Utility Week

UTILITY Week 11th July 2014

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UTILITY WEEK | 11Th - 17Th JULY 2014 | 11 Policy & Regulation This week Level playing field is key, says Open Water Water firms must ensure they do not discrimi- nate against competitors when market opens Establishing a level playing field for the non-domestic water market when it opens in April 2017 is paramount, according to the latest document from market architect Open Water, published last week. Water companies must be careful when setting wholesale tariffs, because they could "inad- vertently offer opportunities for cherry-picking, or open themselves up to accusations of market squeeze", said the latest iteration of the market architecture plan, first published in January. Open Water emphasised that company boards would be held responsible for ensuring market entrants and out-of-area retailers were able to compete on fair terms with their own retail arms. The degree of formal separa- tion required to achieve this is le up to each company, although the document does suggest that a compliance officer role would help the assurance process. The report said: "Boards will need to make the right decisions for their companies based on their assessment of both the current and continuing costs and benefits of increased separation in their governance arrangements and increased transparency in how they interact with their own retail activity." It acknowledged: "Some companies may consider that it is better that they pursue the option of exiting the non-household retail market." The next iteration of the market architecture plan will be published in the autumn. The latest version can be read at www.open-water.org.uk. EB NUcLEar Small nuclear 'held back by licensing' The deployment of small nuclear reactors is being held up by the licensing process, and not by issues with the technology, MPs were told this week. The Energy and Climate Change Committee (ECCC) heard that the time it takes for reactors to be approved, and the consideration of non-technology processes, was delaying the deployment of small modular reactors (SMRs). Bill Fox, chief executive of US firm Generation mPower, told the committee it would be "advantageous" to set different licensing criteria for SMRs than for large reactors. He said: "They are different and there are a number of safety case analyses required on a large reactor that are not required on an SMR." ELEcTrIcITY Decc defends award of early CfDs The early contracts for difference (CfDs) awarded to eight renew- able energy projects were neces- sary to bring forward a competi- tive electricity generation market, according to officials from Decc. Giving evidence to the Public Accounts Committee (PAC), Decc officials were responding to a report from the National Audit Office which criticised the department for failing to tender the contracts. Contracts worth £16.6 billion were awarded under the Final Investment Decision Enabling for Renewables scheme, commit- ting 58 per cent of Decc's budget for renewables under the Levy Control Framework until 2021. However, Stephen Lovegrove, permanent secretary at Decc, told MPs the contracts would bring down the costs of renew- able technologies and help to create a competitive generation market. ELEcTrIcITY National Grid set to net £5m for EMR National Grid Electricity Transmission (NGET) is set to receive £5 million in provisional allowances for its role as the Electricity Market Reform (EMR) delivery body. NGET is expected to be appointed to the role in August, and will be given the provi- sion allowances for the first 20 months of operation (1 August 2014 to 31 March 2016), pro- vided it meets the timetable for submitting its full EMR business plan. Ofgem said it would take the "unusual" step of providing provisional allowances ahead of seeing a business plan to sup- port the "smooth introduction of EMR". Companies warned over wholesale pricing Political Agenda Mathew Beech "The Green Party could tempt the Lib Dem core" The political big three are getting it in the neck: the Tories are fighting off UKIP; Labour too is suffering at the hands of Nigel Farage, while also battling Ed Miliband's image problem; and the Lib Dems are staring down the barrel of political annihila- tion come polling day in May. Nick Clegg's cronies are now part of the political establish- ment so oen despised by the electorate. Their promise of being different to the blue and red camps in Westminster has card that oen drew voters towards Clegg's party – they are not mainstream. The Lib Dems, having spent the best part of five years within government, are now the very thing they used to oppose and be the alternative to. They are also tainted by their association with the Tories. The Greens, especially with energy high on the agenda, could make significant inroads, tempt- ing the Lib Dem core to a new, but strangely familiar position. been lost – and with it large swathes of their support. Even the core Lib Dem vote is under attack, this time from the UKIP of the le: the Green Party. The Greens have everything the Lib Dems used to offer. They are pro-renewables, whereas the Lib Dem energy secretary Ed Davey is presiding over a department keen to cut support for onshore wind and large-scale solar – to much protestation. The Greens oppose nuclear power – something the Lib Dems were proud to oppose as well, before Davey led his party across that line last year. Natalie Bennett, leader of the Green Party, even has the trump

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