Utility Week

UTILITY Week 22nd July 2016

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Page 18 of 31

UTILITY WEEK | 22ND - 28TH JULY 2016 | 19 Policy & Regulation The MP for Tunbridge Wells was voted into parliament in 2005. When the Department of Energy and Climate Change was set up by the Labour government in October 2008, Greg Clark was appointed as the shadow secretary – a position he held for a year and a half. Since then he's had several stints as a minister for the Department for Business, Innovation and Skills. Before his most recent appoint- ment, he served as the secretary of state for communities and local government – something that might help him to advance the interests of distributed and community energy. Clark has a strong track record of supporting the decarbonisation agenda, for example advocating the development of carbon capture storage and policies to improve energy efficiency. His appointment as secretary of state for BEIS has been welcomed by many. "He understands climate change and has written influential papers on the benefits of Britain developing a low-carbon economy," said Richard Black, director of the Energy and Climate Intelligence Unit. "Importantly, he sees that economic growth and tackling climate change are bedfellows, not opponents." In a speech in 2009, Clark argued forcefully against curtailing climate change policies to save money following the financial crisis: "The first thing to note is its underlying premise, which is that fighting climate change is costly and, therefore, particularly unaffordable in a time of a recession. As a working assumption, it forms part of a larger narrative that portrays environmentalism in purely sacrificial terms. Ironically, this unites the greenest of the greens, who advocate a sim- pler way of life, with their sworn enemies, who see environmentalism as a matter of rationing and regulation. "My view is both extremes are wrong, and that this theme of great sacrifice – however you choose to spin it – is fundamentally misconceived." Former energy minister Greg Barker told Utility Week: "We have in the new secretary of state someone with an outstanding record of thoughtful commitment to the green agenda. I worked closely with Greg Clark in opposition and I know that he continues to be committed to the most efficient, cost-effective but also ambitious decarbonisation of the UK economy that will allow us to reach our carbon reduction targets." Greg Clark's track record of supporting decarbonisation means his appointment is welcomed by many Committed to the green agenda The pros and cons of the Dec- Bis merger will remain specula- tion until junior ministers are settled in and the ramifications for civil servants across the two departments are ironed out. Only then can the nitty-gritty of policy implementa- tion continue. Decc's freshly appointed perma- nent secretary Alex Chisholm – former chief executive of the Competi- tion and Markets Authority – is leading discussions on workforce arrangements in partnership with the Decc permanent secretary and more detail is expected imminently, including confirmation about which of them will act formally for the new department. There are key projects that will need protecting during this period of transition. The ongo- ing investigations into barriers to energy storage and the future role of the system operator as well as the Future Power System Architecture (FPSA) project, which reported on 20 July, are all essential. Many are also in critical stages of devel- opment with nascent markets relying on them to progress. The FPSA project's chair, Dr Simon Harrison, told Utility Week that his team will be swi in "urging government to con- tinue its engagement with this important project", which is "key to transforming our energy system to meet the challenges of the energy trilemma". Some disruption and delay to this and other projects is almost inevitable, however, as BEIS goes through the messy process of integrating Decc and Bis workforces and IT systems and moving to a new building. Establishing a strong working relationship between the new department and Ofgem is cru- cial for continuity and progress. Among other items high on the BEIS to-do list will be: • Levy control framework: this mechanism for manag- ing taxpayer contributions to the decarbonisation of energy has attracted calls for reform and has no clear future beyond 2020. BEIS will need to set out its formula for spread- ing/capping the costs of decarboni- sation; • Smart meter roll- out: energy suppli- ers heading up the national rollout of smart meters have asked repeatedly for the 2020 deadline for completion to be shied, or for an 80 per cent rollout target to be set rather than the current 100 per cent; • Ownership of the National Infrastructure Plan (NIP): traditionally the jurisdic- tion of Treasury and Cabinet Office, the NIP is highly relevant to BEIS' industrial strategy remit and incorpo- rates an enormous level of investment in energy infra- structure. There is therefore an argument for transferring ownership of the plan to the new department. The new department is also likely to find itself lobbied hard by advocates of carbon capture and storage, keen for a revision of the decision to scrap support for the technology. There will also be a great deal of work to do in relation to Britain's EU exit and matters arising for energy policy – though some of these may now fall to the Department for International Trade, which has taken on Bis's old responsibility for trade and investment. This means that the Depart- ment for International Trade, headed by North Somerset MP Liam Fox, is now the lead department for discussion of Hinkley Point C. For more on the ministerial appointments at BEIS, see news on p17 Another key fallout from the reconfiguration of departments during the recent reshuffle is that responsibility for skills – including apprenticeships – and universities, has been returned to the Depart- ment for Education. Again, this move has its logic and, optimistically, it provides scope for finally doing away with a two-speed education system that devalues vocational talent in favour of academic prowess. However, it also casts a shadow of uncertainty over the fate of much good work conducted in recent years to put employer needs at the heart of qualifications preparing young – and older – people for the workplace. It is critical that the reassignment of responsibility for apprenticeships in particular, does not result in employers being distanced from the design and assessment of standards. Swi clarification is also needed on the fate of the apprenticeship levy – a 0.5 per cent payroll charge that is planned to fund apprentice- ship training – which is due to come into force in April 2017. Next steps after the merger? Analysis Employer ownership of skills UtilityWeek Interview: the EA's John Curtin and Harvey Bradshaw p8 TOPIC: THE EMERGENCE OF NON-TRADITIONAL BUSINESS MODELS p10 22ND - 28TH JULY 2016 THE BUSINESS OF UTILITIES HOW WOULD UTILITIES FARE IF A FALLING POUND PUSHED UP INTEREST RATES? p22

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