Russia Opposes EU Caspian Sea Gas Pipeline
The European Union (EU) is seeking alternative suppliers of natural gas from the East and is moving forward with talks on constructing a pipeline connecting Azerbaijan and Turkmenistan to the EU via the Caspian Sea. However, Russia—who supplies roughly one-fourth of Western Europe’s natural gas—is staunchly opposed to the new pipeline.
The EU is seeking new suppliers to ensure consistent delivery of natural gas to the continent. Approximately 80 percent of the gas bound for Western Europe passes through the Ukraine, and conflicts between the former Soviet nation and Russia have resulted in numerous occasions where gas supplies were cut off. EU officials hope that the new Caspian Sea pipeline will offer greater energy security in the future.
A mandate approved Monday will see the EU proposing a union-wide treaty in support of the completion of the trans-Caspian pipeline. The pipeline itself would attach to the EU-supported Nabucco pipeline that bypasses Russia.
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"Europe is now speaking with one voice. The trans-Caspian pipeline is a major project in the Southern Corridor to bring new sources of gas to Europe. We have the intention of achieving this as soon as possible," EU Energy Commissioner Oettinger said in a statement.
The Nabucco pipeline project has been on hold for fears that not enough suppliers could be found to fill the pipeline. However, by connecting the trans-Caspian pipeline, those supply concerns would be quelled. Turkmenistan has already agreed to supply the EU with 10 billion meters of gas per year.
Russian officials have expressed their contention to the proposed pipeline. Foreign Ministry spokesman Alexander Lukashevich claims that only the five countries bordering the Caspian have the right to settle issues regarding the use of the inland body of water. No doubt, the EU will have to deal with Kazakhstan, Iran, and ultimately Russia—who all border the Caspian as well—if it hopes to successfully construct a pipeline in the shared waters.
Other challenges facing the proposed pipeline include high seismic activity in the region and a tectonic seabed. Nonetheless, the pipeline could serve the greater purpose of uniting Azerbaijan and Turkmenistan, who have been in contention over a disputed portion of the Caspian Sea. With Russia in the process of constructing its South Stream pipeline to carry gas from a southwestern Russian port to southern Europe via the Black Sea, competition is already heating up. At any rate it seems like the EU will come out the victor, with multiple gas pipelines being built to connect the gas rich East to the power hungry West.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.