Gas prices at the UK NBP for both prompt and curve were softer Tuesday, as more supplies relieved the within-day market and boosted confidence that gas would meet demand in October. The curve also came down in price, which was a reflection of the weak crude market, traders said. Within-day was at 69.25 p/th at midday, which is about 4 p/th lower than the day-ahead close on Monday. Traders said more gas was coming to the UK from Norway, which was part of a 10 million cubic meters supply boost earlier in the morning. This led to confidence that October would be well-supplied relative to demand, and October was assessed at 69.80 p/th at midday, which is 2.4 p/th lower than Monday’s close. The Q1 09 contract was down 3 p/th on the day to 95.75 p/th, a mixture of weaker oil sentiment and confidence that gas will arrive, and next summer was
also off 3 p/th, at 73.75 p/th. Next winter was down 2 p/th. Although crude was rising Tuesday, it had not recovered Monday’s losses.

Energylinx are delighted to receive confirmation from energywatch that we have been accredited for the third time. Energylinx was one of the founder members of energywatch and has held accreditation to the Code since 2003. With the responsibilities of energywatch about to transfer to Consumer Focus in a few days time Energylinx looks forward to the continuation of the Code itself. The full press release from energywatch can be viewed below. Consumers can trust accredited energy price comparison sites. With millions of consumers seeking expert help on switching supplier in a bid to cut their energy bills energywatch is pleased to announce that all the online comparison services accredited by the energywatch Confidence Code have passed a stringent audit of their services. The providers are subject to regular scrutiny to ensure the information they provide to consumers is accurate and comprehensive, and once a year they are independently audited to make sure they are continuing to meet the high standards set by the Confidence Code. Tim Whittle, energywatch Code Manager, said: energywatch has made the Confidence Code even more robust this year and the price comparison Service Providers have shown how much they value the accreditation by raising their game to meet the challenges we set them. Consumers using an accredited site can be 100% confident that they are seeing all tariffs and that the results are completely unbiased. All of the providers who reapplied for Confidence Code accreditation have been successful. I am also hopeful that there will soon be some new names among the list of accredited providers: several have applied and will soon be going through the compliance audit process. In a world where consumers are bombarded with online advice and comparison type information the energywatch Confidence Code is unique. No other industry has its internet comparison providers so tightly scrutinised by a consumer watchdog operated accreditation scheme that is so robust. The scheme will continue under the new consumer Advocacy body, Consumer Focus, which is due to launch on 1st October.

energywatch believes that other industries and markets would do well to develop accreditation schemes that force providers to live up to high standards. Tim Whittle continued: Consumers can go online to compare financial services providers, car, home and travel insurance deals, and everything from loan deals to life assurance but only in energy can consumers take comfort from the protection offered by an impartial and independently audited accreditation scheme. To protect consumers, regulatory bodies and watchdogs should examine the Confidence Code model and see how it could be applied to their sectors. ends

Price Comparison Service Providers comment:

Gareth Kloet of Confused.com, said We are delighted to have once again successfully passed the energywatch Confidence Code accreditation and consider this endorsement as being synonymous with the way in which we operate. Providing customers with easy to understand, transparent information that allows them to make an informed decision is central to our philosophy. energywatch has done a fantastic job since its establishment in 2000 and has been an extremely effective catalyst for change in policy within the industry which in turn has led to beneficial changes for customers. There are still significant challenges ahead in what is still a very confusing industry for the majority and we look forward to working with and supporting Consumer focus in the achievement of its aims.

Mark Todd Co-Founder & Marketing Director, Fundraising Innovations Ltd, said energyhelpline is delighted to have once again been accredited by energywatch as an accurate and impartial service for customers. We have been working with energywatch for the last 7 years and believe that their work has helped millions of consumers in the UK. energywatch has led from the front in the fight for consumer justice, providing practical help for consumers, and even taking on OFGEM and the Government. It would appear to us that they have been punished for being too vocal, too much on the customers side! Hence the decision to effectively close them down. It is sad to see the end of energywatch as an entity for consumers and hope that Consumer Focus will provide real practical help to consumers as well as making good policy decisions. energyhelpline shall work with them with this aim – to benefit the pockets of the individual consumer in this turbulent financial time.

Ken Geddes of Energylinx, said As founder members and strong advocates of the Confidence Code as a visible signal to consumers that they are using a transparent and professional service are pleased not only with the continued inclusion of Energylinx on the list of Service Providers, but on the fact that all those who were subject to full audit and reassessment were successful, which should be seen as a mark of the integrity of those working in the sector. Energylinx looks forward to the launch of Consumer Focus and hopes that this will bring additional transparency to the UK energy markets.

