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Utility Week 5th June 2015

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8 | 5TH - 11TH JUNE 2015 | UTILITY WEEK Interview that from Westminster," Slade explains. "Equally, it's not just a generation issue. We know that there are devolved aspects of energy efficiency already. A lot of our mem- bers are obligated to deliver that and have sig- nificant customer bases in Scotland. We have to cover all of those grounds and be effective." Is there scope for Wales to receive the same treatment? Slade says it would be "a logical progression" and points out that the Silk Commission has already made provision for devolved planning powers in Wales for generation projects of up to 350MW. Beyond reaching out for key political party and regional engagement in developing energy policy, Slade is also acutely aware of the need to look across govern- ment departments' stakeholder groups and seek out areas of common purpose with other long-term strategy developments. One key area that he hopes will receive more atten- tion in the coming months and years is the alignment of energy and industrial strategy. "As much as we have to make sure that we're doing the right thing by domestic customers, let's make sure that we're talking to energy-intensive users. Let's make sure we are talking to businesses. "This doesn't always come through enough," says Slade. "It's important that, from a country point of view, we look at how we are supporting our industrial users, how we are maintaining the competitiveness of the country compared to our international competitors – it seems logical. There are challenges to achieving it, but it doesn't mean it shouldn't be looked at." In the meantime, while these long-term ambitions are nurtured, the UK energy industry has myriad more immediate challenges to deal with – including absorbing the outcomes of the CMA inquiry and pushing forward with the national rollout of smart meters. With the preliminary findings of the CMA inquiry into the energy market potentially ready by the end of this month, companies will be preparing a range of possible responses. But while Energy UK has deliberately taken a step back from the CMA's discussions with "the very firm view" that they "are for the industry – not the trade asso- ciation", Slade is anxious that the sector should avoid falling over itself in responding to the inquiry's first thoughts. "I don't think it would be appropriate, whatever it comes out with, to rush into early remedies," he says. "Let's have a sensible debate around the issues, let's see what they come up with, what they find, work them through. But ultimately, it's the final remedies that they come out with at the end of the year [that count]." Not that Slade advocates standing still while the inquiry takes place – indeed, he believes that reinvig- orated market forces would never allow this. "This is a market which is changing in front of everyone's eyes. The volume of suppliers now in the market, the number of customers now active in the market – it's actually a very exciting time for the industry and that's the thing that's changed so drastically from when the investiga- tion was announced, to where we are today. There is real competition." Quoting high switching figures – "1.2 million people up to April this year had changed suppliers" – Slade rather boldly claims that "the phrase the big six is nearly redundant now because of the number of large inde- pendent suppliers that there are" and that the market is "very healthy". It's a claim that many consumer groups and independent suppliers would find controversial – or simply spurious – and certainly not one that was reflected by Ofgem's Supply Market Indicator (SMI). But of course that measure has recently made its way onto the scrap heap. Slade grimaces at the mention of the SMI – a measure Energy UK and Slade in particular publicly and repeatedly found fault with. He must be pleased to see its demise, but Slade refrains from any crowing. "We fully accept that you need to have, there need to be, met- rics around performance in the industry – why wouldn't we want that? I just think that it's important that they're good, solid and fact-based as much as possible. "That's why we took steps 18 months ago to start pub- lishing the wholesale market figures, to start publishing switching numbers, to start getting this stuff out there. To say 'hey, this industry doesn't want to hide things', we just want to get them right." Energy UK has offered to work with Ofgem on the development of a new industry metric, a task which will be complicated and which will take time. Slade specu- lates that it's unlikely we'll see a replacement for the SMI before the end of the year, but he'd rather a slow and steady approach that results in something usable than a rushed response that will promptly need an overhaul. His thoughts on the beleaguered smart meter rollout are the same. While he ranks it highly among Energy UK's list of priorities at the moment, Slade is ever mind- ful of the size of the challenge involved in installing 27 million smart meters across the UK by 2020, and of the many technical challenges still to be overcome in terms of meter specifications, data transfer and more. "We're trying to tick off technical challenges in a very constructive fashion which will deliver something which will really revolutionise the supply side of the market," he explains. "Naysayers will pick on the technical chal- lenges and use them to cause negative thoughts around the whole programme. What we're saying is that, yes, there are technical challenges to overcome but that if we work together, they can be beaten." Those naysayers have recently raised fresh concerns about the likelihood of delays to the smart meter pro- gramme. A recent report from the Institute of Directors, Not too clever: will Smart Meters be the next Government IT disaster? makes the case for a full-scale review of the programme and Utility Week has heard rumours of a renewed effort to have the rollout owned by the distribu- tion networks. On the latter point, Slade says a change in ownership of the programme at this stage would be "very very very confusing" and that he firmly believes there are great benefits to supplier leadership "if we get it right". On the prospect of delays, he's philosophical. "Let's hope it doesn't get delayed. But there will be problems. The critical part is for Decc [the Department of Energy and Climate Change], Ofgem and the industry to face up to those challenges and see just how much they can achieve by 2020." In a cynical world, it's likely that however great that combined effort is, criticism and mockery will still abound. But a wall festooned with satirical Matt cartons in Energy UK's reception indicates that the trade body has long since toughened itself against this inevitability. Slade grins at the acknowledgement of the collection. "We can't get above having some fun poked at us," he concludes. "Yes, there are technical challenges to overcome [with smart meters], but if we work together, they can be beaten"

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