Utility Week

The Month in Review Brearley Pinchbeck 6 | FEBRUARY 2023 | UTILITY WEEK "All too often the people finding it hardest to pay their bills are being forced on to a prepayment meter they can't afford to top up. This puts them at real risk of being left in cold, damp and dark homes." Dame Clare Moriarty, chief executive of Citizens Advice See PPM analysis, p20 The Month in Review C onservative MP Chris Skidmore has said evidence that companies are facing waits of up to a decade for grid connections is "shocking" and "absolutely mind blowing". Speaking as he launched his independ- ent review of net-zero delivery in January, the former energy minister said electricity network upgrades are key to wider efforts to decarbonise the energy system. "We can have these targets for giga- wattage outcomes but none of this is going to be a reality unless we look at what is an antiquated grid structure. "It was just shocking that we've seen peo- ple come to us in the review with evidence that grid connections won't be available until 2033. They want to get going now. It's just absolutely mind blowing that should be the reality. "They have to be unblocked", he said, pointing towards his review's support for Ofgem to have a net zero duty." The review also called on the government to make "significant progress" on rebalanc- ing electricity and gas bills before the latter's price drops back to pre-energy crisis levels. It said there should be a commitment to outline a clear approach to rebalancing gas and electricity prices by next April. Then Skidmore review calls for 'Big Bang' on net zero Just 0.7% of RO funds from failed retailers handed out Ofgem has only managed to redistribute £3.7 million in Renewables Obligation (RO) funds from failed energy suppliers in a period which saw half a billion pounds picked up by the rest of the market. Since 2016 the regulator has recovered late payments from just four suppliers overall, with the vast major- ity (£3.4 million) coming from GB Energy, which le˜ the market owing £7.1 million. Mutualisation was first triggered in 2018 and has occurred every year since. In total £527 million was owed by retailers, many of which have exited the market. Ofgem stressed that recovering funds from administrators was a lengthy and complicated process but that it expected to recover more missed pay- ments in due course. there should be "significant progress" on relative gas and electricity prices by the end of 2024. According to analysis conducted for the review, a gas price below 150p/therm marks a tipping point beyond which rebalancing of prices would make a difference in giving many more households an incentive to save when installing a heat pump. The report says recent Business, Energy And Industrial Strategy (BEIS) department fossil fuel price assumptions made avail- able to the review show that the price of gas is expected to drop towards 2019 levels by 2024. The government should use this reversion to a more normal energy market as a trigger to commit to significant progress on gas and electricity price rebalancing by the end of 2023, such as by stripping out environmental and social levies that currently apply to elec- tricity and not gas bills, the review says. If the gas price remains at a "clearly elevated threshold", this date could be pushed back to the end of the following year, it adds. The government should use the Review of Electricity Market Arrangements (REMA) to complete the rebalancing cost. Skidmore's 130 recommendations also included the urgent need to update Energy Performance Certificates (EPCs) to reflect the true cost of green technologies in the home. It said EPC ratings can "overestimate the cost of running a home with a heat pump due to outdated measures of heat pump efficiency and the history of gas prices being artificially lowered in comparison to electric- ity price". In his introduction to the report, Skid- more said its aim was to stimulate a "Big Bang moment" for net zero, "enabling and unleashing the potential of the whole of the UK" to seize the opportunities of net zero. David Blackman, policy correspondent £2,150 Estimated savings per household in 2022 if the government had moved faster on net zero, according to the ECIU.

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