Dominic Webb

Looking for views from investors on Labour scrapping the ban on #onshorewind developments. Ten years ago, then PM David Cameron argued that people were "fed up" with onshore wind, the Conservatives removed subsidies and introducing tighter criteria to gain planning permission for onshore wind projects. These restrictions have now been scrapped with immediate effect. Does that mean onshore wind presents new opportunities? This chart by the UK's Department on Energy and Net Zero is very interesting. While solar and Offshore wind have massively scaled up their capacity...there is very limited generation. A look outside at the gloomy English summer gives me a strong hint why... In contrast, onshore wind seems to have performed much better when it comes to generating power. Food for thought? Please let me know what you think.

8

The Thames Water crisis isn't just a problem for London, or for British water utilities. It risks crushing Labour's ambitious (but necessary) plans to upgrade the UK's creaking infrastructure. Key points: -- An umbrella body for 110 investors and advisers from Blackstone Inc to Singapore’s sovereign wealth fund GIC, said UK regulation, once seen as the “gold standard,” was now “significantly less attractive than the US and EU.” -- Labour ministers met global pension funds and asset managers last week. Steve Reed, the environment secretary, used the occasion to try and build bridges with water industry investors -- The government can address any problems by “sending a message about political consistency and setting out a clear long-term vision on regulation,” said John Fingleton, former boss of the Office of Fair Trading -- BUT investor trust in Ofwat, the UK water regulator, is severely damaged. Relations have soured so much that one investor in the meeting with Reed last week said that if Ofwat can turn against the industry what's to stop the energy regulator Ofgem and others doing the same? (Ofwat dismisses some of the comments and actions from investors as posturing) -- Water companies are already having to pay higher rates of interest to borrow money, as evidenced on bond sales in recent weeks involving DWR Cymru Welsh Water, Anglian Water and Yorkshire Water Our long read, written by Phil Aldrick, Jess Shankleman and myself, and beautifully edited by Tom O'Sullivan #thameswater #labour https://lnkd.in/dj8FAniR

11

2 Comments

An interesting initiative in the response to climate change - Scotland's Improvement Service has unveiled a data platform for the country's local authorities to share information on their climate action plans. It could prove to be a useful tool in supporting decision making and sharing best practice, and would surely have a use for local authorities in other parts of the UK. https://lnkd.in/ez3dJW6p #localgovernment #scotland #climatechange #netzero

2

1 Comment

Companies focusing too heavily on climate transition may not recognise the synergies and trade-offs linked to adaptation, explains Kit England. This could store up trouble for the future. Think of an energy company looking to site a green hydrogen facility as part of its transition plan. The productivity of this asset relies on access to water, the essential ingredient for electrolysis. If the company does not factor in future climate-related water stresses at the chosen location, what should be a profitable green energy business may turn out to be a dud a few years down the line - imperilling the company’s decarbonisation. Louie Woodall writes about the need to remember climate adaptation in his latest piece, which is published both on Climate Proof and Real Economy Progress. https://lnkd.in/extb-P_P

39

2 Comments

Many thanks Begum Gursoy for your thoughts and insights on transition finance in the context of hard to abate industries.

6

1 Comment

ANALYSIS: The UK govt saved ~£500m in winter 2022/23 thanks to renewable energy projects back by contracts for difference (£18 per household x ~26m households) https://lnkd.in/eDtHdsHm

71

1 Comment

For as long as I have been covering #politics and #tax, policymakers have trumpeted the importance of long-term #saving and #investment. The #uk #budget makes those noises ring hollow, surely? Consider this excellent recent article from Stuart Trow, a columnist and financial coach: Economically, though, for many small investors, real estate might once again appear to be a relatively attractive savings vehicle for retirement. Although buying an investment property (or a second home) doesn’t attract initial tax relief in the manner of a pension, the ability to leverage a long-term investment with a mortgage more than compensates for that. A modest 10% rise in the value of a £1 million ($1.26 million) property with a 90% mortgage would double the owner’s equity from £100,000 to £200,000. The more interesting comparison, though, is what happens upon the owner’s death after April 2027 when Labour’s changes come into force. An inherited pension of £1 million would attract an immediate tax bill of £400,000 (IHT at 40%), leaving the heirs with £600,000. However, in order to draw upon their fortune, the recipients would be required to pay income tax on the £600,000 at their marginal rate. With tax thresholds frozen in 2021 and set to remain locked until at least 2028, that is a significant and escalating burden. A family inheriting the aforementioned investment property would also pay IHT of £400,000. However, they would then be free to sell that property and realize the full £600,000 immediately with no income or capital gains tax to pay. Stephen Harris Philip Harris Rachel Fokes Amanda Cheesley Theodora Viney Bruce Weatherill Charles Paikert James Horrax Tim Evans James Quarmby Jonny Black Alex Davies Rob Goodley David Barzilay Ingrid McCleave Anna Warren Blick Rothenberg Tim Searle TEP https://lnkd.in/epgXaUAA

