Utility Week

UTILITY WEEK | 11TH - 17TH JANUARY 2019 | 3 This week 4 | Seven days 6 | Inside story The New Year kicks off with an energy price cap 8 Policy & Regulation 8 | News Four suppliers given price cap derogation 10 | Opinion Tom Kelly, wholesale services director, SES Water 11 | Chief executive's view Peter Simpson, Anglian Water 12 | Analysis The four winners of Ofgem's Networks Innovation Competition 15 Finance & Investment 15 | News Greencoat to buy no- subsidy wind project 16 Operations & Assets 16 | High viz Wind finalist for World Architecture Festival Experimental Award 17 | Market view New year – same old problems 18 | Analysis How whole-systems planning can help decarbonise networks 21 | Market view Energy networks under scrutiny 23 | Market view Water companies must embrace behavioural change and innovation 24 | Case study Anglian Water, the Utility of the Year 2018 27 Customers 27 | News Ofgem in talks with Outfox the Market 29 | Market view Weathering the storm when winter strikes 30 Community 31 | Disconnector GAS 5 | News Drax completes on Scottish Power gas portfolio WATER 10 | Opinion Tom Kelly, SES Water 11 | Chief executive's view Peter Simpson, Anglian Water 17 | Market view New year – same old problems 23 | Market view Water companies must embrace behavioural change and innovation 24 | Case study Anglian Water, the Utility of the Year 2018 29 | Market view Weathering the storm ELECTRICITY 12 | Analysis The four winners of Ofgem's NIC 15 | News Greencoat to buy no-subsidy wind project 16 | High viz Wind finalist for Award 18 | Analysis How whole-systems planning can help decarbonise networks ENERGY 6 | Inside story The energy price cap 8 | News Four suppliers given price cap derogation 27 | News Ofgem in talks with Outfox 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 The year of the cap Energy companies have long been resolved to a challenging 2019. No sooner had the chimes of Big Ben faded into the winter air to be replaced by the sound of millions of New Year party poppers than a milestone moment for the industry dawned on 1 January. As entrances go, the government's introduction of a price cap on default tariffs has certainly had a decent build-up (see analysis, p6). Among other things, it was cited as one of the key reasons behind the surprise collapse at the end of last year of the much heralded Npower/SSE retail merger, which was supposed to usher in a land- mark shake-up of the structure of the energy market. Which is why it's never wise to make predictions. However, no-one needs a crystal ball to see that there are some critical times ahead for energy suppliers now the historic market intervention, capping typical standard variable tariffs for dual-fuel customers at £1,137, has become a reality. Over the past two years companies may well have grown used to the idea of a New Year price fix, but there will still be unknown impacts ahead for energy suppliers of all shapes and sizes. Despite the cap arriving in line with forecasts, it is still likely to have been set either higher or lower than some suppliers had in fact budgeted for. Among some of the early noises I have been hearing from the industry is that with so much mixed supplier reaction to the move, and volatile wholesale prices, the jury remains very much out on what the long-term effect of the cap will be. Yes, it looks set to help address the market issues created by those companies that adopted more extreme pricing strategies, and the dispersion created between the cheapest non-standard tariffs and the most expensive. And certainly, it looks set to squeeze out some of the least efficient players – although this too has uncertain consequences for others. Yet how it will ultimately impact consumer behaviour as meas- ured by switching remains to be seen, since the numbers released for November put 2018 on track to break 2017's 5.5 million record. It's hard to miss the irony of the timing on all this. An energy price cap has been threatened and debated for years, and just before as it's finally implemented the market records its highest ever figures on customer engagement. Who could have predicted it? Suzanne Heneghan, acting editor, suzanneheneghan@fav-house.com Leader Suzanne Heneghan

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