Utility Week

UTILITY Week 2nd May 2014

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UtILIty WEEK | 2nd - 8th May 2014 | 5 "It makes no sense" In a submission to Brussels, the Environmental Audit Committee rubbished the government's insistence that Hinkley Point C is not being subsidised. The Mayor of London has taken another step towards setting up the capital's "smallest energy supplier" by asking companies to submit proposals to provide back office support. Boris Johnson expects the Greater London Authority (GLA) to be granted a new type of supply licence – the licence lite – which would allow it to buy and sell electricity. The mayor aims to be supplying electricity by 2015 and has invited com- panies to come forward with proposals to run the back office services for the GLA electricity supply company. This move follows the initial applica- tion to Ofgem for a licence lite, which was made in March 2013. The GLA energy company will initially buy renewable electricity generated by facilities owned by public bodies and London boroughs, paying them a 30 per cent premium on the tariff available from energy suppliers. This electricity can then be sold on at cost price to other public organisations, including Transport for London. If the scheme proves successful, the mayor plans to extend it to private sector renewable generators as well. It is hoped the licence lite will "unlock" up to £300 million-worth of investment in 22 new heat and power projects, while in the longer term generate more than £8 billion of investment over 11 years. Johnson said: "Nurturing a new crop of small, low carbon energy producers across the capital is the key to a more secure, cost-effective and sustainable energy supply for us all." Energy secretary Ed Davey called it "a significant development". Pan-UtILIty The National Trust has set up a renewable energy trading business to help fund its conservation projects. The charity's first large-scale renewables project, a hydro scheme on the side of Mount Snowdon, will sell electricity through National Trust (Renewable Energy) Ltd, with the money raised set to be invested back into conservation projects, such as footpath repairs and habitat management. Plugged in Smart metering – what's in it for suppliers? (blog linked to Utility Week LinkedIn group) Imagine you're CEO of a major energy company and the government is forcing you to spend millions on the smart meter rollout. What might the benefits be for you and your business? In 1993, Sir Terry Leahy introduced the Tesco Clubcard, which revolutionised the supermarket and greater retail industry forever. Now, as you stand in the shoes of a CEO of one of the big six energy companies, you realise that smart metering is the Clubcard for your industry. Not only will you collect real-time data on your customers, eventually you will be able to break down when and how they're using their energy. Andrew Mealey, senior consultant (utilities) at Advanced Resource Managers Feedback: Interesting thoughts Andrew and good to put a positive spin on things – but the analogy is not quite as simple as the Tesco Clubcard. First, every company has access to the same scope of data so the CEO will find it harder to derive an advantage – Tesco acquired new data and did not have to share it. Second, as most people buy energy on cost, there is a competitive advantage in the early years of doing the least amount of work – by spending the least the CEO will have a cost advantage. Third, to deliver the ben- efits you are reliant on third parties – Tesco has control over most of its supply chain. I am sceptical of the benefits to customers or sup- pliers in the short to medium term, especially as the largest part of most households bill is gas and the advantages are even less easy to find with this fuel. Richard Jemmett, managing partner at OneToRemember LLP Join the discussion with Utility Week's LinkedIn group, Utility Week networking and news London's licence-lite energy supplier moves a step closer £1.8bn the amount energy suppliers could save following changes to energy efficiency scheme Eco and lower than expected costs, according to a solid wall insula- tion trade body.

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