Mark Read Managing Director of Home Advisory Service, said We are proud to have been, once again accredited by energywatch., said We look forward to working with Consumer Focus and hope that the benefits of using fully accredited comparison sites will be championed to the full.

Scott Byrom Utilities Manager at Moneysupermarket.com, said As the UK’s leading price comparison site, moneysupermarket.com is delighted to maintain its 100 per cent commitment to the energywatch Confidence Code. The Code plays an integral part in reassuring consumers they will find the best possible price for their energy through an accredited comparison sites. The development of the Code, and the manner in which it operates, provides consumers with much needed transparency in what can be a complex market. By doing so, the Code will continue to install trust in accredited sites and ultimately protect the consumer. Moneysupermarket.com looks forward to working with Energywatch, and the new Customer Focus, to ensure the Code reflects the energy market in the best possible way.

Richard George Managing Director of SaveOnYourBills, said SaveOnYourBills.co.uk are delighted to have passed the energywatch Audit having worked with the UK energy regulators for almost 10 years in the UK energy switching market. Whilst sad to see the good Energywatch brand be lost after all the hard work they have done, SaveOnYourBills.co.uk welcomes the New Consumer Focus and hope they can take on the challenge of helping the UK consumer in the UK energy markets.

Sean Gardner, director at MoneyExpert.com, said: We are pleased that Simply Switch has won accreditation to the Confidence Code.

Alison Morrison Head of Non-Subscription Marketing at Which? Said We are delighted that Switch with Which? has been accredited by energywatch for the third year in a row. It is essential that consumers can identify energy switching sites that adhere to the high standards set by this code of confidence.

Joe Malinowski, founder of TheEnergyShop.com, said: Everyone at TheEnergyShop.com is very pleased to have been accredited with the new energywatch confidence code. Our company has worked hard to offer consumers a service which is easy-to-use and shows the very best deal. It is now more important than ever that people have confidence in their price comparison service; not just ones that are energywatch accredited but are also financially robust. Faced with record energy bills TheEnergyShop.com is on hand to help consumers not only get a better deal, but in the safe knowledge that we will be around to follow through.

Richard Eden of Ukpower.co.uk, said We would like to acknowledge the excellent work carried out by energywatch in pursuit of reliable and impartial comparison services for domestic energy customers. Ukpower.co.uk was one of the first energy comparison services to be approved by Ofgem and energywatch and has consistently followed guidelines to ensure first class services for our customers. Now, Ukpower.co.uk looks forward to continuing this good work with Consumer Focus with the same objectives to assist customers find the best deals available for their gas end electricity requirements.

Florian Ritzmann of Xelector.com, said Unravelit.com are pleased to see the Confidence Code continue under the leadership of Consumer Focus. There are dark days ahead, and a strong Code to protect consumers can only help.

Nick White, Director of Products at uSwitch.com, said This sends out a very clear message that the information and service we provide is accurate, comprehensive and completely unbiased. In a time of rising prices and financial uncertainty, consumers who want to cut the cost of household bills can use our service with absolute confidence that they are doing the right thing.
Notes to Editors

The operation of the Confidence Code will pass to Consumer Focus after energywatch is abolished on 30 September 2008. energywatch was established under the Utilities Act 2000 and will be abolished under the Consumers, Estate Agents and Redress Act 2007.

About the energywatch Confidence Code: It is a voluntary Code of Practice and not a mandatory one enforced by the regulators. Service Providers have to agree to an annual compliance audit carried out by an independent auditor and pay the costs associated with it. Accreditation is not just a Kitemark or stamp of approval, it’s a requirement that Service Providers comply with the Code at all times and they are tested regularly for continual compliance. The Code and Code Guidance can quickly be updated to reflect changes in the energy market. Energy suppliers insist that new price comparison Service Providers are accredited to the Code, before they will agree to enter into commercial relationships with them. The sites currently accredited to the Code represent all the major players in the energy price comparison market. They account for more than 90% of all online switches performed in the energy market. The Confidence Code protects Consumers, other Service Providers and Energy suppliers. For consumers it ensures information is impartial, accurate and up to date. Whilst for Service Providers it ensures that any anti-competitive behaviour is minimised and it gives them equal prominence in the comparison market. For energy suppliers, it ensures that their products are listed impartially on the Service Providers websites, regardless of their commercial agreements.

