Utility Week

UTILITY WEEK | MAY 2021 | 21 Policy & Regulation and delivering, risk would be progressively assessed through di erent metrics of suita- bility and companies would be driven to con- tinually improve. It's so strange that insuring for risk is almost non-existent in the energy sector." Moving towards risk-based regulation, says Sandys, would allow more business models to come through and re• ect the changing nature of energy consumption and consumer preferences. 'Heavy-handed' regulation Last year Bristol Energy followed its fel- low municipal-owned supplier Robin Hood Energy and le€ the market. For Welby, his experience as head of regulation at Bristol highlights how "heavy-handed" regulation can sti• e innovation. "At Bristol Energy, a number of innova- tion projects and projects to improve cus- tomer experience were curtailed because our ‡ nite resources had to go into changing things to meet new regulations. It just gets in the way. So e ectively every time Ofgem says we need to change this regulation, then resource has to go into that rather than try- ing to improve the business and make our- selves more attractive to customers," he says. However, Paul Massara, former Npower chief executive, believes rather than sti- • ing creativity, the regulatory landscape has allowed newer entrants to come in and • ourish. He says: "Ofgem has encouraged innova- tion via the Sandbox and also via allowing [network] companies an innovation allow- ance. This has stimulated innovation and helped create a positive culture to work with smaller companies. There is still a long way to go on this, but it has been a helpful intervention." Ofgem itself is keen to stress that it is working with industry and government to create regulation that stays ahead of market developments and does not distort them. Anna Rossington, interim director of retail at Ofgem, says the regulator is working to deliver net zero at lowest cost, stamp out bad practice and to ensure fair treatment for all consumers. She adds: "The retail energy market is undergoing far-reaching and excit- ing changes in Great Britain. "Our regulation needs to stay ahead of market developments in a way that does not distort them. It must enable diverse approaches so we can foster more competi- tion and innovation and support new market participants, while o ering e ective protec- tion to all consumers.: Adam John, reporter Comment Mark Horsley Chief executive, Northern Gas Networks L ike many public-facing, service- driven organisations, NGN sets great store by listening to what our customers tell us. Over the years, we've created and ‡ ne-tuned various opportunities for customers to have their say. And now we have the results from one of the ‡ rst pieces of original research with our customers into public attitudes to net zero, and how these attitudes have been impacted by the ongoing Covid-19 outbreak. We commissioned the research from YouGov because we wanted to see net zero through the prism of the pandemic; the roadmap towards the target is becoming more de‡ ned, and while COP26 will certainly focus minds, the way forward is still fraught with challenge. The research revealed some sur- prising ‡ ndings, and ones that I will certainly take on board as NGN and our partner organisations continue to in• uence the decarbonisation agenda. So, despite the pandemic, and pos- sibly because of it, climate change is still very much at the forefront of peo- ple's minds: in our nationwide poll, 73 per cent of people said they were as concerned, or even more concerned, about the environment as they were before the pandemic. More 18 to 24-year-olds polled wanted the government to prioritise unlocking investment in green energy rather than job creation. This is signi‡ - cant when you consider the negative impact Covid-19 is having on the labour market that many in this age group will now be entering. And where respondents were asked to think about a time beyond the pandemic, 48 per cent said they saw a lack of commitment from busi- ness and industry as a barrier to an e ective response to climate change; a higher number than those who said that a lack of government commitment to making policy decisions was the greatest cause for concern. For us in the energy sector, the gauntlet has been thrown down. We can't expect government alone to educate the public about cleaner energy alternatives and make a com- pelling case for the fuels of the future, such as hydrogen. The onus also rests on us in the gas industry. The YouGov research also sug- gests that the public are receptive to hydrogen as a future fuel: 44 per cent of those polled said they believe the strongest bene‡ t of hydrogen is that it has the potential to be a cleaner alternative to fossil fuels. The recent launch of our crowd- funded green transition bonds, giving businesses and individuals the oppor- tunity to invest in a hydrogen-ready energy network for the ‡ rst time, saw a take-up of 25 per cent by the end of day one: again suggesting that our customers have a passion for achiev- ing net zero. However, for a signi‡ cant num- ber of YouGov survey respondents, they simply don't know enough about hydrogen to have an informed opinion. So I'm calling on industry to do more to get our customers to that informed position, and to bring them with us on the journey. Gas suppliers already have a high level of recognition with their customers and a ready-made platform to begin the conversation. But the gas distribution networks, including NGN, also have a part to play: building public con‡ dence around the safety and reliability of hydrogen; providing reassurance around appliances and any future costs for customers, and lobbying government for transforma- tive investment in a ordable and hydrogen-ready appliances. As a sector, we must be proactive, giving our customers clear messaging. At NGN, we're starting to communicate with our customers about green energy and hydrogen, and to listen to what they're saying. But it's just the beginning of a conversation that's timely and necessary as we move towards COP26, and ultimately 2050. 'Take your customers with you on the net-zero journey' 'Take your customers

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