Utility Week

UTILITY WEEK | 31ST MAY - 6TH JUNE 2019 | 3 This week 4 | Seven days 6 | Interview Juliet Davenport, chief executive, Good Energy 11 Policy & Regulation 11 | News Networks face low returns under RIIO2 12 | Event Telecoms systems are not fi t for a distribution system operator future 15 Finance & Investment 15 | News Cadent to pay £24m for past failures 18 Operations & Assets 18 | High viz Cemex invests in Californian energy storage start-up Energy Vault 19 | Expert view An update to a decades- old valve technology 20 | Market view Ensuring cybersecurity in the age of the internet of things 21 | View from the top Alex Louden, innovation manager, ORE Catapult 22 | Market view How can the market best meet the needs of microbusinesses? 23 | Market view Expanding the UK's electric vehicle charging infrastructure 25 Customers 25 | News 2,000 complain about Solarplicity in 2019 26 | Analysis Social media the do's, the don'ts and the opportunities 30 Community 31 | Disconnector GAS 19 | Expert view An update to a decades-old valve technology 22 | Market view Meeting the needs of microbusinesses? WATER 11 | News Renationalisation is key risk for UU 15 | News Ideas wanted to cut energy costs ELECTRICITY 20 | Market view Cybersecurity in the age of the internet of things 25 | News 'Involve EV drivers in charging schemes' ENERGY 6 | Interview Juliet Davenport, chief executive, Good Energy 11 | News Ofgem to consult on price cap removal 11 | News MPs launch carbon capture inquiry 12 | Event Telecoms systems in a DSO future 18 | High viz Cemex invests in storage start-up Energy Vault 23 | Market view Expanding the UK's electric vehicle charging infrastructure 26 | Analysis Social media the do's, the don'ts and the opportunities DOWNLOAD: Reducing bad debt, generating effi ciency and improving the customer journey https://bit.ly/2EbKRH5 See the Community section, page 30 If you are responsible for your company's outsourced or internal customer service centre we can deliver compelling cost savings to your business, with a typical rate for an FTE of just £10 per hour. Synergy operates an established Contact Centre in a modern and thriving part of Durban, South Africa employing experienced and highly educated staff. We already successfully work with a number of UK utilities across a range of services: If you would like to see our operation for yourself we can fly you, at our cost, to South Africa. Here we will give you a full tour of our facilities, a presentation on how we work and access to our professional teams. For further information please contact steve.cripwell@synergyoutsourcingltd.co.uk / 020 7932 4171 or toby.selves@synergyoutsourcingltd.co.uk / 020 7932 4116 Double your successful meter installation rate and halve your costs with MATS - the new Universal SMETS2 Commissioning Mobile App from Cloud KB. It works with all DCC 53 Million Smart Meters by 2020? YOU MUST BE QUACKERS! AN APPSOLUTE MUST Leader Suzanne Heneghan A long look at RIIO2 Energy networks are the masters of the long game, they have to be. Having an eye on the future is simply part of a network's DNA. So, while chief executives will not have been surprised by Ofgem's decision this week to stick to its December plans to cut returns under RIIO2, they will have been exasperated at what some see as an overreaction (see lead news story, p11). Yes, the cost of equity ƒ gure may have shi„ ed a little in their favour, up 0.3 on the mooted 4 per cent. But it still falls way short of their view of a fair return, at between 5.5 and 6.3 per cent, and even further o‹ the comparative 7 to 8 per cent allowed under the current price control'regime. As one network source I spoke to on Friday morning put it: "It's a little better. But it's absolutely nowhere near enough, given every- thing we are expected to do." From EVs and ˜ exibility on the electricity side, to delivering on what a growing consensus appears to see as the way forward for gas, namely hydrogen, network bosses have in-trays stu‹ ed full of massive challenges and work to do. Meanwhile the mood of the nation is building behind urgent action on climate change – with networks at the front and centre of the country's e‹ orts to meet its carbon targets. But the danger is that such low returns will lead to serious risk- aversion, to a tracking back on innovation and the key UK successes of the past decade, such as the achievements in local electricity generation and renewables. Instead, they could lead to a "no frills" dumbing down of the networks – at the precise moment they need to deliver real change. It's an unenviable job for the regulator. And while Ofgem's vision represents good progress on retaining some incentives, such as the totex sharing mechanism, networks will continue to make their case as they dra„ business plans to submit to challenge groups over the coming months. The news this price control could lead to £6 billion of savings for network customers over ƒ ve years will have gone down well with those consumer groups who berated "eye-watering returns". Yet failing to build su¢ cient risk into the cost of equity still feels like a short-term response at the expense of future customer ben- eƒ ts, such as fast-charging EVs, smart grids and decarbonisation. Because consumer interests stretch into the long term too. Suzanne Heneghan, acting editor, suzanneheneghan@fav-house.com

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