tariff prices from 1st April and expect to see similar movements across the energy industry,” an E.ON UK spokeswoman said via email.

Ofgem was told by parliament last year to set a limit after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”.

The regulator last week said the cap would rise from April to reflect higher costs for energy suppliers such as wholesale prices, which it said were 17 percent higher than during the last cap period.

Several of Britain’s biggest suppliers, a group known as the big six, which control around 70 percent of the market, complained the cap was initially set too low and most are expected to up their prices to match the cap level.

Innogy’s (IGY.DE) npower said the cap was partly why it announced plans last month to shed 900 jobs.

Britain’s other big six energy suppliers are Centrica’s (CNA.L) British Gas, SSE (SSE.L), Iberdrola’s (IBE.MC) Scottish Power and EDF Energy. (EDF.PA)

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Bristol Energy first UK supplier to trial ‘heat as a service’

Bristol Energy have been working with Energy Systems Catapult to become the first energy supplier in the UK to trial selling ‘heat as a service’, rather than kilowatt hours (kWh).

Bristol Energy first UK supplier to trial ‘heat as a service’

Bristol Energy have been working with Energy Systems Catapult to become the first energy supplier in the UK to trial selling ‘heat as a service’, rather than kilowatt hours (kWh).

Currently energy suppliers in the UK can only sell energy to customers in strict units known as kilowatt hours (kWh). But a government-backed trial is offering households the chance to buy a Heat Plan tailored to their individual home and lifestyle.

Capitalising on digitalisation and emerging smart home technology, heat as a service provides consumers with improved control over their heating, making it easier for them to identify where they are wasting heat.

Crucially, it also gives consumers the ability to determine and pay for different levels of warmth and comfort depending on their lifestyle, through smart technology.

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Energy Systems Catapault (ESC) have been running detailed trials over the past two years with residents in a ‘Living Lab’ of 100 homes spread across the UK. Each property has been upgraded to smart home levels that are predicted to be common by the middle of the 2020s, with sensors providing room-by-room temperature control linked to a digital platform.

In a first of its kind trial, running this winter and over the next 12 months, households in Catapult’s Living Lab will be offered the chance to switch to a newly-designed Heat Plan by Bristol Energy.

Everything we do at Bristol Energy is founded in social purpose. The heat plan trial in collaboration with Energy Systems Catapult is an important step in our journey to creating energy products which are fairly priced for everyone, support sustainable energy supply and the decarbonisation of our homes and businesses. By testing heat as a service, we can truly understand what our customers need, rather than just giving them what we think they want.

-Samantha Nicol, Head of Innovation and Marketing at Bristol Energy

Bristol Energy will be continuing to trial and evolve the product before bringing it to market later in 2019. This is an exciting product development that is the first step in revolutionising heating our homes.

Read about smart metering technology

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Experts weigh in on the future of European utility business models

The utility industry worldwide is undergoing major transformation, spurred by decarbonisation, decentralisation and digitisation.

With these drivers also comes increasing pressure to find new sources of profitability and efficiency, and an emerging business model, known as ‘energy-as-a-service’, looks to be a significant solition.

This broad term describes a growing market of selling not only energy, but also technology, analytics, access to the grid, and personalised services.

“We are seeing more effort now to develop a new retail model than at any time over the last 100 years,” says James Sprinz, head of decentralised energy at Bloomberg NEF.

This market trend is in part driven by technology under the scrutiny of technologically-savvy consumers – looking to reduce costs and demonstrate their individual commitment to climate change. The second factor propelling change is utility-driven as major European energy suppliers look to recover market share lost to renewables.

“Energy providers are looking at other things they can sell besides electricity, which has seen a large increase in capital in the market, as well as more mergers and acquisitions,” he added.

UK majors move into energy-as-a-service by acquiring new companies

Most of the UK’s Big Six energy suppliers have increased their range of services through acwuisition – Centrica for instance bought AlertMe, who provide energy and home-monitoring hardware and services, as well as Panoramic Power, which helps companies improve operational efficiencies.

In 2017 a Bloomberg NEF report tracked 30 selected companies’ activity in decentralised energy products and services, and noted an upturn in investments and partnerships in technologies like battery storage and virtual power plants, as well as existing capabilities including micro-grids and energy management.

Competition

These companies are facing outside companies, such as Amazon’s Alexa, Google, with its Nest offering, as well as startups, such as ONZO and WATTY.

“There are many companies looking to move into this sub-sector because digitalisation allows them to aggregate and control assets, resources and demand in a way that previously wasn’t possible,” said Professor David Healey, director of smart energy at WSP.

Though still nascent, this market is poised to grow as electric vehicles and smart cities are adopted, and according to Navigant Research, the energy-as-a-service market for commercial and industrial customers is expected to reach $221 billion annually by 2026.

What about the existing hierarchy?

“No one can be sure where it will go, but certainly the business models of the large utilities will have to change dramatically over the next five to ten years to keep up with the changes,” says Professor Healey.

