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UTILITY WEEK | 12Th - 18Th SEpTEmbEr 2014 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 8 | Interview Ian peters, managing director, residential energy, british gas 12 | Special report Addressing the skills gap 15 Policy & Regulation 15 | News Lib Dems promise further carbon cuts 16 | Analysis Demystifying abstraction 16 | Market view Top tips for totex efficiency 19 Finance & Investment 19 | News SSE share price falls as 'Yes' vote pulls ahead 20 | Analysis What state is Gazprom in? 22 Operations & Assets 22 | High viz Dwr Cymru Welsh Water 24 | Market view Ensemble weather forecasting 25 | Expert view Suman Dasgupta, rolta 26 Customers 26 | News Smart meter savings 'dwarfed by costs' 27 | Market view putting energy into service 29 Markets & Trading 29 | Market view EU ETS reform plans poised for progress 30 Community 30 | Reader of the week Alexia Aling, senior consultant, customer advisory, EY 31 | Disconnector Are we heading for a utility death spiral? In the US, the New York State electricity regulator is conducting a wholesale review of the electricity market and its regulation to identify the reforms necessary to adapt to the paradigm shi of distributed energy. In doing so, it hopes to avoid what our cousins across the pond have dramatically dubbed the "utility death spiral": the process whereby traditional, centralised utilities will become increasingly outdated and irrelevant as customers capitalise on cheaper, greener and more efficient distributed energy. In the UK, we're still quibbling about whether smart meters are a worthwhile investment – see p26 for this week's comments from Public Accounts Committee chair Margaret Hodge questioning the value customers will receive from smart meters. There's a fundamental mismatch here, a failure on the part of the establishment (political and business) in this country to grasp the scale of the change ahead: the degree to which consumer behav- iour will change; the changing role electricity will play in everyday life; and the way our systems and processes need to change to accommodate that. A report from IPPR this week summarises a few of the dynamics at play: • solar costs are falling rapidly; solar energy will be as cheap as energy from the grid in the UK by 2020, according to Citibank. Wall Street brokerage firm Sanford C. Bernstein believes solar will "become so large that eventually there will be consequences everywhere". The cost of onshore wind power is also falling fast. • Europe's top 20 utilities have lost half their value in the past six years, and had their credit records downgraded; Citibank projects that distributed electricity technologies will lead to a halving in the size of the market open to utilities over the next two decades. You wouldn't guess that from any of the policies or discussions currently doing the rounds in the UK energy sector. Will Ed Miliband freeze prices in 2017? Can the DNOs save £400 million from the smart meter rollout? Will the Competition and Markets Authority order reform of the big six? These heated questions miss the point that a seismic shi is occurring globally in the way energy is generated and consumed. Politicians, regulators and business leaders need to stop looking two years ahead and start looking 20 years ahead. They may not like what they see. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 8 | Interview Ian peters, managing director, residential energy, british gas 20 | Analysis What state is Gazprom in? 28 | News mild autumn outlook caps gas price gains WATEr 15 | Analysis Demystifying abstraction 15 | market view Top tips for totex efficiency 22 | High viz Welsh Water ELECTrICITY 19 | News Takeover bids expected after pr14 24 | Market view The benefits of Ensemble weather forecasting 28 | News EU ETS reform plans poised for progress EnErGY 14 | News Lib Dems promise further carbon cuts 19 | News SSE share price falls as 'Yes' vote pulls ahead 21 | Investor View martin brough 27 | Market view putting energy into service 23 | Pipe up Denise massey 26 | News Smart meter savings 'dwarfed by costs' Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Smartest Energy: Energy Entrepreneurs Report http://bit.ly/1kzddrn IBM: Smarter Asset Management http://bit.ly/Xx7myx