As is our want, we had a little fun this morning in the Daily Bulletin. It’s our convention to run a handful of spoof stories, clearly separated as “in other developments on this day”. Judging by some of the e-mails we have had in since, a couple of them are fairly close to the mark. So for the avoidance of doubt, there has been no successful challenge of the CfD regime (and we are not aware of a company called TempsRUs), Ofgem has not added a weather element to the default price cap, and we have the utmost respect for Smart Energy GB who soldier on despite a difficult job and problems outside their control with the roll-out. And, of course, no one has switched the French interconnector off. The “news” is here:
Contracts for Difference scheme halted after EU court ruling
Contracts for Difference (CfD) auctions and payments are to be suspended on state aid grounds following a ruling by the General Court of the European Court of Justice this morning (1 April). The ruling pertains to a case brought by TempsRUs Energy in 1994 over how the Non-Fossil Fuel Obligation, a direct precursor to the CfD scheme, was not technology neutral, and in effect discriminated against demand-side response (DSR).
TempsRUs Energy CEO Barbara Sell said “our challenge has nothing to do with the merits of our argument, but we realized that BEIS’s predecessor, the Department of Energy, had failed to include an impact assessment with its application, so we win”. She added: “There is no reason why DSR can’t meet 100% of electricity demand by 2030 if we all take a bit more care about our energy use and prevent any new generation being built”.
A BEIS spokesperson said the government would be challenging the ruling vigorously but would press on with its third CfD auction.
Ofgem caps summer temperatures at 20C
In line with its published methodologies, Ofgem has adjusted the seasonal temperature cap for this summer to 20 degrees C from today (1 April). This marks a 200% increase in the capped temperature from the winter 2018-19 rate of 5C, which has applied since 1 January. Ofgem attributed the increase to longer daylight hours, more sunshine and increasing weather pressure from continental Europe.
Spokesperson Donal Merton commented: “Under the caps, hard-pressed households and hard-working businesses on default tariffs are protected and will always enjoy a fair rate, even though the levels will increase from 1 April because of circumstances outside of our control.” He added: “If the temperature exceeds the level assumed in setting the cap that’s tough bananas for suppliers as they should have seen it coming. We can assure consumers that they remain protected from being overheated for their temperatures and that these increases are only due to actual changes in weather conditions.”
A BEIS spokesperson commented that it strongly supported the Ofgem move, but it thought the increase might actually be 400%. “It’s for Ofgem to satisfy itself that the numbers are properly calculated as we haven’t actually read the methodology, but the cap will provide relief for hard-working families and hard-pressed businesses.”
Smart meter programme makes significant donation to Comic Relief
Senior industry figures have provided an eye-watering £10mn donation to Comic Relief out of monies collected from the smart meter programme.
Project lead Gaz Leccy said: “We are spending as fast as we can, and that’s before the huge wad we give to Smart Energy GB every year to fund children’s adverts.” He added the programme, which is costing way more than anyone ever suspected and is running embarrassingly late, will fund the donation through savings to its advertising spend, and Smart Energy GB had already pulled a new multi-media campaign featuring the Muppets.
Leccy added the programme would start delivering real benefits and would be transformational “probably some-time next decade”. He said he was confident Smart Energy GB would come back to the Muppets in time, and it was actively considering publishing a range of glossy educational leaflets featuring the Smurfs.
Hard Brexit looms as French interconnector taken offline
The prospects of a hard Brexit increased this morning (1 April) after high-profile Brexiteer Joris Bohnson cut through the DC link on the seaward side of Sellindge with a pair of hedge trimmers.
An unrepentant Bohnson said: “You have to stand up to these Frenchies, or they will simply think we are just a nation of hard-pressed shopkeepers. History tells us that time and time again with Crecy (1346), Agincourt (1415), Blenheim (1704), Trafalgar (1805) and Waterloo (1815) we need to teach them a lesson.”
National Grid spokesman Bert Duncan said that he doubted that the lights would go out but said it would make it, in its role as the EMR delivery body, “think a bit harder” about where all this unproven demand-side response (DSR) was supposed to be. He added the main problem was the loss of revenue to National Grid, but he thought this would be dealt with through an application for “a rather large” income adjusting event.