Utility Week

Utility Week 16th November 2018

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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UTILITY WEEK | 16TH - 22ND NOVEMBER 2018 | 3 This week 4 | Seven days 6 | Inside story Have some energy suppliers joined the ranks of the 'can't pays'? 8 | Interview John Reynolds, chief executive, Castle Water 12 Policy & Regulation 12 | News Ministers could have 'salvaged' Moorside nuclear project 15 | Obituary Robert Symons, chief executive, Western Power Distribution 16 | Event Rethinking decarbonisation incentives with the Energy Systems Catapult 18 Finance & Investment 18 | News RWE shelves energy storage and gas plant 19 | Chief executive's view Barney Cook, Eversmart 20 Operations & Assets 20 | High viz Thames Water 21 | Expert view Nick Offin, head of sales, marketing and operations at Toshiba Northern Europe 22 | Analysis The challenges faced by the Thames Tideway Tunnel 27 Customers 27 | News SSE and Npower retail merger delayed 28 | Analysis How water companies are helping vulnerable customers 30 Community 31 | Disconnector GAS 18 | News RWE shelves energy storage and gas plant WATER 8 | Interview John Reynolds, chief executive, Castle Water 20 | High viz Thames Water 22 | Analysis The challenges faced by the Thames Tideway Tunnel 28 | Analysis How water firms are helping vulnerable customers ELECTRICITY 12 | News Ministers could have 'salvaged' Moorside nuclear project 15 | Obituary Robert Symons, chief executive, Western Power Distribution ENERGY 6 | Inside story Have some energy suppliers joined the ranks of the 'can't pays'? 16 | Event Rethinking decarbonisation incentives with the Energy Systems Catapult 19 | Chief executive's view Barney Cook, Eversmart 21 | Expert view Nick Offin, Toshiba Northern Europe 27 | News SSE and Npower merger delayed Could merger delay prove a smart move? Speculation has been rife about the future of the SSE/Npower retail merger since news emerged on Friday of its delay. While some indus- try analysts denounced the hold-up as "a shambles" (with the deal previously considered imminent but now unlikely to complete until the first quarter of 2019), another commentator was excitedly sound- ing the death knell for the entire energy retail market. Official explanations that "adverse UK market developments" and "regulatory interventions" (such as the long-anticipated price cap) were having a "significant impact" on the outlook for the combined company did little to quell the noise. Yet just how accurate the criticism is about the proposed merger remains unclear. Should we really be so surprised that those behind a major trans- action between two big six giants in a relentlessly volatile market- place are taking stock? Certainly, cooler heads that Utility Week spoke to this week were viewing news of the delay as far less apocalyptic – logical even – at what is effectively a staging post in the process of understanding what the energy market is becoming. And while they accept the default tariff 's ceiling price came as no surprise, it was only once the figure was confirmed that a new certainty arrived, along with a need to reassess. Could this purely be a sensible checking exercise, then, an exam- ple of due diligence on behalf of shareholders? And has the reaction of some sector watchers been overblown? Possibly, possibly not. The erratic behaviour of SSE's share price on Friday highlighted the significance of the development in a deal being watched closely by the whole industry. The price cap news will have provided further clarity or con- firmed worst fears. Either way, we have now begun the difficult process of living in a new price-regulated market. Whether an incumbent supplier or an insurgent brand, com- panies will need a thorough understanding of what this all means in terms of opportunities and risks if they are to make appropriate decisions. For two merging giant retailers, with reassessment happening on both sides of the arrangement, it was always going to be compli- cated. Are Innogy and SSE simply having to look a lot more closely than others? Suzanne Heneghan, acting editor, suzanneheneghan@fav-house.com See news, p27 Leader Suzanne Heneghan Talend: Sponsored Free Water Case Study: optimising water supplies https://bit.ly/2CEQQpf IFS: Sponsored report: Getting Ahead in the Diversifying Energy Market https://bit.ly/2MXkFkI Unify: Sponsored Free Water Case Study: Transform CX and deliver exceptional omnichannel experiences https://bit.ly/2CEQQpf

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