Utility Week

UW October Digital edition

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

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Page 17 of 43

18 | OCTOBER 2020 | UTILITY WEEK Policy & Regulation Talking Points… "The management of a standalone UK ETS will require a signifi- cant amount of govern- ment intervention, and even then risks being dysfunctional, with a highly volatile price plagued by low levels of liquidity and high levels of speculation." Matthew Pennycook, Labour's shadow minister for climate change. "Water companies need to take their environmental obligations seriously and this impetus must come from the top." Rebecca Pow, environment minister, says there is too much damage to water courses despite water industry investment. "2050 might seem a long time away, but this is now a delivery challenge, and you can't start delivery until you've decided on your policy. So you need a strategy, then you can figure out your delivery programme." Sir John Armitt, chair of the National Infrastructure Committee. Quote, unquote The news in numbers: Climate Assembly UK members were asked about their support for differ- ent forms of gen- eration. Here is the breakdown for the sources members agreed or strongly agreed should be part of the path to net zero: Offshore wind: 95% Solar power: 81% Onshore wind: 78% Bioenergy: 40% Nuclear: 34% Fossil fuels with CCS: 22% Other headline statistics from the assembly's first report included: Support for a ban on sales of new gas boilers from 2030 or 2035 86% The UK should "quickly stop sell- ing the most pollut- ing vehicles" 86% The table is laid… but who's picking up the bill? A s we enter the final quarter of 2020 there is a sense that many in the utilities sector are straining at the leash to put into action what has been talked about for so long. I'm not just talking about the urgent need to make inroads on our decarbonisa- tion journey but also the desire to move forward on resilience, on strengthening and digitialsing ageing infrastructure and on empowering customers to play a more active role in the utilities eco-system. In many cases there is a well-documented frustration at regulatory or policy roadblocks. In energy, the white paper was still "imminent" when Utility Week went to press – as it has been for so many editions of this magazine. The implications of the Environment Bill for water companies equally lie in those crucial details. For both energy and water, landmark rulings await, in terms of Ofgem's further pronouncements on RIIO2 and the CMA's redetermination of the appealed PR19 business plans. One uncomfortable conversation underpins all of these issues and so many others – who foots the bill. The question of affordability was already a live issue for regulation even before Covid-19, with companies indignantly waving the results of their record stake- holder engagement as evidence that their customers favour investment in the future over a myopic focus on short-term bill cuts. In response, regulators and con- sumer bodies have continued to point to opportunities for efficiency which can deliver a better deal for consum- ers and still allow that investment. Post-Covid, the quandary of to what extent support for vulnerable customers is subsidised by the more afflu- ent will also increasingly come to the fore. For the net-zero journey, affordability is a conversa- tion the government just cannot duck. Loading more of the burden on to energy bills is regressive and ducks the hard truth of the cost of saving the planet. The time is right for a national conversation on how the UK will pay to ensure it has a green and future- proofed utilities system for the years to come. James Wallin, digital editor Comment: The government has presented utilities with an extravagant shopping list, but not the means to pay for it. "To deliver the pace of development and investment needed in the sector a hydrogen strategy is urgently needed." Philip Dunne, chair of Environmental Audit Committee.

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