Homes could be plunged into darkness this winter as the nation faces the shocking prospect of power cuts. The warning, following the release of grim industry figures yesterday, will dredge up memories of the last electricity crisis in 1974. Then, households had to manage with candles, factories were put on short-time and TV broadcasts ended at 10.30pm. The figures from the National Grid suggest that the country could be crippled by energy shortages when the colder weather bites because there is so little spare capacity. The loss of only one of our 38 biggest power stations at times of high demand could lead to breaks in supply, bringing factories to a halt and leaving many homes in darkness. ‘We should be very worried – this is reaching national crisis proportions but the response is piecemeal and inadequate,’ said the industry watchdog. In addition, the rising cost of power could also prompt further ‘savage’ hikes in families’ energy bills, analysts claimed.

The National Grid figures sent the price of wholesale electricity skyrocketing to record levels yesterday. It also focused attention on the Government’s faltering energy policy and evoked memories of the grim period between January and March 1974 when millions endured regular blackouts. Last night Allan Asher, chief executive of Energywatch, warned of a national crisis. On prices, he added: ‘Consumers are being bled white by the generators and the retailers. The outlook is for further price shocks for consumers.’
Eggborough Power Station, a coal fired plant near Selby: Restrictions on coal-burning could also hamper capacity. The National Grid figures detail exactly how much power it expects to have in reserve this winter above its minimum safety target. It said that surplus supplies will be as little as 826megawatts, or 1.5 per cent of total consumption. Only last week, it estimated that the available back up would be 1,373 megawatts.

Such a dramatic reduction in the figure led experts to question whether the country has enough in reserve. The problem, say experts, is that Britain’s ageing and unreliable power generating infrastructure urgently needs billions of pounds of investment. In particular, British Energy has seen a spate of nuclear power plant closures because it is struggling to keep the sites operating. Coal-fired stations are being forced to limit their output because of pollution controls on the amount of carbon dioxide they pump out. This means utilities are often turning to inefficient, oil-fired power stations to make up shortfalls. Britain’s increasing reliance on wind power will also not help, given that output fluctuates wildly depending on the weather. The alarming outlook prompted dramatic moves in wholesale power prices on the financial markets yesterday. The cost of electricity soared to a record £105.25 a megawatt-hour, more than double the £45.90 level for winter a year ago. In May, half a million customers were hit by power cuts after a series of unexpected problems at power stations forced the National Grid to conserve supplies.

Experts have repeatedly warned that Britain will face dangerous shortfalls in its generation capacity by 2015. Even if supplies were imported from France, the likelihood is that they would not make up the shortfall. Yesterday’s moves in power markets reflect fears among traders that we face a power crisis far sooner than that. A spokesman for the National Grid said the outlook was published to encourage power firms to adjust their programme of maintenance over the coming months and he tried to play down the shortage fears. He said: ‘There are a few weeks where because of the pattern of generation outages it (the surplus) has gone down close to our target. But it still above our target.

The U.K., Europe’s second-largest economy, risks power shortages and a jump in utility bills this winter because of repairs to aging nuclear reactors and pollution rules that limit coal burning. The nation’s electric grid cut forecasts for spare capacity today to a level where the loss of any one of its 38 largest power stations at a time of peak demand risks forcing factories to shut down to save energy, data from London-based network manager National Grid Plc show. The last time that happened, in May, wholesale electricity costs jumped 13 percent in a day.

U.K. power prices for this winter rose to a record today and are more than double a year ago after British Energy Group Plc closed two of its eight nuclear power stations and extended maintenance at others, while curbs on sulfur dioxide emissions forced coal-fed plants to cut operating hours. One of the reasons the government supported Electricite de France SA’s 12.5 billion-pound ($23 billion) agreement yesterday to buy British Energy was a pledge to build the first atomic plants since 1995.

National Grid said today that surplus power supplies this winter will be as little as 826 megawatts, or 1.5 percent of consumption, cutting the predicted minimum from 1,373 megawatts last week. The amount represents what’s left after the grid meets peak demand and maintains a margin to provide reliable service. The estimates leave little flexibility. The grid’s forecast is based on information provided by the country’s electricity generators. Peak demand for the week of Nov. 10 is forecast at 56,500 megawatts.

November baseload power, the contract traded via energy brokers for around-the-clock deliveries, rose 8.3 percent to a record 124 pounds a megawatt hour today. Winter baseload was at a record 105.25 pounds a megawatt-hour, more than double the 45.90 pounds a megawatt-hour price for winter a year ago.

The forecast indicates that for now there’s enough generation available, said Stewart Larque, a Warwick, England- based spokesman for National Grid, before the most recent update to the forecast.

“The reason why it is published is so that people can make the right decisions,” he said. “If the figures were negative, that’s when it becomes a signal to the market to make more capacity available.”

Electricity can’t be stored, so production needs to continually meet demand. The power grid has spare plants that only run at times when demand and prices are at their highest. Mothballed generators can return to service if the cushion threatens to disappear, Larque said. Supplies may push prices to “the sort of level that forces industrial demand off the system,” said Jeremy Nicholson, the director of the Energy Intensive Users Group, whose members include the steel and glass industries. “We are heading in that direction.”