As the market moves to distributed, greener power, he adds, the sector will see new suppliers entering the market to offer more localised services at a lower cost, based on local generation supply.

This, according to Charmaine Coutinho, a principal analyst for Delta-ee’s New Energy Business Model Service, could see big tech players capitalise on their brand affiliation with new energy-as-a-service options.

“In their favour, they have a great understanding of data and data analytics, which is a key part of energy-as-a-service,” she says.

Trojan horses lead the way

Technologies such as Google’s Nest are a ‘trojan horse’ for the industry, says Duncan Barnes, partner at Deloitte, and Energy and Resources sector lead for Deloitte Digital in the UK.

“Once a consumer has this technology in their house their agency is with Google not the Big Six,” he says. “Currently, these devices are controlled by customers, but in the future, they could be run by algorithms, so those businesses that can manage data and provide insights will be the ones that succeed.”

Francesco Venturini, head of Enel X, says that the boundaries between energy and other sectors will continue blurring convention through new business models.

“If I think about electric mobility, utilities are competing with car manufactures; in energy managements systems, utilities compete with digital platform providers; in the field of the smart home, utilities are competing with the tech giants; and so on,” he says.

“Therefore, traditional utilities, which are not ready to tackle this new ecosystem, are definitely disadvantaged in comparison with those players that decide to deal with these new business models proactively.”

“We are at a stage where several companies are the market leaders and are making the necessary investments, while others are unconvinced by the demand. Over the next few years, we will see which companies are successful,” Mr Sprinz at Bloomberg NEF concludes.

What about energy prices?

More services and competition in the utility market can be generally considered to be a positive development, but it’s effect on cost to the consumer is unclear.

Venturini insists this will allow consumers access to better pricing through for example, demand-side-response services, where customers will be able to shape their consumption to off-peak, cheaper supply times and pay lower prices.

He added: “Through these new business models, more and more companies will join the game, blurring the line between sectors and increasing competition, with potential pricing benefits.”

But there’s always a risk, cautions James Sprinz at Bloomberg New Energy Finance, that some new services may be considered more valuable than others, and if services are oversold, costs won’t be reduced and “consumers will just end up spending money on different things”.

Energy prices to increase for millions as Ofgem raises cap

More than half of British households are set to see an increase in the cost of energy in April after the regulator, Ofgem, raised price caps.

Ofgem sets maximum prices that can be charged for gas and electricity to those who have not switched suppliers and are on default tariffs.

The new cap could see these households typically pay an extra £117 a year.

The regulator is allowing suppliers to cover the higher costs they face on the wholesale market.

“We can assure these customers that they remain protected from being overcharged for their energy and that these increases are only due to actual rises in energy costs, rather than excess charges from supplier profiteering,” said Dermot Nolan, chief executive of Ofgem.

About 11 million households are on default, or standard variable tariffs, and are set to be affected. Such a household, which uses a typical amount of energy and pays the bill by direct debit, should now expect to pay £1,254 a year.

Consumer groups say they can shop around for a better deal.

Another four million people are on prepayment meters, so pay for their energy in advance. The price cap will rise on their tariffs too, with the typical customer paying £1,242 per year, up by £106 from the previous cap level.

One customer set to see a price rise is Jackie Foran, of Northenden, south Manchester. The 65-year-old ended up on a default tariff after her original supplier went bust, and pays about £100 a month despite living alone.

“I think quite a lot of elderly people will be caught by surprise, because when somebody says [the price] is capped, you think you don’t have to do anything, you don’t have to worry, it will all be perfectly fine,” she said.

“But you could still be on an expensive rate, even though it is capped. It could make a big difference to the bills.

“In my mind, they are not really capping it are they?”

She intends to shop around for a better deal before April.

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How do these caps work?

Energy price capping is a flagship government policy designed to protect the vulnerable and those who have stayed loyal to their energy supplier.

Ofgem sets the cap for households in England, Wales and Scotland. Northern Ireland has a separate energy regulator and its own price cap.

Ofgem sets a cap on the unit price of energy for electricity and gas, and a maximum standing charge.

Energy companies are not allowed to charge default tariffs that are higher than these thresholds.

 

The first cap came into force at the start of January. Ofgem said this price limit meant households typically saved £76 a year on what they would have been charged without the cap.

Ofgem has now reviewed the cap and will allow suppliers to charge more from April.

The cap for those on prepayment meters came into force earlier but has also been reviewed and revised up.

Why are prices rising?

Prices are rising because Ofgem is allowing suppliers to charge more to cover the higher wholesale costs they face owing to the higher global price of oil. Wholesale costs account for more than a third of a typical energy bill.

The regulator considered the costs faced by suppliers in the six months to the end of January when setting the new cap for April.

About £74 of the £117 increase in the default tariff cap is due to higher wholesale energy costs, it said, with costs of transporting energy and environmental costs also rising for suppliers.

