Utility Week

UTILITY WEEK | JANUARY 2021 | 13 Policy & Regulation Talking Points… Ofgem's fi nally listening Opinion Maxine Frerk Former Ofgem executive W hile the companies will take their time to work through the detail of the nal determinations, and in particular the scale of the e ciency challenge and the cost of capital, stakeholders will gen- erally be pleased that a er dra determinations it does nally feel like Ofgem is listening. Akshay Kaul, Ofgem's networks director, has argued that the Consumer Engagement Groups (CEGs) and other groups' input was highly valued and that the problem was simply that they didn't write an essay in dra determinations on how it had shaped their thinking – which they have done in nal determinations. But I think it runs deeper than that. Ofgem has now responded – and there is much to welcome in the nal determi- nations – but perhaps if it had been listening more, earlier, it might have had time to tackle some of the knottier issues that remain unresolved. For vulnerable customers, Ofgem has moved to do more, in particular given the impacts of Covid. It has doubled the use-it- or-lose-it pot so that £60 million will be available to support vulnerable customers. It has also broadened the scope of support that can be provided (eg to include boiler repairs/replacements in certain cases) and agreed an additional bespoke Cadent initiative in this area. That is all excellent news. However, there is still the niggling question of energy e ciency, which Ofgem says cannot be funded. Unlike in electricity where demand-side measures are all the rage to avoid reinforcement, it doesn't seem to have made it on to Ofgem's radar for gas despite stakeholders arguing that it has a synergy with the GDNs' role and that – as we all know – it is crucial to achievement of our net zero targets. Funding will still be provided for fuel poor network extensions encouraging the continued uptake of gas for heating and with no expectation that energy e ciency will be improved in parallel. On net zero, Ofgem has moved in response to pressure from some user groups and environment groups, and this is to be welcomed. However, there is no overall sense that Ofgem has gone far or fast enough in its nal deter- mination when viewed against the net zero pathways from the Future Energy Scenarios – or those just produced by the Committee on Climate Change (CCC). Ofgem's Impact Assess- ment sets out the bill impact of its decision but not the carbon impact. And the proof of the pudding will be in the eating when it comes to whether Ofgem can be agile and pragmatic in dealing with the plethora of new uncertainty mechanisms it has put in place. To see the rest of this article, go to: https://utilityweek.co.uk/ ofgems- nally-listening/ Ofgem's fi nally The news in numbers: The Green Homes Grant An online poll, carried out in mid- November by the House of Commons environment audit committee and Money Savings Expert found: 75% found it "di• cult" to • nd a contractor registered with TrustMark to carry out works. 5.6% had received a voucher for energy e• ciency measures to be installed. 1 person had actually had work completed a‚ er receiving a voucher. 57% found the GHG eligibility calculator helpful. 3 Members of the Federation of Master Builders were accredited to take part in the scheme out of 180 who registered an interest. What will the water sector look like in 2040 and how will it get there? These are the questions posed by Ofwat as it starts to design the framework for the next price review. The regulator, which previously hinted that nature-based solutions and greater consumer engagement will be required at PR24, has launched a forum for stakeholders to suggest how the sector should evolve over the next two decades. Ofwat has identi ed four challenges for PR24, building on the goals the sec- tor worked towards in previous reviews. These are: • Protecting and improving the envi- ronment in the context of climate change; • Achieving public con dence and aŸ ordability in the face of cost pressures; • Innovating and collaborating to transform performance for customers; • Anticipating and adapting to uncer- tainty and change; For more on Ofwat's review, see: https://utilityweek.co.uk/ofwat- consults-on-the-water-sector-of-the- future-to-inform-pr24/ WATER Ofwat consults on the water sector of the future to inform PR24 ON THE MOVE BEIS director of clean growth quits for institute role The Department for Business, Energy and Industrial Strategy (BEIS)'s director of clean growth is leaving to take a new role working with Tony Blair. Utility Week has learnt that Tim Lord, who currently leads BEIS' work on delivering emissions reduction and the transition to a low-carbon economy, is quitting the government to head a new sustainable development unit at the former prime minister's Institute for Global Change. Lord will be replaced by fellow BEIS o• cial Chris Thompson, who is currently director of labour markets. Lord: leaving BEIS

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