Day-ahead baseload power prices this month have reached 124.50 pounds a megawatt hour, the highest since March 2006, and more than three times costs the same time last year. The next- day contract traded at 99 pounds a megawatt hour today.

Sizewell Shutdowns

National Grid said on May 27, the day when the shutdown of British Energy’s 1,200-megawatt Sizewell-B power plant caused supply interruptions in parts of England, that steps to reduce demand were imminent because of insufficient spare supplies. It was the first such notice since 2006. This year it has warned five times that spare supplies aren’t adequate in addition to the demand-reduction notice.

Scottish & Southern Energy Plc and International Power Plc are upgrading plants to comply with restrictions on gas emissions. They may resume normal output in the coming months. “Until that work has been completed, presumably there’s some risk,” Nicholson said.

British Energy plans to start four reactors in the fourth quarter that have been closed for a year because of corroded wires.

Those plants may be needed. Winter temperatures may be colder than normal, according to Jim Dales, senior forecaster at British Weather Services, which sells forecasts to businesses including energy companies.

November and December may be milder, while January and February may “deliver significantly below-average temperatures,” he said.

Morrisons is opening a superstore that monitors how much customers breathe, to save electricity. The store in Kidderminster, Worcs, is fitted with carbon dioxide sensors that set off cold air fans when it is full of shoppers. At quiet times, the fans switch off, saving energy. A Morrisons spokesman said: “It’ll ensure we use the right amount of energy. That’s good for the environment, so it’s a win-win.” The shop, opening Monday, also has solar panels and collects rain for its toilets.

Severn Trent Plc, the U.K.’s second- biggest water utility, said performance in the six months through September is in line with company forecasts as it continues to benefit from higher prices allowed by the industry regulator.

Severn Trent is seeking to keep annual operating costs 3 percent below the regulator’s target through the next two years, the Birmingham, England-based company said today in a statement. Commodity and chemical prices, which affect such costs, remain volatile, it said.

The utility, which supplies water to more than 8 million people, has over the past few months agreed to pay fines to resolve regulatory issues encountered under previous management. U.K. water companies’ sales are rising as industry watchdog Ofwat allows customer-price increases to fund investments.

Revenue in the year through March climbed 4.9 percent to 1.48 billion pounds ($2.75 billion), Severn Trent said in June. Ofwat has allowed the second-biggest British water company after United Utilities Group Plc to raise prices an average 4.5 percent a year through 2010.

Severn Trent today said infrastructure spending for the six months to Sept. 30 is expected to be about 60 million pounds, about 45 percent of total net expenditure for the year. Net debt, excluding adjustments, will probably be about 3.5 billion pounds at the half-year interval, it said.

The company last month said it wouldn’t appeal a record 35.8 million-pound fine handed out by Ofwat for providing false data and poor customer service between 2005 and 2007. The utility also said at the time it would pay 5 million pounds to low-income customers following talks about a March 2006 regulatory report that it submitted incorrect data in 2002 and 2004.

Severn Trent in July was docked 2 million pounds in court after pleading guilty to charges from the U.K.’s Serious Fraud Office for hiding leakage data from the regulator in 2001 and 2002 to avoid costly repairs. No individuals were charged.

Customer bills will need to rise “slightly above inflation” so that the company can fund a planned 3.2 billion- pound investment program in the five years through 2015, it said last month. Utilities have submitted proposals to Ofwat for how price limits and customer-service and infrastructure improvement targets should be determined for the period.

Chief Financial Officer Mike McKeon said in June that the company has hedged for 93 percent of energy costs this fiscal year and expects electricity charges to rise by about 10 million pounds from last year.

The company will announce first-half results on November 25th.

French group EDF has agreed a £12.5 billion takeover of British Energy in a move set to kick-start the UK’s nuclear power strategy. The state-owned utility giant will pay 774p a share, 9p higher than the price offered in July which was rejected as too low by major British Energy shareholders. British Gas parent Centrica is also in talks to buy a 25% stake in the new British Energy following the deal, it was confirmed on Tuesday. Prime minister Gordon Brown welcomed news of the takeover as “good value for the taxpayer and a significant step towards the construction of a new generation of nuclear stations”.

