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UTILITY WEEK | 28TH OCTOBER - 3RD NOVEMBER 2016 | 9 Policy & Regulation This week Ofgem asks if Energy UK is up to its task Senior partner doubts trade body is resourced to cope with the changing regulatory landscape A senior figure at Ofgem has questioned whether the trade body Energy UK is "sufficiently resourced and empowered" to meet the needs of the indus- try in the changing regulatory landscape. Senior partner for consumers and competition Rachel Fletcher made the comments while discussing Ofgem's shi away from a prescriptive, rule- based regime towards one based on general principles. Speaking at the Utility Week Congress in Birming- ham, she said: "Generally the level of supplier support we have for principles-based regulation is encouraging. We had a senior roundtable meeting a few weeks ago, which was well attended and showed many companies are thinking actively about this." However, Fletcher said she still has fears: "Industry- wide issues will continue to crop up whether due to human error, data inaccuracies or technology going wrong. If Ofgem is to give industry collectively more space to sort these out, suppliers will require a strong trade body and one questions whether Energy UK is sufficiently resourced and empowered to do this job, and also how can non-member companies be brought into the fold." Energy UK said: "Energy UK, working with our mem- bers, has a strong track record in taking responsibil- ity for issues affecting our customers and driving up standards. We have a growing membership of over 90 members, including 22 suppliers. Energy UK looks for- ward to continuing to work with Ofgem as the regulatory framework evolves." TG ENERGY Database depends on successful trial A database for 'sticky' custom- ers who are disengaged from the energy market will not be implemented unless trials prove successful, a senior figure at Ofgem has revealed. The regulator has begun research into the measure aer it was recommended by the Com- petition and Markets Authority in its final remedies in June. "We will only launch the database if we've got a solution that's having a material impact on consumers and brings about the sort of benefits we know are needed," said Ofgem senior part- ner for consumers and competi- tion Rachel Fletcher. The measure would see customers who have been on a standard variable tariff for more than three years added to a cloud database accessible by all suppliers. Suppliers would then be able to directly market to these 'sticky' consumers. Mar- keting would only be allowed by post and customers would be able to opt out of the database. ENERGY Market should back disruptive ideas The capacity market should be "redesigned" to open it up to demand-side response (DSR) and storage, the Energy and Climate Change Committee has argued in its final report. MPs have urged the govern- ment to get rid of "outdated" rules that discourage disruptive technologies. "There is an incredible oppor- tunity for the UK to become a world leader in these disruptive technologies," said committee chair Angus MacNeil. "Yet our energy security subsidies favour dirty diesel generation over smart new clean tech solutions." The report said the length of contracts offered to DSR provid- ers should be re-examined. New- build generation capacity can bid for contracts up to 15 years long, but DSR developers can secure only one-year contracts. "Our view is that significantly longer contract periods should be available to DSR providers," the committee said. The requirement for DSR developers to put down a deposit before bidding into the auction should be removed, and if not, the required deposit should at least be reduced so it makes up a "more reasonable percentage of the cost of the projects that are bidding". Furthermore, the government should address the rules pre- venting storage providers from stacking other revenues on top of capacity market payments. It should look into the use of a merit order to give priority to DSR over diesel generators when the margin between bids is tight. Fletcher: suppliers need a strong trade body SSE has welcomed proposals for a £39 million scheme to support district heating, but said further measures are needed. SSE – a leading heat network provider in the UK – said the pilot scheme should "signal a new era in public support mech- anisms for this vital component of the future energy landscape". However, SSE's director of heat, Mike Reynolds, said that although good progress has been made in enabling areas with better guidance, such as the introduction of CIBSE design codes and the Heat Trust, "progressive policy intervention should go hand-in-hand" with the funding. "It is important to ensure that we continue to remove barri- ers to entry to the market for new suppliers; that we enable competition; that we bring good quality assurance; and, critically, that we address the relatively untouched retrofit market as well as new build," Reynolds said. SSE has doubled its heat networks team in the past 12 months to meet demand and anticipated expansion. It cur- rently operates 13 heat networks across the country, including London's Greenwich Square and Victoria Nova, and will triple the number of customers supplied over the next two years. It has also recently been chosen as the preferred bid- der for one of the UK's largest regeneration projects – Barking Riverside. The pilot funding scheme will be followed next year by the main scheme, financed by £281 million of the government's promised £320 million of prom- ised support. The investment aims to draw in up to £2 billion of additional capital investment, increasing the number of cost-effective, low-carbon heat networks being built, while creating the right conditions for a self-sustaining heat network market. WATER SSE calls for further measures to support district heat