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UTILITY Week 6th November 2015

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12 | 6TH - 12TH NOVEMBER 2015 | UTILITY WEEK Policy & Regulation This week DNOs to encounter tougher competition Ofgem introduces code of practice to stimulate competition in the electricity connections market Distribution network opera- tors (DNOs) will face stiffer competition under a new code of practice for the electricity connections market, which came into effect on 30 October. The code, introduced by regu- lator Ofgem, limits the number of essential services of which DNOs will be the sole provider, and forces them to provide an equal service to competi- tors in releasing technical information. Ofgem said DNOs were taking "too long" to state the location on their networks where a connection could be made. Independent companies can now choose the loca- tion, which will "significantly speed up the process". Accreditations and authorisations for engineers certi- fied to work on or design connections will be applicable across the UK, and will not have to be approved by DNOs if independent. DNOs must also have a consistent inspection and audit regime for adopting all connec- tions, regardless of who has undertaken the work. The introduction of the code follows a review of the connections market by Ofgem. The regulator said Elec- tricity North West and Western Power Distribution had made "progress" in opening up the connections market, but "a binding code is needed" to "improve the consist- ency of arrangements across Great Britain". Maxine Frerk, Ofgem's interim senior partner, distri- bution, said: "We want to see competition in the electric- ity connections market thriving. While some DNOs are helping to achieve this, many independent companies still face unnecessary delays." LD ENERGY £100bn injection for infrastructure Chancellor George Osborne has committed £100 billion to the newly formed National Infra- structure Commission to ensure Britain is "fit for the future". The multibillion pound com- mitment for the next five years follows Osborne's announce- ment in early October that the government will proceed with the plans originally put forward by the Labour party, with Labour's former transport secre- tary, Lord Adonis, at the helm. The primary focus is expected to be transport, but energy infrastructure has also been earmarked, with the commission told to focus on "exploring how the UK can better balance sup- ply and demand, aiming for an energy market where prices are reflective of costs to the overall system". GAS GDNs incentivised to exceed fuel-poor connection targets Ofgem has opened a consulta- tion on proposed incentives to encourage gas distribution networks (GDNs) to exceed their obligations for connecting fuel- poor homes to the gas networks. Under the proposals, the non- gas fuel-poor network extension scheme incentive mechanism will award GDNs 2.5 per cent of the costs of connecting fuel- poor households to the network above their current obligations from 1 April 2016. GDNs that exceed their obli- gations will be rewarded during the next price control period. They will also be penalised by 2.5 per cent of the avoided costs of the connections they have not delivered against the target. The consultation closes on 30 November. WATER South West Water fined £214k South West Water has been fined £214,000 by Plymouth Crown Court for breaching environmen- tal controls at the Camels Head sewage treatment works in Plym- outh and failing to stop sewage pouring into the River Tamar. This is the highest fine handed out to South West Water for a case brought by the Envi- ronment Agency. The plant at Camels Head serves more than 40,000 people and discharges into the sensitive Tamar estuary near the Devon- port Naval Dockyard. The court heard that between March and September 2013, South West Water failed to oper- ate and maintain the works in accordance with good opera- tional practice and to treat efflu- ent so as to minimise the risk of pollution. Code of practice will enable faster connections Political Agenda Jillian Ambrose "Policies to secure supply could be a false economy" The Tory government may be riddled with a eurosceptic wariness of foreign "interfer- ence", but the same cannot be said for its energy policy. In recent weeks, it has bent over backwards to bring forward the costly new nuclear plans led by French state-owned EDF. And no sooner had George Osborne con- cluded talks with EDF's Chinese partners, than David Cameron acted to pave the way for future Icelandic power imports. Greater use of interconnec- Many are now wondering whether policies designed to secure supply are a false econ- omy: by continuing to throw money at the problem, more and more money is needed. Rather than looking to Europe, perhaps it's time the government looked closer to home. To break its chronic and expensive supply-side addiction, the energy agenda needs reha- bilitation – energy efficiency and demand-side management might be just the place to start. tors to import renewable power may seem like a foolproof plan to meet the UK's decarbonisa- tion targets. But by doubling its dependence on cheaper European energy sources, homegrown thermal generation might prove unable to compete, widening the supply gap and leaving consumers even more vulnerable to a capacity crunch. Consumers are already required to pay for UK renewa- bles, then pay again for a capac- ity auction to ensure conven- tional plants don't disappear by 2018. And in the meantime consumers will pay for National Grid's much-needed backstop reserve measures too.

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