The deal will see EDF take control of all of British Energy’s (BE) nuclear power stations and play a leading role in the development of new stations in the UK, which are likely to be built on BE’s existing sites. It will also allow the UK Government to bank a multi-billion pound windfall from its 36% stake in the firm. EDF said on Wednesday it planned to build four new nuclear reactors in the UK and would maximise the potential of British Energy’s eight nuclear power stations. But the Government has stressed that it wants other players in Britain’s nuclear power industry. British Energy employs around 6,000 staff and produces around a sixth of the UK’s electricity. EDF pledged to “recognise and appreciate” the importance of BE employees and said it would safeguard their employment and pension rights. Pierre Gadonneix, chairman and chief executive of EDF, said: “For EDF, this is an historic milestone in our strategic development plans in Europe and enables the EDF Group top develop significantly in the UK one of its key markets. “For British Energy it places it at a the vanguard of new nuclear build in the UK and at the centre of the global nuclear renaissance.”

Energy price hikes have brought people to feel the need for change. Approximately half of the UK’s households have never changed their gas or electricity tariff but only 20 per cent of people surveyed now say they wouldn’t change their tariff if an annual saving of up to £200 was on offer. Research by price comparison site moneysupermarket.com shows energy users could save a whopping £483 by swapping – well over double the saving that most people crave. Scott Byrom, utilities manager at moneysupermarket.com, said: “The hammer blow of two rounds of price hikes so far in 2008 means people are in more need than ever to tighten their purse strings. Gas has risen by 52 per cent since the start of the year and electricity by 28 per cent. Every pound counts at the moment, especially with other day to day living costs on the rise too. “With winter looming, it’s encouraging to see a large proportion of bill payers are actively looking to save.” Londoners and the Welsh are keenest to save, with only 17 per cent of them being unimpressed by a saving of £200. Those in East Anglia though are least likely to change, with 25 per cent unmoved by a £200 cut, including an astonishing 16 per cent saying they would never change.

Scott Byrom added: “The survey found 11 per cent of people would never swap supplier, which is quite worrying. I would have thought a potential saving of £200 would have been enough to convince everyone to take that simple step. “British Gas Click Energy 5 is the cheapest tariff on the market at present, but its price might increase soon. Even if it does, virtually all online, monthly direct debit tariffs will still be cheaper than any Standard deal.

“I advise anyone languishing on a Standard tariff to move on to the best deal now to avoid wasting your hard earned cash. For bill payers seeking security in their outgoings, fixed tariffs should also be considered. Scottish Power’s Fixed Price Energy 2009 is cheaper than most Standard tariffs, but of course more expensive than online offerings.”

Gas and electricity customers could lose out as a result of Centrica’s failure to achieve a merger with British Energy, according to M&G, which has significant holdings in both companies. M&G believes that a Centrica/British Energy deal would have been better than the EDF takeover not only for British Energy’s shareholders but also for the country. With Britain’s North Sea gas production in steady decline from its peak in 2000, the country is becoming increasingly dependent on imports. National Grid, which runs the gas and electricity transmission systems, estimates that this winter about half of Britain’s possible supply capacity will be from imports, whether of pipeline gas from Norway, the Netherlands and Belgium, or of liquefied natural gas from countries such as Qatar and Egypt. In continental Europe, most gas supplies are secured on long-term contracts, meaning that the British market is typically used to provide flexibility for suppliers. In the words of one industry expert, Britain is the “swing consumer” of gas: “We are left on tenterhooks to see what European demand will be, and how much will be left for us.” That means British gas prices – and hence electricity prices, which are tied to gas – tend to be more volatile than prices on the Continent, creating difficulties for both business and residential customers. M&G says a merged Centrica and British Energy, as the UK’s biggest retail energy supplier and biggest power generator, would have been in a much stronger position to secure stable long-term gas supplies. In return for providing that greater stability, the new national energy champion would have been allowed to earn good profits, M&G argued. Centrica has also argued that Britain needs a strong national energy company. As the prospect of a deal with EDF over British Energy has approached, however, it no longer makes the point quite so strongly. The government has anyway had little truck with such arguments: all along it has backed the EDF deal, convinced by the French group’s nuclear expertise and financial strength. Falling oil prices, now down almost $50 a barrel from their July peak, have taken some of the heat out of the debate over gas prices and security of supply.

But if there are shortages and prices surge over the winter, questions about the opportunity the government missed may be raised forcefully again.

The price of oil has jumped by more than $16 to $120.92 a barrel, the biggest one-day gain on record. There is uncertainty about how the government’s financial bail-out plan will work, causing investors to switch to perceived safe havens such as oil. Others believe that the US government’s bail-out plan will help the economy, increasing demand for oil. Concerns also persist about supply as production in the Gulf of Mexico is still affected by Hurricane Ike. However, analysts said the US rescue package was key. “It has changed sentiment in the oil market,” said analyst Paul Harris from Bank of Ireland. At one point during trading, the price of oil rose by more than $25. The volatility in the price has been exacerbated by the fact that the contract for the supply of oil in October expires on Monday. The contract for oil to be delivered in November was not up as sharply. It rose by $6.62 to $109.37 in New York. Last week oil traded as low as $91 a barrel. It had fallen from the peak of $147 a barrel it reached in July.