Alex Neill, from consumer group Which?, said: “This eye-watering increase to the price cap will be a shock to the system for people who thought that it would protect them from rising bills.”

“Energy suppliers have traditionally been the ones blasted for blaming price rises on wholesale costs,” said Richard Neudegg, from price comparison site Uswitch. “Now, shamefully, Ofgem is doing the same thing, as the reality of energy prices catches up with the political hype.”

But Lawrence Slade, chief executive of Energy UK, which represents suppliers, said that energy companies were facing “drastically rising costs” which were outside their direct control so it was correct for Ofgem to reflect that when setting the cap.

Will my bill increase automatically?

The cap is per unit of energy, not on the total bill.

So people who use more energy will still pay more than those who use less.

The new cap takes effect in April, after the worst of the winter has gone, so the impact of higher prices might not be as great as it could have been.

Ofgem points out that, without the existence of the cap, households would have been paying more.

Its analysis suggests that default tariff customers could be paying around £75 to £100 a year more on average for their energy had the default tariff cap not been introduced, despite the increase just announced.

People can also shop around for a cheaper fixed deal. This would make the cap irrelevant for them.

Ofgem and consumer groups say switching could save a typical household £200 a year, although this differential has narrowed from about £300, partly as a result of price bunching after the cap was introduced.

The level of the cap is updated every six months, at the start of April and the start of October, this year and next year, and possibly beyond.

Forecasts are already suggested that the cap could be lowered next time, saving households money from October.

Energy Minister Claire Perry said: “We were clear when we introduced the cap that prices can go up but also down.” She added that energy suppliers were “no longer able to rip off customers on poor value tariffs”.

But Labour’s shadow business secretary, Rebecca Long Bailey, said: “This government is resting on its laurels while big energy companies are ripping off their customers.”

E.ON UK to raise energy prices by 10 percent from April

LONDON (Reuters) – E.ON UK (EONGn.DE) will raise its standard variable energy prices by just over 10 percent from April, becoming the first of Britain’s “big six” energy firms to announce a rise in line with regulator Ofgem’s new price cap.

Last week, Ofgem said the cap on duel-fuel bills – both gas and electricity – would rise by 117 pounds a year, or 10.3 percent, to 1,254 pounds a year from April 1 for average energy use.

“In line with that, we’ll be making changes to our standard variable tariff prices from 1st April and expect to see similar movements across the energy industry,” an E.ON UK spokeswoman said via email.

Ofgem was told by parliament last year to set a limit after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”.

The regulator last week said the cap would rise from April to reflect higher costs for energy suppliers such as wholesale prices, which it said were 17 percent higher than during the last cap period.

Several of Britain’s biggest suppliers, a group known as the big six, which control around 70 percent of the market, complained the cap was initially set too low and most are expected to up their prices to match the cap level.

Innogy’s (IGY.DE) npower said the cap was partly why it announced plans last month to shed 900 jobs.

Britain’s other big six energy suppliers are Centrica’s (CNA.L) British Gas, SSE (SSE.L), Iberdrola’s (IBE.MC) Scottish Power and EDF Energy. (EDF.PA)

 

UK carbon emissions down 38% since 1990

Carbon emissions in the UK are 38% lower than they were in 1990.

That’s a fall from around 600 million tonnes of CO2 (MtCO2) in 1990 to around 367MtCO2 two years ago, according to new analysis by Carbon Brief.

The decline is largely due to a cleaner electricity mix based on gas and renewables instead of coal as well as falling energy demand across homes, businesses and industry.

The transition to renewable energy, i.e. wind, solar and bioenergy, is the largest driver – collectively responsible for 37% of electricity sector emissions reductions in 2017.

Wind accounted for the largest share at 20%, followed by bioenergy at 12% and solar at 5%.

The report adds reduced fuel consumption by business and industry accounted for 31% of emissions reductions while a reduction in electricity use, mostly in the industrial and residential sectors, was responsible for 18% of the fall.

Changes in transport emissions from fewer miles driven per capita and the use of more efficient vehicles also resulted in around 7% of reduction in emissions.

Emissions in the domestic sector were largely offset by increased CO2 in imported goods until the mid-2000s, however, reductions since 2007 have not been offset by that.

Carbon Brief finds CO2 emissions form the electricity sector could have been expected to continue increasing in line with past trends without the effects of gas, renewables and reduced power use – by 2017, the figure would have been almost four times higher than they are today.

Its analysis adds: “Domestic emissions in the UK have declined in the past 30 years faster than nearly any other country on Earth. Nevertheless, additional rapid reductions will be needed to meet the UK’s legally-binding climate goals – and even faster cuts will be required once the country aims for net-zero emissions in line with the Paris Agreement.

“While it is useful to understand the factors behind CO2 reductions to date, additional government policy will need to play a role in driving the deep reductions required to help avoid potentially dangerous warming. The UK’s emission reductions to date have been concentrated in electricity and industrial sectors, while future deep decarbonisation will require large reductions in emissions in more difficult areas, such as transport and farming.”