Miliband takes action on queue to connect new power generation to the grid

New rules to revamp the way power plants get connected to the UK’s power grid are proposed today by Energy and Climate Secretary Ed Miliband.

The shake-up will help new projects waiting to get a date to feed electricity into the grid to get out of the queue, and will in particular help renewable energy projects such as wind farms.

There is currently over 60 GW of new generation capacity – around 200 projects – that are waiting to be connected to the grid, including around 17 GW from renewable sources.

Ed Miliband announced as part of the Government’s Low Carbon Transition Plan in July that the Government would reform the previous system of projects getting a connection date on a first come, first served basis regardless of when the project would start generating energy. This meant some wind farms were given connection dates years after when they were due to start producing electricity. Today’s consultation offers industry a say on three options for how the new system will work.

The proposed scheme will also give investors confidence that projects will be given a connection date that fits in with their project development timeline.

Ed Miliband said:

“Access to the electricity grid has been one of the key barriers to the generation of renewable energy in this country. We are determined to resolve this issue. That is why we took powers to do so in the Energy Act and today we are setting out our proposals.

“We need these new projects to get hooked up to the grid as soon as they are ready – both to help tackle climate change and secure our future energy supplies.

“The government will do whatever is necessary to bring about the transition to a low carbon economy and to give investors the certainty they need so that new renewable energy generation is built.”

For the first time, the Government will be making the detailed reforms to grid access rules that are necessary to overcome the delays. Previously, reforms were proposed by industry and then approved or rejected by the regulator, Ofgem.

There are three proposed models that DECC is consulting on from today that build on industry and Ofgem’s work over the last year.
The three models look at different ways to manage the queue and to share the cost of connecting more plants to the system that is to be expected from this system.

The models are:

Connect and Manage (Socialised): - costs will be shared between all users of the network.

Connect and Manage (Hybrid): A model that targets some, but not all, of the additional constraint costs on new entrant power stations.

Connect and Manage (Shared Cost and Commitment): A model that offers the choice to new and existing power stations to commit to the network (which is helpful to Grid in terms of long term management of system) in return for greater certainty over charges, or to opt out and be exposed to additional constraint costs.

Ofgem has already approved interim arrangements to help new power stations connect more quickly, and under these interim arrangements around 1 GW of renewable projects in Scotland have already been offered earlier connection dates. However this was only ever intended as an interim measure and Government is intervening to ensure enduring access arrangements are put in place by June next year. This will be essential for investor confidence that we have a long-term and sustainable framework in place.

Foster: Bank watchdogs paid £25m in bonus bonanza

Mon, 01 Jun 2009

Government regulators paid out £25m in bonuses to staff last year despite serious problems in many of the areas they regulate. £5½m of the bonuses went to executives earning over £100,000, according to figures revealed to the Liberal Democrats.

Figures released under the Freedom of Information Act show that:

• The FSA paid £19.7m in bonuses to staff last year, with £4m of that going to executives earning over £100,000 - despite the bank crisis
• Ofcom paid its execs an average bonus of £16,667 - despite failing to prevent thousands of consumers losing money in the TV quiz phone-in scandal
• Ofgem paid its execs an average bonus of £15,250 each - despite large increases in gas and electricity prices
• The top bonus paid out at the FSA was £90,000 - the highest paid at Ofcom was £56,400
• The average bonus paid to regulator executives was £19,100 - the average for other staff was £4,107

Commenting Liberal Democrat Shadow Culture, Media and Sport Secretary, Don Foster said:

"We all accept the need to attract top-quality workers to the public sector but in some cases it appears these bonuses have been paid out despite serious failings."

"This government offered hard working teachers and nurses below inflation pay deals while doing nothing to curb regulator executives earning five figure bonuses."

"The size of some of these pay outs would be hard to justify at the best of times, but it looks especially bad in the current economic climate."

"Regulators must now follow the lead of those in the rest of the public sector who have promised to freeze executive pay."

Table 1: Breakdown of bonuses for the Financial Services Authority, Ofcom, Ofgem, The Pensions Regulator, Ofwat, the Office of Fair Trading, Postcomm, the Civil Aviation Authority, and the Office of Rail Regulation.

Regulator	Number of Staff	Amount paid in bonuses to staff in total	Average staff bonus	Number of Employees on salaries over £100,000	Proportion of total staff earning over £100,000	Amount paid in bonuses to staff on salaries over £100,000	Average bonus paid to saff on salaries over £100,000	Highest bonus paid
TPR	328	£321,531	£980	12	4%	£76,577	£6,381	£28,512
Ofcom	810	£1,974,280	£2,437	48	6%	£800,000	£16,667	£56,400
Ofgem	302	£404,199	£1,338	10	3%	£152,500	£15,250
Ofwat	193	£55,000	£285	4	2%	£30,000	£7,500	£20,000
OFT	700	£564,418	£806	11	2%	£77,107	£7,010	£16,414
Postcomm	>66	£175,167	£2,654	1	2%	£8,246	£8,246
CAA	962	£1,797,211	£1,868	24	2%	£430,170	£17,924
ORR	345	£449,787	£1,304	6	2%	£55,000	£9,167
FSA	2,489	£19,700,000	£7,915	174	7%	£3,912,380	£22,485	£90,000
Total	6195	£25,441,593	£4,107	290	5%	£5,541,980	£19,110

Source: All information was received from Freedom of Information responses.

