Utility Week

The Month in Review UTILITY WEEK | APRIL 2023 | 7 The Month in Review Michael Lewis to step down as Eon UK CEO Michael Lewis, chief execu- tive of Eon UK, is to leave the company aer almost three decades. Lewis, who took over Eon UK in 2017, will be appointed chief executive of German-based energy company Uniper, which was spun out of Eon in 2016 as a separate company to hold the company's fossil fuel generation assets. Eon has confirmed that Lewis will remain in post until his suc- cessor has been chosen. Lewis began work in the energy industry as an envi- ronmental specialist in 1995 at Powergen, before moving into renewable energy at Eon Climate and Renewables as managing director for Europe in 2007. He then became chief oper- ating officer in 2012 where he was responsible for global wind power development, construc- tion and operations. The Future Systems Operator could be overwhelmed by planning role The Future System Operator (FSO) risks being over- burdened with responsibility when it goes live in the next few years, a National Grid Electricity Distribu- tion (NGED) director has warned. Ben Godfrey was speaking following the publication of Ofgem's recent consultation, which proposed the creation of a series of regional system planners (RSPs) to coordinate the develop- ment of local energy system plans across Great Britain in collaboration with network operators and councils. The regulator said this role should be performed by a single independent entity with "multiple branches", identifying the FSO as the lead candidate. Godfrey, NGED's director of distribution system operator, told Utility Week his organisation had con- cerns about the FSO replicating planning functions that are within the remit of the existing network operators. He said: "Our main concern is about the opera- tional delivery of how we get the National Grid Elec- tricity System Operator (ESO), which is very, very competent at managing the electricity balancing system, and keeping everything in check, to being this FSO. It's a different entity, it's not quite been mobilised and what we don't want to do is burden it with a level and depth of responsibility. So we're very keen to see that the RSP grows in capability. "Clearly, there might be a greater and deeper role for it further down the line. But in the short term it really needs to focus on that higher level optimisation against gas and electric and transmis- sion and distribution, and not overly replicate the planning functions that are within the remit of the existing network operators." In the consultation, Ofgem said DNOs would remain responsible for network planning activities but these would need to be aligned with the regional energy system plans. Local authorities would likewise remain responsible for spatial planning. "It could be argued that having both existing actors and the RSPs undertaking 'planning' is a duplication – but we see a clear distinction," said Ofgem. "The existing actors plan for their own assets and within their own competencies. "We are proposing that the RSPs focus on their coordination and coherence: ensuring common starting points, facilitating dialogue and creating an independent strategic summary." Acknowledging this, Godfrey said: "Ofgem called that out, recognising the need for perhaps some limited but a very small amount of duplication. "We will really see that the networks need to retain a large part of the planning function. And really the RSP function should be about optimising the magnitude of investment across those different entities." Ofgem suggested in the same consultation that the FSO could also be tasked with facilitating the delivery of flexibility markets, saying both this and the regional planning role would have "strong synergies" with the FSO's national functions. Single social water tariff 'non-negotiable' Implementing a single social water tariff "ought to be non-negotiable", Lord Godfrey Cromwell of the Industry and Regulators Committee told Utility Week following the publication of the body's report into water regulation. The Affluent and the Effluent recom- mended government introduce a nationwide social tariff to address water poverty while allowing essential investment to go ahead. Cromwell said that not doing so would effectively force people into water poverty. "The alternative is to turn off people's taps and we can't do that," Cromwell said. " In a civilised society we have to be able to supply the vulnerable with water through a social tariff." Proposals for a single social tariff have gained widespread support during the last two years, however environment secretary Therese Coffey has dismissed the idea. Cromwell said the investment required to bring water infrastructure up to the nec- essary standards to meet social and envi- ronmental needs should be raised outside of price controls through equity and debt, rather than burdening customers. "Customers would be up in arms about why it's taken companies so long, and [asking why] don't they have the money already?" Following decades of successive govern- ments and regulators focusing on water supply to the detriment of the environ- ment, Cromwell said: "We need a long-term strategy, a joined-up approach across the regulators and given clear and prioritised objectives. "To date, they've prioritised water, they haven't given sufficient weight to the envi- ronment, which is changing, but they've got to do both." He said government has "given every appearance" of listening to recommenda- tions, but needs a forward-looking national strategy to avoid future water shortages. Cromwell said of Ofwat's announcement in March to change company licences that executive pay and bonuses was "only a tiny drop in the ocean of the problem really" and restricting bonuses was "hardly new or controversial". "The real issue is the massive scale of investment needed to put [things] right over time," he said. This includes the estimated £56 bil- lion set out on the storm overflows reduc- tion plan as well as spending for the Water Industry National Environment Plan. "Victorians faced with cholera had the vision, expertise and money to go out and do massive infrastructure projects we still use today. We need that sort of vision again."

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