10

2 Comments

ICIS VIDEO: The positions of #UK political parties’ #election pledges are split over the energy policy. Labour and the Greens favor renewables while Reform UK is going as far as scrapping #NetZero policies, fast tracking #NorthSea licenses and embracing fracking. #ICIS offers data, analysis and insight to evaluate the viability of some of the pledged targets #energypolicy #energycosts #natgas

7

Make Britain Green Again! With Labour widely expected to win the election tomorrow, investors are looking forward to policy certainty and welcome the engagement they have had with the party on environmental policy and sustainable finance. While ambition seems to be high, sources warn that difficult discussions will need to be had given the current economic climate. There is also no word on whether Labour plans to reintroduce a controversial bill which would have affected LGPS divestment decisions. https://lnkd.in/e58rbE_v

8

[Open access] The UK's Department for Energy Security and Net Zero (DESNZ) has launched consultations on a proposed "Clean Industry Bonus (CIB)" to upcoming Contract for Difference (CfD) schemes. The CIB process will be run as a competitive allocation for extra revenue support before the main CfD Allocation Round 7 (AR7) auction. Under this scheme, fixed and floating offshore wind developers could get extra support if they choose to invest in more sustainable supply chains. The CIB makes extra CfD funding available if a developer chooses to make investments above the minimum standard that meet the sustainability criteria. Read more for further criteria, list of eligible investments, etc: https://lnkd.in/eh4Xs7dv #offshorewind #energytransition

2

The UK's Department for Energy Security and Net Zero (DESNZ) is set to launch a cap and floor scheme for long-duration energy storage (LDES), following a which ran between January and March 2024. DESNZ has proposed two routes for applying to this scheme: Stream 1 – established technologies with a supply duration of at least six hours at a minimum capacity of 100MW Stream 2 – novel technologies with a supply duration of at least six hours, minimum capacity not yet decided DESNZ has not set an overall capacity target for this scheme, describing it as "not necessary at this stage", observing that it could lead to "setting incorrect and therefore misleading targets, particularly as our understanding of system flexibility needs continues to develop". Full breakdown of the consultation response here: https://lnkd.in/eVQ-emWQ

10

In this week's ECM Pulse we look at National Grid and its £7bn rights issue and the benefits of getting on the front foot. A rights issue can be a painful process but biting the bullet early saves a lot of pain down the line. The worst case scenario is putting it off until it's too late while the market, and short sellers, start to speculate over your capital position and likelihood of a cash call. NG might just be the model for other corporates. Read all in this week's ECM Pulse.

21

The Dutch, Scandinavian, Australian and Singapore governments have, over the years, built cross-industry #pension schemes that, among other benefits, enjoy certain economies of scale and hence lower average fees. So Rachel Reeves wants to do something similar with local authority defined benefit (not defined contribution, money-purchase) pensions. And the same applies to private sector DB schemes. Normally I don't write on pensions, but as we saw in the UK budget, they've become an issue for #HNW individuals given the #inheritance #tax treatment of them when a holder dies. This is also, I see, a way for the Chancellor to rebut claims that her budget did not contain much about boosting long-term investment in the UK economy. Pensions are, or should be, natural holders of stuff such as #infrastructure. Stephen Harris Philip Harris Rachel Fokes Amanda Cheesley Theodora Viney Bruce Weatherill Charles Paikert Tim Evans Eamonn Butler James Horrax John Ralfe Mercer Towers Watson & Co. NAPFA - National Association of Personal Financial Advisors PIMFA - Personal Investment Management & Financial Advice Association Federated Hermes Private Markets Aviva Investors Charles Jewkes, CFA https://lnkd.in/eAjVXXiD

7

Big read from Michael Holder on Energy Systems Catapult new report on how reaching net zero is challenging, but affordable and net beneficial to the economy. The scale of what is required remains epic, but the evidence it can be done and will unlock huge opportunities is becoming ever more compelling. https://lnkd.in/gkVfscQ2

11