What is the connection between the bankrupt Lehman Brothers and the likelihood that in four years’ time our electricity bills will jump another 25% (on top of the rises likely from soaring coal and gas prices)? The answer is that, before its collapse, Lehman was pitching to become the leader in the vast trade created by the new worldwide regulatory system to “fight climate change” by curbing emissions of carbon dioxide. The biggest money-spinners will be the schemes whereby industry will pay for permits to emit CO2 at so much a ton, either directly to governments or by buying them on an international market. This market, soon to be worth trillions of pounds, was where Lehman hoped to be “the prime brokerage for emissions permits”, as it set out in two hefty reports on “The Business of Climate Change”.Advised by some of the world’s leading global warming activists, such as Dr James Hansen and Al Gore (a close friend of the firm’s erstwhile managing director Theodore Roosevelt IV), Lehman bought their message wholesale. GIM, the company set up by Gore to sell “carbon offsets” in return for planting trees, was a prized Lehman client. The particular market that Lehman hoped to dominate is centred on the buying and selling of carbon permits, through the EU’s Emissions Trading Scheme (ETS) set up in 2005, the UN’s Clean Development Mechanism (CDM) and the “cap and trade” system proposed for the US by both McCain and Obama.

This may still seem abstract but it will affect all our lives, because ultimately we will all be paying for it, through the colossal costs it will impose on industry, not least electricity.

The EU scheme already adds more than a billion pounds a year to our electricity bills. In four years’ time it will become much more obvious when, under phase two of the ETS, permits will be auctioned, at a projected initial figure of £35 per ton of CO2.

On the basis of current wholesale prices, the annual cost of electricity used in the UK alone is around £32 billion. Adding £35 for every ton of CO2 emitted in producing it will mean that our electricity supply companies will have to pay £8 billion for their permits, adding 25 per cent to the total cost. Under EU rules, this must be passed on to all of us in our bills.

The idea is that, to reduce carbon emissions by an eventual 60 per cent, the number of permits auctioned will reduce year by year, leaving an ever larger shortfall which firms will have to account for either by reducing emissions or by buying additional permits – not least from the developing world under the UN’s CDM. Everything about this grandiose scheme betokens the economics of the madhouse.

The new costs it will impose are so colossal that whole industries, including aluminium, steel and Germany’s chemical companies, threaten to move their operations outside the EU unless they are given free allocations. It has not even been agreed who – whether national governments or the EU itself – will run the auctions or keep the hundreds of billions of euros a year the scheme will raise.

China, by virtue of having built giant dams to produce electricity, will be a net “carbon creditor”, able to sell permits to the EU worth billions more, despite continuing to build a new coal-fired power station every four days.

So will Russia, thanks to it having closed down so much of its polluting industry after the fall of Communism. There is not the slightest indication that the scheme itself will result in any lowering of global CO2 emissions.

What is certain is that it will pile astronomic costs onto everyone in the EU, inevitably impacting most severely on poorer householders that will face bills they cannot afford. The only other certainty – perhaps a consolation – is that those sharing in this bonanza will not include Lehman Brothers, now excluded from cashing in on what threatens to become the maddest scam the world has ever seen.

BBC series stitches up sceptics in counter-attack over climate change

As informed questioning of the global warming orthodoxy rises on all sides, the BBC’s three-part series Climate Wars, ending tonight, bears all the marks of a carefully planned counter-attack.

BBC science producers were apoplectic at the attention given last year to Martin Durkin’s Channel 4 documentary The Great Global Warming Swindle, featuring a galaxy of the world’s more sceptical climate scientists. This is their riposte.

Last week, against a range of far-flung locations from Greenland to California, the presenter, Dr Iain Stewart, tackled three of the main arguments of Durkin’s film.

In each case the technique was the same. After caricaturing the sceptics’ point, with soundbite clips that did not allow them to develop their scientific argument, he then asserted that they had somehow been discredited.

For example, doubts had been raised over the reliability of satellite temperature records which do not show the same degree of warming as surface readings. Dr Roy Spencer, who designed Nasa’s satellite system for measuring temperatures, was allowed to admit that a flaw had been found in the system.

But his interview ended before he could explain that, when the flaw was discovered in 1998, it was immediately corrected (although it made little difference to the results).

Likewise, there is a growing case for a correlation between global temperatures and solar activity. Dr Stewart accused Durkin’s programme of cutting off a graph which illustrated this at a point when the data failed to support the thesis. Then he did exactly the same himself, not extending his own graph to 2008 in a way that would reinforce the thesis.

