Utility Week

UTILITY WEEK | FEBRUARY 2021 | 7 The Month in Review "If you've got transparency on DSO decision-making then you don't need to separate the DSO from the DNO financial structure. But there's quite a lot of work for the industry to do to demonstrate that this can happen." Peter Emery, CEO, Electricity North West. Emery talks about RIIO2, alongside other leading industry figures, p18-20 Ovo reports £106m loss' Ovo Group made a £106 million loss for the year ending 31 December 2019, its latest financial results show. The latest figure compares to a £41 million loss reported in 2018. The company, parent of Ovo Energy, closed the year having reached £1.4 billion in revenue – a £400 million increase from the previous year. It achieved a 56 per cent year-on-year increase in gross profit to £146 million (up from £94 million in 2018). Of the loss, almost £64 million was by Ovo Energy, which was shown to have made up £1.1 billion of the group's revenue. Last year the disruptor brand made a £45 million loss. Ovo Energy has grown rapidly in recent years. With the acquisition of the 290,000 customers of Spark and 360,000 from Economy Energy, the company grew by 50 per cent between November 2018 and January 2019. In September 2019 it expanded further with the £500 million acquisition of SSE Energy Ser- vices, although the deal did not complete until the following January. By the end of 2019, the company had a 4 per cent share of the market with 1.3 million customers. As a result of the acquisitions, by Q1 2020 the supplier had a market share of more than 15 per cent with around five million customers. Ovo also outlined its progress on hitting its 2030 target of net zero emissions as part of its ambitious Plan Zero commitment. Read more here https://utilityweek.co.uk/ ovo-updates-on-plan-zero/ Water innovation competition kicks off The much-anticipated innovation com- petition from Ofwat began on 18 January with the £2 million Innovation in Water Challenge. The first round of the Dragon's Den-style contest is designed to encourage partici- pation from the supply chain and smaller research and development or innovation companies. The competition is part of the £200 mil- lion fund the regulator created as part of PR19. Run by Ofwat, together with Nesta Chal- lenges, Arup and Isle Utilities, the compe- tition will promote collaborative problem solving for shared challenges faced by the water sector, now and in the future. It aims to encourage innovative ideas that water companies would otherwise be unable to invest in or explore by working with partners inside and outside the sec- tor. Each wining partnership will receive between £50,000 and £250,000. See John Russell article, p32-33 6.6% Pure electric vehicles share of the market in 2020, up from 1.6 per cent the year before £30k Maximum amount that could be written off under proposed changes to debt relief orders, up from £20,000 under the current system Kwarteng defends plans for decarbonisation of power sector Kwasi Kwarteng has said the government will legislate this summer to adopt a target to cut emissions to nearly 80 per cent on their 1990 level within the next 15 years. Giving evidence to the House of Com- mons Business, Energy And Industrial Strat- egy (BEIS) Committee, he said legislation will put into law the targets the targets outlined in the Climate Change Committee (CCC)'s sixth carbon budget, which was published in the run-up to Christmas. The CCC recommended in this report that UK emissions should be cut to 78 per cent of 1990 levels by 2035. This is nearly as much as the UK's previ- ous 2050 target of 80 per cent, which was in place until parliament adopted its net zero goal two years ago. The new target will be implemented via secondary legislation. While acknowledging that the UK is not currently on track to meet this target, Kwarteng said that recently announced poli- cies in the prime minister's 10-point green recovery plan will bridge the gap with the aspirations in the sixth carbon budget. The newly promoted business secretary was also quizzed on whether the govern- ment's target to decarbonise the power sector by 2050 was insufficiently ambitious. The CCC report recommended that the power sector should be net zero carbon by 2035. He said the 2050 goal is "certainly achievable" and that a "realistic target" is necessary in order to ensure that consumers are protected from price hikes. "We feel 2050 is about right," he said, adding that the emergence of new technolo- gies may mean that the pace of decarbonisa- tion may be more rapid. Kwarteng, who was appointed secretary of state for BEIS in early January following the departure of his predecessor Alok Sharma to concentrate on the presidency of the UN COP26 climate summit, also reaffirmed his commitment to marine and tidal renewable technologies. He told the committee he was "very keen" to promote tidal and marine technolo- gies in the contracts for difference (CfD) auc- tion process at the end of this year. He also defended the government's con- tinuing commitment to nuclear power. Energy White Paper analysis, p14

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