Utility Week

The Month in Review Brearley Pinchbeck 6 | SEPTEMBER 2022 | UTILITY WEEK "This is further proof that the government is asleep at the wheel when it comes to the energy bills crisis. In no other country have 32 energy suppliers gone bust. It is intolerable that the Conservatives oppose Labour's plan to freeze energy bills this winter." Shadow climate secretary Ed Milliband in response to Ofgem director Christine Farnish's resignation. The Month in Review A n Ofgem director has resigned in protest over the regulator's decision to allow suppliers to recover wholesale energy costs over a shorter period. Christine Farnish, who joined Ofgem in January 2016 as a non-executive director, said in an interview with The Times that she believed the move "would add several hundred pounds to everyone's bill in order to support a number of suppliers in the coming months" and that she did not believe Ofgem had "struck the right balance between the interests of consumers and the interests of suppliers". "I resigned from the Ofgem board because I could not support a key decision to recover additional supplier costs from consumer bills this winter," she said. Ofgem revealed earlier this month that it was allowing suppliers to recover exceptional backwardation costs over a period of six months, rather than 12 months as originally proposed. Following this, Investec analyst Martin Young calculated that overall backwardation costs will be around £296 per dual fuel customer over the coming winter, adding that Ofgem's decision would have "a material impact" on the level of the cap, particularly in January 2023. Young subsequently revised his calculation for the price cap to more than £3,500 in October and £4,200 in January. Confirming Farnish's departure, an Ofgem spokesperson said the regulator was "having to make some incredibly difficult decisions where carefully balanced trade- offs are being weighed up all the time". "But we always prioritise consumers' needs both in the immediate and long term," they added. "The rest of the board decided a shorter recovery period for energy costs was in the Ofgem director resigns over price cap changes ENA looks to improve flexibility markets The Energy Networks Asso- ciation (ENA) has issued its annual consultation on the development of flexibility markets as part of its Open Networks projects. Since the programme was launched in 2017, the trade body said the Open Networks project has helped to simplify and standardise flexibility markets, enabling distribution network opera- tors (DNOs) to hold tenders for at least 3.6GW of flexibility for 2021/22. The ENA said its latest consultation would seek to build on this previous work and take flexibility markets and the processes that under- pin them to full maturity. It said the consultation would look to ensure the frame- works of these markets, in particular the governance arrangements that networks operate within, are correct. Dr Avinash Aithal, techni- cal lead for Open Networks at the ENA, said: "We want to hear from as many people and organisations as possible so we can continue to deliver the smart, flexible system essential to achieving net zero at least cost." The deadline for responses is 12 September. To read more on this story, go to: https://utilityweek.co.uk/ ena-consults-on-improve- ments-to-flexibility-markets/ best interest of consumers in the long term by reducing the very real risk of suppliers going bust, which would heap yet more costs on to bills and add unnecessary worry and concern at an already very difficult time." With the price cap forecast to increase to previously unimaginable levels over the coming months, there has been growing frustration within the sector over the lack of an announcement from government to alleviate the impact of soaring energy costs on consumers. Adam John, senior reporter

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