Most hilarious of all, however, was a long sequence in which Stewart defended the notorious “hockey stick” graph, which purports to show that temperatures have recently shot up to their highest level on record.

The BBC had a huge blow-up of this “iconic” graph carted triumphantly round London, from Big Ben to Buckingham Palace, as if it were proof that the warming alarmists are right.

There was no hint that the “hockey stick” is among the most completely discredited artefacts in the history of science, not least thanks to the devastating critique by Steve McIntyre, which showed that the graph’s creators had an algorithm in their programme which could produce a hockey-stick shape whatever data were fed into it.

There was scarcely a frame of this clever exercise which did not distort or obscure some vital fact. Yet the “impartial” BBC is sending out this farrago of convenient untruths to schools, ensuring that the “march of the lie” continues.

In their first ever utilities satisfaction survey Which? surveyed over 8,600 of it’s members to see what they thought of their gas and electricity suppliers. With average household energy bills standing at almost £1,300, both gas and electric prices have seen increases in excess of 70% since 2003, leaving many households struggling.

The results of the survey will not please the ‘big 6′ energy suppliers, as they found Utility Warehouse to be the best overall supplier with a satisfaction score of 72%, compared to the worst performer, Npower, who came out with a satisfaction score of 32%. The main reasons why Utility Warehouse did so well in the survey were, accurate billing, excellent customer service, quality telephone support and also full marks for value for money. Even though their tariffs will not necessarily be the cheapest at any point in time, they offer their Triple Value Guarantee for customers to ensure great value for money.

This survey only covers energy so doesn’t take into account other services offered by Utility Warehouse, this is where consumers can achieve even greater savings, as well as equally fantastic value for money, and excellent customer service. Other services include landline and mobile telephone services and also broadband packages – they also allow you to bundle packages together to offer free call packages to landlines – depending on how many services are taken from them. The more service taken the greater the amount of savings that can be made.

Recently Utility Warehouse have launched a customer referral scheme, where existing customers can recommend family and friends, and earn a discount off their bill for doing so. This scheme even allows cusotmers to get a full 100% reduction on their bill for referring enough new customers to the business. This discount is applied monthly and for as long as the referred customers remain with the Utility Warehouse.

With their annual conference coming up next weekend, expect more exciting news from the Utility Warehouse as they launch their assault on the remaining 98% of the UK utility market.

Britain’s tap water should be monitored for powerful medicines after traces of cancer and psychiatric drugs were detected in samples, a report has warned. The 100-page statement, commissioned by the drinking water watchdog, the Drinking Water Inspectorate (DWI), reveals that pharmaceuticals are finding their way into the water supply despite extensive purification treatments used by water companies. Trace levels of bleomycin, a cancer chemotherapy drug, and diazepam, a sedative, have been found during tests on drinking water, the report reveals.

While the levels are considered too low to pose a direct risk to health, doctors have expressed concern about exposing pregnant women to drugs that could harm an unborn child. The report, compiled for the DWI by the consultants Watts and Crane Associates, recommends that drinking water should be monitored for hazardous drugs. The report states: “The observed concentrations of pharmaceuticals in raw waste water indicate that the major source of pharmaceuticals to the environment is via sewage treatment works effluent.

“Drinking water treatment works use a wider and technically more advanced range of processes, but again these are not specifically designed to remove pharmaceuticals and several compounds have been reported in drinking water.”

But it adds: “Even in the worst-case situation, there is no significant risk to health from the intake of pharmaceuticals via drinking water.”

Sue Pennison, from the DWI, said: “The recommendations are now being considered and this may include conducting testing on drinking water.”

The report comes as a separate study by environmental scientists has warned that toxic chemotherapy drugs used to treat cancer patients are being washed into Britain’s rivers. They, too, have called for testing of tap water to ensure there is no risk to people.

The study, carried out at the Centre for Ecology and Hydrology in Wallingford, Oxfordshire, examined the risks posed by chemotherapy drugs that escape into the environment through sewage.

The researchers estimated that an adult drinking more than three pints of water a day would receive a weekly dose of between 300 and 30,000 times lower than recommended safety levels.

They warn that a developing foetus would also be exposed to the drugs in the womb.

Andrew Johnson, the scientist who led the Wallingford study, said: “In the foetus, which is rapidly growing and comparatively tiny, the dose would be relatively higher and any damage to its cells could be far more serious.

“There is not evidence to show that drinking water treatment removes all these drugs, so while we are not wanting to alarm people, it would be foolish to assume there is no risk.”

