7.25am BST Britain’s risk of winter blackouts drops to five year low From water to energy…. and Britain’s risk of winter blackouts has fallen to its lowest level in five years, according to the energy system operator - but it won’t necessarily be affordable. Forecasts by the National Energy System Operator (Neso) show that electricity supply margins - the amount of generation available above the expected levels of demand - could reach 10% this winter. This would be the healthiest margins since the winter of 2019/2020. However, the healthier supplies will come due to an increase in energy imports, meaning they could be more expensive if international markets demand higher prices. The NESO report expects margins to be healthier in part due to the start up of the Greenlink interconnector which runs from Pembrokeshire in Wales to County Wexford in Ireland and will import power when prices are higher in the UK than in Ireland. The UK’s energy system also has a greater availability of gas plants this winter, after some returned from outage last winter, but this comes as the UK’s gas supply margins shrink to their lowest in four years as the North Sea’s production continues to dwindle. The NESO warned that the UK will need to rely more heavily on imports of gas via liquified natural gas (LNG) tankers, which typically come from the US and Qatar. National Gas, which runs the UK’s gas transmission network, expects the UK’s overall gas demand to be slightly lower this winter but added that it can expect 6% less gas from the UK North Sea this winter compared with last year. Instead, it will increase LNG imports by 7%, it said. This raises the chances of higher gas costs if the market price continues to rise. In Europe, gas storage levels are slightly lower than in previous winters meaning more LNG imports could be needed in neighbouring markets too. Updated at 7.26am BST 7.24am BST Introduction: UK watchdog rejects 80% of water firms' price hike requests, but.... Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Millions of households in England are to be hit with even higher water bill increases than previously planned, under plans being unveiled by the competition regulator this morning. But the pain isn’t going to be as bad as the water companies had hoped. The Competitions and Markets Authority has decided to approve around a fifth of spending increases proposed by water companies, on top of existing plans signed off by water regulator Ofwat, which will be funded by increases in bills. And while it has “largely rejected” companies’ funding requests for new activities and projects, it is provisionally allowing 21% of the total £2.7 billion requested by Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water. This means they can seek an extra £556 million in revenue, which is expected to mean an average increase of 3% in bills for customers of the disputing companies. That is on top of the 24% increase in bills for customers of these companies under Ofwat’s original determination, which companies had complained was too stingy. The CMA says this extra money will fund more resilient supply, reduce pollution and also reflect increased financing costs. Kirstin Baker, who chaired the group which examined the issue, says: We’ve found that water companies’ requests for significant bill increases, on top of those allowed by Ofwat, are largely unjustified. We understand the real pressure on household budgets and have worked to keep increases to a minimum, while still ensuring there is funding to deliver essential improvements at reasonable cost. The agenda 7am BST: German trade balance 9.30am BST: Economic activity and social change in the UK, real-time indicators from the ONS 9.30am BST: Bank of England policymaker Catherine Mann gives keynote speech at Resolution Foundation event 11am BST: Financial Conduct Authority annual public meeting 1.30pm BST: Federal Reserve chair Jerome Powell speaks
Millions of water customers face higher hikes to bills; risk of winter blackouts falls – business live
CMA largely rejects water company requests for increased spending funded by bills, but customers at five water companies will still pay higher bills
