Utility Week

UTILITY WEEK | 7TH - 13TH DECEMBER 2018 | 7 News following through on the principles outlined by Clark: "They have taken things off the table and not added to them. If you are interested in optionality and insurance you should be investing in tidal and a smart, flexible decentralised system. "Greg Clark is a good guy and is saying the right things. But he's not done the things that would follow from the principles: in fact, he's done the reverse." Davey points to the government's cancellation earlier this year of the Swansea Bay tidal lagoon. When it comes to Clark's principle of free- riding, the idea that well-heeled customers should not be able to opt out of the costs of paying for the cost of the network by invest- ing in off-grid technology, Parr sees there is an issue. And he suspects that the way the prin- ciple is enshrined could be a way for those with an interest in the existing centralised energy network to delay the transition to a more decentralised system in which individ- ual households meet a growing share of their own power needs. A public good He suggests networks should be treated by society as a public good, as it does other infrastructure such as roads and railways. "These are things that a civilised society expects. I'm not sure where the inherent logic is that all this is to be paid through energy bills, any more than all roads need to be paid for with vehicle tax, or railways have to be provided for through ticket sales." Clark promised in the speech that BEIS would be publishing a policy paper on energy, which will be published in the coming weeks and a White Paper "early next year". Pointing out that the Conservatives have been in power on their own for three years while Clark has been in his current post for two-thirds of that time, Davey argues that Clark's "speeches dealing in principles don't really cut it". As an example of the lack of concrete action, he points to what he sees as a lack of urgency on establishing whether hydro- gen can be the low-carbon replacement for gas in domestic heat. "I'm not saying this is the future, but we don't know until we have done a few trials to test out different heat technologies," he says. "They keep saying stuff but not doing it. At some stage somebody is going to point out that the emperor has no clothes on," he adds. Greg Clark has set out a vision: his task over the next few months will be to prove that it is more than hot air. Set a universal carbon price across the whole economy – including border carbon price to prevent emissions being exported. Move rejected on the grounds that it is premature without more advanced international co-operation on climate change policy. Bundle feed-in tariffs, contracts for difference, the Renewables Obligation and the capacity market into a unified equivalent firm power auction. Shares Helm's vision of a technology-neutral framework for low- carbon auctions but says the government must retain ability to intervene at a strategic level to maintain flexibility of supply. Separate out, ring- fence and place the legacy costs of the Renewables Obligation, feed-in tariffs and contracts for difference on customer bills while exempting industrial energy users. "Legacy bank" rejected on the grounds that exempting industry from historical policy costs would add £1.5 billion to either household bills or to the Exchequer. The government should establish an independent national system operator and regional system operators under public ownership, replacing a number of duties currently undertaken by distribution network operators and Ofgem. The government has already separated National Grid's transmission and system ownership functions and will consider full separation if 'necessary'. Also, it has announced a review of network codes. DIETER HELM GREG CLARK

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