New smart metering technology to measure energy use in the home would benefit electricity suppliers, consumers and meter distributors – but a lack of clarity over precisely where the benefits will fall is slowing the rollout, according to panelists at an industry round table earlier this week. Experts agree that the case for smart meters is compelling.

Pilots have shown that they will help reduce consumers’ energy bills by giving them more accurate information about where and how they are buying electricity, while they should also help improve competition in the market by making it much easier to change supplier.

Equally, smart meters will help suppliers meet government targets to reduce their customers’ energy use and provide clearer ways of delivering supply and billing, while also ensuring that they should have to build fewer costly new power stations.

The government and businesses meanwhile should see overall energy use and carbon emissions fall as they seek to replace a 50 year old distribution network that needs updating anyway.

But while the benefits are spread far and wide, it is not financially viable for any one entity to take control of the rollout, which at the moment is estimated to take some 10 to 14 years depending on estimates.

“Although rollout would be beneficial to suppliers, distributors, customers and more widely UK plc, the competitive energy market over here has fragmented any holistic business case,” said Chris Beard, principal consultant with technology services firm Logica.

Consequently, electricity suppliers and consumer groups both want a government mandate for rollout. “We support a mandate – we think with the relevant safeguards the barriers to rollout can eventually be overcome,” said Cassie Higgs of the National Consumer Council.

Finlay MacDonald, advanced metering programme leader at Scottish Power, agreed that without a mandate, a wide scale rollout of smart meters remains unlikely. “We don’t have a compelling supplier business case for universal rollout across our customer base,” he admitted.

It is likely that other power companies have the same problem – distribution of the 45 million or so meters needed is a relatively minor issue when compared to the infrastructure investment required by energy suppliers to support them.

Scottish Power estimates full smart meter rollout would mean a 4,000 fold increase in data volumes and significant investment in back office IT would be required to deal with this amount of information.

The department of Business Enterprise and Regulatory Reform (BERR) accepts that the business case alone is not really strong enough to encourage adoption of the technology, estimating that suppliers are only likely to roll out smart meters to 20 to 30 per cent of the market if driven solely by the commercial case.

However, customers are keen on the idea of smart meters. According to a recent survey by the National Consumer Council, three quarters of consumers think they are a good idea across all socio-economic groups.

There are three proposed models for a mandated roll out that could tackle the fragmented nature of UK power supply. First, franchises on a regional basis that would leave each supplier responsible for rollout in a particular area. Second, a central rollout with one company contracted to operate it nationally. Third, mandated rollout of smart meters built around existing metering market structures.

The government is currently consulting on its options.

“This is a very big ball, so you want to make sure its pointing in the right direction before you push it down the hill,” said Beard. “Probably the most likely option is a hybrid model of the different offerings.”

And a mandated rollout must be accompanied by an effective education campaign to encourage consumer uptake.

“Getting into schools and educating children about these things is the way forward – they’ll then persuade the parents,” said Peter Kennedy, chief executive of smart meter distributor bglobal.

As well as communicating upstream with supplier systems, smart meters have the potential to communicate downstream with innovative home display units.

Ensuring this functionality is included in any smart meters that are rolled out under a mandate is vital to having a thriving home display market, said Patrick Caiger-Smith, chief executive of home display maker Green Energy Options.

“The meter needs to be able to communicate both ways and the requirement can be specified, but not the technology,” he argued. “This will allow for a blend of home solutions to be offered, and means home displays will evolve fast.”

Displays have the potential to measure the energy use of individual appliances, allow homes to compete with one another on low energy use, and present energy information in new and innovative forms, engaging the customer, he added.

A spokesman for BERR said the department is looking to make final decisions on how to manage any smart meter rollout later this year.

E.ON UK has today announced that it is to streamline its Energy Services operations by cutting 400 jobs. The company hopes that the reductions will be made by voluntary redundancies wherever possible and will be offering counselling and support to all affected staff. E.ON is also looking into the possibility of re-deploying staff within the business.

Dr Paul Golby, Chief Executive of E.ON UK, said: “This was not an easy decision for us to take, but this is the first step as we take a long hard look at our costs, so keeping them as low as possible to ensure we offer customers the best possible service at the lowest cost.

“Going forward we can’t rule out further announcements as we look to make our business leaner and more efficient so that we can make energy as affordable as possible for our customers.”

The Energy Services arm of E.ON’s business, which connects homes and businesses to power and gas, lights streets, installs energy efficiency measures and boilers and provides a range of metering services, has been particularly hit by the recent downturn in the UK property market. The cuts will be made across the Energy Services business over the next six months, with the planned reductions being 150 in home installations, 100 in metering, 75 in new connections and 75 in back office staff.

There are currently 4,400 people working in E.ON’s Energy Services arm.