Utility Week

UTILITY WEEK | 14TH - 20TH FEBRUARY 2020 | 3 This week 4 | Seven days 6 | Utility of the Future The scale of the skills gap, and some suggestions about how to address it 12 Policy & Regulation 12 | News Energy fi rms laud Ofgem's net zero plan 15 | Chief executive's view David Smith, Energy Networks Association 16 | Opinion Colm Gibson, managing director, BRG 17 | Analysis Is Boris Johnson serious about net zero? 18 | Interview Sir Ian Byatt gives his verdict on Ofwat 19 | View from the Top Sharon Darcy of Sustainability First sets a course for net zero 20 Finance & Investment 20 | News Energy UK: use taxes to pay for effi ciency 22 | Market view Power and utilities M&As decline in 2019 25 Operations & Assets 25 | Market view System fl exibility is key to decarbonisation 26 | Event A full report on the Paying for Net Zero debate 29 Customers 29 | News Scot Water: bills must rise to fund resilience 30 Community 31 | Disconnector Leader Suzanne Heneghan The wait is over: it's pistols at dawn Before this week, there had been growing tension and speculation in the water sector as the deadline loomed for companies to throw out their PR19 nal determinations and refer their settlements to the Competition and Markets Authority (CMA). In the end it was Yorkshire Water that reached for the trigger, days ahead of the nal cut-o€ date for CMA referrals – perhaps in the hope of ƒ ushing out comrades in arms among its fellow water companies. By the time you are reading this, others may well have taken a stand. While Yorkshire's move is no great surprise given the well-trailed discontent in the water sector with the stringent dra† determinations set out by Ofwat in December, it is nonetheless big news. It's the rst time we've seen one the sector's big companies challenge their regula- tory settlement – to date, it's only been water-only company Bristol that has battled to change its determination, in both PR09 and PR14. As our story (see p4) reveals, Yorkshire believes the settlement as it stands leaves it unable to fund the investment it needs to make to deliver the service its customers want. While its public statement doesn't give too much detail away, it points to "poorly designed penalty measures over the next ve years", concluding that "the long-term risks to its resilience and customers would be at a level which it cannot accept". Yorkshire's outcome delivery incentives (ODIs), such as leakage reduction and ƒ ooding targets, are undoubtedly challenging – although its nal deal is not the worst in the industry. To some Utility Week industry sources, the appeal feels more like a bid to draw a line in the sand on the current direction of travel than an attempt to signi cantly shi† the dial on Yorkshire's settlement. Observers said it's an "enough is enough" statement from a leading player in an industry that has become embattled in a regulatory crackdown in recent years. If so, however, it will be an expensive statement of principle – not only in legal fees but also executive time. There's also a potential cost in reputation at stake. Of course, if Yorkshire wins, it will do its credit rating no harm at all. If it loses, then less so. There's no doubt the decision to go to the CMA is not one that will have been taken lightly by Yorkshire's board, nor the company's relatively new CEO and ex- nance director Liz Barber. What happens next will be fascinating to watch. (Sir Ian Byatt give his verdict on Ofwat, p18) Suzanne Heneghan, editor, suzanneheneghan@fav-house.com COVER STORY 6 | Utility of the Future Finding the right people to fi ll the skills gap ANALYSIS 17 | Will decarbonisation be part of the revolution? MARKET VIEW 22 | Why utility deals were down last year EVENT 26 | Is there a fair way to pay for decarbonisation? Mando: Improving experiences for vulnerable customers https://bit.ly/361toNK 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 BASEC: DNOs need tried and tested cabling systems they can rely on https://bit.ly/33WYzYv https://bit.ly/33WYzYv

• Cover