Utility Week

UTILITY Week 26th June 2015

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UTILITY WEEK | 26TH JUNE - 2ND JULY 2015 | 23 Customers This week Customers may foot bill for grid upgrade Scottish Power Transmission proposes £27m grid upgrade using novel conductor technology Scottish Power Transmission has asked customers to foot the £27 million bill for a network innovation that it says will avoid the need for future upgrades and ultimately cut costs. Ofgem is consulting on the £27.13 million bid to fund a new conductor through its innovation rollout mechanism. If it approves the bid, customers across the UK will pay for the innova- tion through the transmission charge, which is collected by National Grid via customers' energy bills. Scottish Power would pay the rest of the £44 million project cost through its existing regulatory settlement. The company said the project would allow it to "avoid completely rebuilding parts of the network" and that the use of novel conductor technology would "deliver environmental benefits" because less steel and concrete would be used than if the line were to be rebuilt to deliver higher capacity using current methods. Ofgem told Utility Week: "If we decided they could have this in some or part, then it gets passed through the transmission network user charges and those are col- lected by National Grid. Then it gets charged back to all GB customers through the bills. Under 2 per cent of cus- tomers' bills are accounted for by transmission charges. Scottish Power proposes starting work next month, and to complete the project in March 2018. Ofgem is con- sulting on whether the submission is eligible and will deliver sufficient benefits for current and future consum- ers to balance the cost of the rollout within the price control period. The consultation will close on 17 July. LV ENERGY Smart meter users must see benefits Energy customers who receive a smart meter at the beginning of the rollout must start seeing benefits quickly if consumers are to accept the meters as the programme continues, soware company Opower has warned. Opower's senior vice presi- dent and international general manager Nadeem Sheikh told Utility Week that customers who fail to see value added services soon aer installation will get "frustrated", having paid for the meter but failing to see why they should absorb the cost. He expects energy companies to wait at least a year into the rollout before starting to offer extra services using the data the meter has provided. This, he said, could leave early adopters without any noticeable benefits, but he added customers could perceive value in simple changes such as no longer receiving unexpectedly high bills. ELECTRICITY Powervault targets 50,000 UK homes British technology start-up Powervault has raised £700,000 through investment crowdfund- ing and said it will take on Tesla by installing 50,000 home energy storage systems in the UK by 2020. Solar PV companies will sell systems rated between 2kWh and 4kWh with an installed price of £2,000 to £2,800. It expects to have sold 10,000 home energy storage systems in three years and 50,000 within five years, by which time it expects them to retail for less than £1,000, undercutting Tesla units that will cost $4,000 (£2,500). The company said it will use the new funding to redesign the product to help cut manufactur- ing costs by 20 per cent. ENERGY Small suppliers have an ECO advantage Npower has told the Competition and Markets Authority investiga- tion that exemptions from the Energy Company Obligation (ECO) should apply to both large and small suppliers. Currently only suppliers with more than 250,000 domestic cus- tomers who have provided more than 400GWh of electricity or more than 2,000GWh of gas have legal obligations under ECO. But Npower told the CMA that it would be fairer to allow a standard exemption to all sup- pliers set at 100,000 customers. Npower said exemption from ECO is one of the main advantages small suppliers have over the big six and, along with newer IT systems, lets them offer lower prices. Scot Power offers to contribute £17m I am the customer Richard Lloyd "We want simple pricing, like on a petrol forecourt" Our analysis shows energy bills rose by a shocking 73 per cent in the past decade – an average increase in annual bills of about £580 per household. As annual bills approach £1,400, Which? is calling for the Competition and Markets Authority (CMA) to set out how it will shake up the energy market when it reports the findings of its year-long investigation in the next week. Spending on energy rose from 2 per cent of household budgets for a price to beat, to act as a benchmark so anyone stuck on an expensive energy tariff is pro- tected even if they don't switch. More than 200,000 have backed our Fair Energy Prices campaign calling for action on energy prices and to make bills fairer. The CMA has a great chance to fix things but must be brave, and not shy away from tough decisions that show it's on the side of consumers. Richard Lloyd, executive director, Which? in 2004 to 4 per cent a decade later and energy prices are our biggest concern, with two-thirds worried about their bills. Yet three-quarters of us languish on standard tariffs, oen paying hundreds of pounds more than they should. People should be confident the price is fair, so we want simple pricing, like on a petrol forecourt, so switchers know they're making the right choice. But switching rates are only one part of the problem. Making it easier to switch won't help people find the best deal in a complex market that's not set up to work in their interests. This is why we are also calling

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