(DECC) Ed Miliband response to Ofgem's direct debit report

In response to Ofgem's report on direct debits, published today Ed Miliband said:

"Hard pressed consumers deserve to be treated fairly, regardless of where they live or how they pay. Ofgem's proposed changes to the rules on direct debits and earlier this week on pre-payment meters are vital.

"Consumers also deserve the lowest prices possible. The suppliers have all announced price cuts, but there's scope for more later this year. We want to see the full benefits of wholesale price reductions passed onto consumers."

(DECC) Government is backing renewable energy - O'Brien

In a speech to the Renewable Energy Association in London this morning, Mike O'Brien said:

"No sector is immune from the economic downturn and that includes the energy sector. To meet our commitments on renewables, we have changed the planning laws and increased support for the sector. We also are working with National Grid and Ofgem to ensure sufficient access to the grid and we very much welcome the announcement last week about the timetable for an extra 450MW of grid connection.

"However, we are fully aware of the investment challenges facing some parts of the industry. As part of the work we are doing across government on the low carbon industrial strategy, we are looking at the impact of the downturn and what we can do to alleviate it. To that end, we are examining how we can help ensure there is sufficient finance and other support available for viable projects which are short of the investment they need.

"We are determined to meet the targets for 2020 that we have set out and having passed Denmark as the leading country for offshore wind, and trebled renewables in the last five years, we believe that with the right decisions, we can see the continued growth in the renewables sector that we need."

(DECC) Plan to plug offshore wind into the grid a step closer

Plans to connect vast amounts of future offshore wind energy to the national grid were firmed up today. The new innovative regime could help connect enough wind-generated electricity to power the equivalent of more than 10 million homes by 2020.

The Department of Energy and Climate Change (DECC) and Ofgem announced a final opportunity to comment on the new regulatory framework to connect offshore renewable projects to the onshore grid. The regime will ensure offshore cable connections are delivered on time and at reasonable cost to maintain an effective and secure grid. Tenders for the new regime are due to be launched in the summer.

The UK will need to generate as much as 30-40% of its electricity from renewable sources by 2020 as we move towards a low carbon energy supply. Offshore wind is expected to make a significant contribution, with 8GW already planned and potentially up to a further 25GW.

Energy and Climate Change Minister, Mike O'Brien said:

"This is a key building block in delivering the offshore grid we will need by 2020. The UK already leads the world in offshore wind and with Government assessing the potential for much more, we need a grid which can be built and run in the most cost effective way.

"Wind power could potentially make the single biggest contribution to our 2020 renewable energy target. It is vital we maximise the UK's natural resources to help in the fight against climate change and reduce our reliance on volatile foreign oil and gas markets."

Alistair Buchanan, Ofgem Chief Executive, said:

"The infrastructure needed to connect new offshore renewables has never before been constructed on this scale. Opening this up to competitive tender ensures it can be delivered more quickly and cost-effectively. This is a huge opportunity - for new entrants and companies already active in the GB market - to invest in these assets under a long-term and low-risk regulatory regime."

The Government's proposals will create new offshore transmission licences which will be granted through a competitive tender process managed by Ofgem. Successful bidders for the licences will become Offshore Transmission Owners (OFTOs).

Competitive tendering will:

* Lower the cost of building and operating the assets

* Enable new players to bring innovative technical, operational and financial solutions to the connection of offshore wind farms

* Lead to a more "light touch" regulatory approach since there will be no need for a regular review of the prices charged by the OFTOs.

(DECC) Miliband backs new protection for pre-payment and other energy consumers

Action to clamp down on unfair practices in the energy market was strongly backed today by Energy and Climate Change Secretary Ed Miliband.

The gas and electricity regulator Ofgem has this morning unveiled a package of new rules for energy suppliers that will give consumers more power and help to seal the flaws in the retail market identified in the last year's market probe.

Ed Miliband backed the clamp down:

"The overcharging of some of the most vulnerable customers exposed in the Ofgem probe was inexcusable.

"That is why it is right that Ofgem is acting to ensure that wherever you live and whatever payment method you use, you will not be unfairly discriminated against.

"We need tough regulation to protect consumers and that is why I welcome the Ofgem proposals. I believe this is the quickest way to end the unfairness that exists.

"However, if it turns out the regulator and the suppliers can't rid the market of unfair practices once and for all, I continue to stand ready to use legislation.

"The government and regulator must be eternally vigilant on behalf of the consumer."

Mr Miliband also welcomed Ofgem's new retail proposals:

"Ofgem's new proposals on doorstep selling and SME contracts are good news for householders and firms trying in difficult times to make the best sense of the choices available."