Utility Week

10 | 26TH OCTOBER - 1ST NOVEMBER 2018 | UTILITY WEEK Policy & Regulation This week ROC fees missed by 34 energy suppliers 'Unprecedented' number of suppliers are late with Renewables Obligation Certificate payments An "unprecedented" number of energy suppliers have missed the deadline for making their Renewables Obligation Certifi- cate (ROC) payments in full. A total of 34 suppliers failed to meet their full obligations by the 1 September deadline, resulting in a combined shortfall of £102.9 million in the England and Wales, Scotland, and Northern Ireland buy-out funds (up from £18.7 million in 2017). This works out at an average of £3.02 million per supplier. These suppliers now owe late payments, with interest, which are due by 31 October. A letter from Ofgem to suppliers, seen by Utility Week, said the regulator is "concerned" to have seen an "unprecedented" number of companies deferring payments into the late payment period. It said compliant companies may be forced to pick up the slack if late companies fail to meet their obliga- tions by the late deadline, and this could lead to these non-compliant companies benefiting from "unwarranted financial gain". Failure to meet the late deadline could also mean renewable generators receive less income, as the "recy- cle value" of the ROC will be impacted. Although there is a £15 million mutualisation fund to protect renewable generators, it is likely that this year the fund will be used up. In this instance, the shortfall will be covered by compliant suppliers and, ultimately, consumers. In 2015/16, five suppliers made late payments; this increased to 21 in 2016/17. One industry source said there are some "relatively large" suppliers in the mix for late ROC payments. They told Utility Week they foresee a "bloodbath" in the small and mid-tier supplier space. LV ELECTRICITY Call for acceleration of charging network The government has been urged by MPs to investigate requiring network companies to remedy gaps in car charging infrastruc- ture and accelerate the ban on the sale of diesel and petrol cars. A new report by the Busi- ness, Energy and Industrial Strategy (BEIS) select commit- tee on electric vehicles (EVs), published on 19 October, says the government's ambition to create a nationwide charging infrastructure is "hampered" by its reliance on councils and network operators. It says a more strategic, UK- wide approach would be "better equipped to deliver a fit-for-pur- pose public charging network". The committee recommends that ministers should examine options to incentivise or require network companies to facilitate the development of charging points. The report says: "There are concerns that network compa- nies have sometimes obstructed the development of charging infrastructure and that they have little commercial incentive to promote EVs." It says the government should draw up a shared approach to planning national charging infrastructure by December 2019 and carry out an assessment with network com- panies to identify pinch points in emerging demand for EVs by June next year. The report also recommends that the UK-wide phase-out of new diesel and petrol car and van sales should be brought forward from 2040 to 2032 in line with the Scottish government's more ambitious timeframe. GAS BEIS to probe UK security of supply Worries about the security of UK gas supplies are to be investi- gated by the Business, Energy and Industrial Strategy (BEIS) select committee, the group's chair has announced. MP Rachel Reeves told the Energy UK annual conference on 16 October that her committee will be holding an inquiry into the issue, which is also being looked at internally within the BEIS department in the wake of Centrica's closure of Britain's biggest gas storage facility at Rough in the North Sea. The committee will examine issues around UK gas security and gas storage, the govern- ment's approach to diversity of supply, and the actions the government is taking to ensure the supply system is robust and secure. Reeves said: "We will check that the government has the necessary measures in place to cope with everything that the weather might throw at us and whether the gas market is mature and liquid enough to respond in a timely and afford- able way to spikes in demand for gas." Cutting it close: late payments due by 31 October A narrow focus on costs is preventing the water sector from playing a valuable role in the decarbonisation of electricity, academics have warned. The comments were made at the Low Carbon Networks and Innovation Conference hosted by the Energy Networks Associa- tion in Shropshire last week. Imperial College London pro- fessor of energy systems, Goran WATER Price controls 'prevent the sector from aiding decarbonisation' Strbac, told delegates: "If you control and design water pumps slightly differently you could actually help the electricity system and the benefits would be bigger than the costs. "But currently in the water industry they've got lots of pres- sure to do things at a minimum cost and it's not linked yet to the electricity system." Phil Taylor, head of engineer- ing at Newcastle University, agreed that the water sector could potentially make an important contribution to the decarbonisation of power, but is being prevented from doing so by price control regulations. "Scottish Water have done some work, not looking neces- sarily at how to invest differently when they upgrade a plant, but just looking at the flexibility they've got in terms of time of use," he explained. "Then they started to look at what Goran's talking about but their regulator said to them: 'No, you must stick to your core busi- ness. Your core business is being a water company. Don't start straying outside that into think- ing you're an energy company.'" Taylor said regulation needs to be joined up across sectors.

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