Utility Week

UTILITY Week 22nd January 2016

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/628815

Contents of this Issue


Page 27 of 31

Customers This week Businesses 'should avoid DSR trap' Demand response aggregator warns against bidding generation into the transitional auctions The government's initial arrangements to bring forward demand-side response (DSR) are a "trap" that business custom- ers wanting to participate in the market should avoid, according to the founder and chief strat- egy officer of the UK's largest demand response aggregator. Alastair Martin, who founded Flexitricity in 2004, told Utility Week that business customers would be better off participating in the main capacity auctions, which happen in December and include all forms of generation, rather than the transi- tional capacity auctions. The government is running the transitional auctions for two years in a bid to support the development of DSR. This year's transitional auction takes place later this month. Participants can bid their on-site generation or demand-reduction capacity into these arrangements, provided they do not already have a capacity agreement. Martin said: "The transitional auction is a subset of the capacity market and is by no means the best bit. There are a minority of site types for which the transi- tional arrangements are good, but for the majority they are a trap. "Most companies that want to be involved in demand response, we actually recommend going to the main auctions and in fact that's where we've placed the largest part of our portfolio." Martin was positive about the broader take-up of DSR, saying a "decent chunk of the FTSE 100" were already on the aggregator's books. SJ EnErgy Number of switchers reaches 3.8 million Around 3.8 million people switched energy supplier in 2015, setting a new annual record, according to Energy UK. The figures show an increase of about 17 per cent on 2014, when around 3.2 million people switched. There were approximately 340,000 switches in December, just above the monthly average. Small and mid-sized suppliers made a net gain of more than 100,000 over the month. The busiest month for switch- ing in 2015 was October, when almost 440,000 people changed supplier. The quietest month was January, when slightly more than 210,000 people switched. Energy UK chief executive Lawrence Slade said: "Industry and government have made strides towards making switch- ing simpler and quicker. Custom- ers have become more engaged in switching and are shopping around to find the best deal." ElEctricity No compensation for ENW customers Electricity North West (ENW) has revealed it will not be paying compensation to customers for power outages caused by Storm Desmond, despite receiving 22,000 applications. ENW said its efforts to quickly restore power following the storm meant it met the stand- ards of service required by the regulator and it would therefore not be making payments. Regulation for extreme weather events allows network operators 48 hours to reconnect power before customers qualify for a payment of £70. EnErgy Survey says big six still poor for service The big six energy suppliers are still failing to provide decent customer service, according to more than 8,900 energy custom- ers that consumer group Which? spoke to in the latest of its annual satisfaction surveys. For the sixth year running, Npower scored lowest, with a satisfaction rating of 41 per cent. It was followed closely by Scottish Power on 44 per cent and The Co-operative Energy on 45 per cent. SSE scored 52 per cent, only 1 per cent shy of the survey average. Three of the big six managed to meet or exceed the average, but only just: Eon (53 per cent), British Gas (54 per cent) and EDF (55 per cent). A small supplier took the top spot for the fih consecu- tive year: Ovo Energy came first with 82 per cent, Good Energy was second with 81 per cent and Ecotricity was third (77 per cent). Business customers 'better off in main auctions' I am the customer Allen Creedy "There must be a regulatory framework for TPIs" The Competition and Markets Authority (CMA) will soon pub- lish its provisional decision on remedies to improve the energy market. The CMA's latest update will provide a clear indication of the likely outcomes of its exten- sive energy market investigation. FSB played a major role in ensuring that microbusinesses were included in the CMA's inquiry, as much of its original focus was on domestic house- holds. We have been pleased with many of the initial many smaller businesses do not trust the industry or the value for money that a good TPI can provide. In its initial summary in July 2015, the CMA suggested improvements around the infor- mation that TPIs must provide. But this alone will not return trust to this important sector. We believe this must be accompa- nied by a regulatory framework, based around a Code of Conduct. Allen Creedy, FSB chair of energy and environment proposals the CMA has made to address the issues we raised, particularly the necessity for published, comparable tariffs for smaller businesses. However, there will inevi- tably be areas where we feel the CMA could go further. For example, we are concerned that third-party intermediaries (TPIs) continue to operate without an appropriate regulatory frame- work. While many TPIs provide a valuable service to microbusi- ness customers, members tell us that the behaviour of some TPIs is undermining the industry as a whole. Good TPIs lose out to those willing to cut corners or act unethically. As a result, 28 | 22nD - 28th January 2016 | utility WEEK

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 22nd January 2016