Utility Week

UTILITY WEEK | 5TH - 11TH OCTOBER 2018 | 19 Operations & Assets Operations & Assets Altrad, Balfour Beatty Bailey, Caven- dish Nuclear and Doosan Babcock. Concrete production for the project to date has exceeded 200,000 cubic metres and 5.3 million cubic metres of earth have been moved. A 500m jetty has been built to import aggregates by sea, reducing the environmental impact of construction. Full construction at Hinkley Point C got underway aer EDF, its Chinese partner, CGN, and the UK government signed final contracts in September 2016. Initial delivery of unit 1 is expected at the end of 2025. If you have an asset or project you would like to see featured in this slot, please send pictures and details to: paulnewton@fav-house.com Market view Setting standards in energy retail Ofgem's review of supply licences must protect customers without compromising competition on service quality. A er the recent collapse of Iresa and other chal- lenger suppliers, Ofgem's decision to review its approach to issuing energy supply licences – including the criteria against which licence applica- tions are assessed – may seem a bit like shutting the door aer the horse has bolted. However, it presents an opportunity to clarify regulation in retail supply. The current arrangements for obtaining a supply licence do not require the applicant to undergo extensive vetting but are aimed instead at maximising market entry, to support competition and innovation in the retail sector. If Ofgem decides to go down the path of vetting prospective suppliers prior to allowing entry into the market, it will have to set out minimum standards that are both measurable and objective so it is clear to new entrants what will be expected of them. Ofgem will also have to ensure that it does not set the bar for minimum performance standards too high, not only because this may deter new entrants, but also because non-price competition is a way in which sup- pliers differentiate their offerings. Setting standards too high would take away the potential for competition on service quality. The imposition of some objective criteria for service standards may have some benefits for suppliers. In particular, it should provide a more objective measure for determining when a supplier is acting unfairly. In the recent and well publicised case of Iresa, which, before its demise, regularly came in as one of the cheapest deals on the market, Ofgem imposed exten- sive restrictions on its operations through a provisional order. Ofgem's reasoning was centred on alleged unfair treatment of customers, largely on the grounds of poor service, using Ofgem's own metrics. The scope of Ofgem's review will apparently include the possibility of greater powers to revoke the licences of suppliers whose poor performance adversely affects consumers. The current powers are limited and require a process to be followed in which revocation is a last resort. Any change in this area will have to be balanced and proportionate or competition may be affected. Ofgem's forthcoming consultation will give all energy providers an opportunity to have their views heard and influence industry reform. The review is an opportunity to clarify the minimum standards expected of energy suppliers and to do so in a manner that will benefit both suppliers and their customers. Mark Bartholomew, partner and energy sector specialist, Shakespeare Martineau

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