UTILITY WEEK | MARCH 2022 |
5
KNOWLEDGE WORTH KEEPING
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There's no quick fi x
tothe energy crisis
This month's magazine is once again dominated by the cost of living crisis and
the response by Ofgem and the government.
There was fevered speculation in the lead-up to the price cap announcement
as to what support, if any, would come from government.
In the end, the almost £700 increase in the cap, to come into e• ect in April,
came wrapped in the protective bubble of a £9 billion package of measures from
the Treasury (see Review, p6 for details). These were welcome interventions,
and will go some way to alleviating the pressure on those most a• ected by bill
pressures. But, as our Energy Reset analysis on pages 12 to 15 asks, is it actually
enough?
As our coverage has been at pains to point out over the past few months, one
of the surest ways to protect consumers from further bill shocks is to address the
underlying issues in the retail market.
However, what is becoming clear is that this reform cannot be done in isola-
tion and while there are many glaring problems with the structure of the retail
market, it needs to change in tandem with the entire energy system and our
approach to net zero.
This will require some diˆ cult but necessary conversations around the
energy transition and the acceptance that this will not be achieved solely by
an exit from fossil fuel generation. Energy storage, Š exibility and a diverse mix
of low-carbon generation sources are all equally important parts of the jigsaw.
Meanwhile, the turbulence of the past year has shown a clear need to reform
wholesale markets, while sector leaders are increasingly talking to us about the
need to "de-politicise" energy, a theme that John Penrose MP picks up in this
month's big interview (see p8).
But is the political will really there to tackle something so " endishly com-
plicated and unglamourous? The current administration deserves credit for
its vocal support for net zero and the ambitious targets it has committed the
country to, but there is a real need to open up the conversation to explore the
practical steps that will need to be taken over the coming decades. And, at the
risk of becoming repetitive in these columns, the cost.
Dodging this risks ceding the debate to those who are sceptical of the net zero
journey, or at least on the balance of spending now compared to some unspeci-
" ed point in the future. The growing prominence of the Net Zero Scrutiny Group,
which has linked the cost of living crisis to green policies, and the increasing
scepticism of the right-wing press to almost any decarbonisation tool, should not
necessarily be viewed with alarm but is should certainly be noted.
Clearly there are no quick " xes to the cost of living crisis or to energy market
reform. But we cannot keep kicking the can down the road forever.
James Wallin, editor, jameswallin@fav-house.com
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Idox
Next-day switching piles pressure
on utility address management
https://bit.ly/3uXGKJy
Evides
Water – A Key Consideration in
Achieving Net Zero 2050
https://bit.ly/34H9Geo
Letter from the Editor
James Wallin
DTN
Explore your expected winter risks
with an outlook from DTN
https://bit.ly/30W7kGk
