Utility Week

8 | MARCH 2021 | UTILITY WEEK The top stories… Water Electricity Energy What has happened Ofwat announced at the start of February that chief executive Rachel Fletcher was stepping down to join Octopus Energy as director of regulation and economics. Fletcher took up the position at the water regulator in 2018 and previously spent 15 years at Ofgem. David Black, chief regulation officer at Ofwat, will assume the role of chief executive on an interim basis from 1 April. It comes as the regulator awaits the outcome of the Competition and Markets Authority (CMA's) redeterminations of the business plans of four water companies which appealed Ofwat's PR19 final determi- nations (see p24). What has happened Concern is mounting over the stuttering roll- out of the Green Homes Grant (GHG), which at the time of going to press had resulted in just 20,000 vouchers being issued, five months on from its launch. With a target of 600,000 to hit by March 2021, the government is under pressure to reform the programme to make it easier for both installers and the public to get on board. There has also been widespread criticism of the decision by the Department for Busi- ness, Energy and Industrial Strategy (BEIS) not to roll underspend in the £2 billion first year of the programme beyond March. As of What has happened The energy regulator has recommended the full separation of the electricity system operator (ESO) from National Grid. The ESO became a legally separate body from National Grid in 2019 but the debate over its future ownership structure has continued. Following a review, Ofgem concluded that key gas network planning functions should also be hived off, to create a new independent energy system operator. It envisages this new system operator having additional responsibilities, includ- ing taking a more active role in designing new grid infrastructure and advising gov- ernment on the costs and trade-offs of dif- ferent low-carbon pathways. It stresses that to achieve this neutrality the body must be free from "potentially distortive commercial interests in energy assets". What they said Colm Gibson, Berkley Research Group: "It requires a lot of expertise to run an energy grid and if you start splitting things up you start splitting that knowledge. All of Rachel Fletcher swaps Ofwat for Octopus Ofgem calls for full ESO separation Fletcher's move coincides with the scheduled departure of Ofwat's long-serving chair, Jonson Cox Take up of GHG programme has been dismal Green Homes Grant progressing at snail's pace the expertise that moves into the ISO is no longer available to National Grid and all of the expertise that remains in National Grid is not available to the ISO." Richard Nourse, managing director, Greencoat Capital: "We need to be able to have people we can completely trust to fear- lessly make the right decisions for us based on the evidence as they see it." What this means The full separation of the ESO from National Grid has long been considered "unfinished the end of January, only £73 million of that total had been claimed. A coalition of trade bodies representing installers issued their own suggestions for speeding up the programme in mid-Febru- ary. Their key asks include a commitment to rolling over the underspend and a rapid acceleration of payments and processing of vouchers to address urgent cash flow con- cerns for installers and increase the pace of work for consumers. They also want to see the administration of the scheme over- hauled, suggesting a leading role for the Microgeneration Certification Scheme, which is considered to have the expertise and exist-

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