Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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UTILITY WEEK | 16TH - 22ND DECEMBER 2016 | 11 The year in review speech, and the political grandstanding to the market continues. On the opposition benches, things have been dominated by internal power strug- gles. Labour MPs kicked off a leadership challenge with mass resignations, hoping this would force leader Jeremy Corbyn out. A failed challenge from Owen Smith has not only strengthened Corbyn's party man- date, but forced some shadow ministers to eat humble pie as they returned to their posts, still disgruntled with their leader. Poll- ing shows they are right to be concerned, because Labour has hit its lowest point in more than a decade. The only meaningful energy comment to come from Labour is its persistence with the idea of "democratising energy", and setting up municipal and community energy compa- nies to challenge the big brands. The Tories, despite struggling to get a handle on Brexit, are at least happy they are not Labour. But both sides will be hoping 2017 provides answers, firm policies, and a chance for UK politics to focus on UK issues. "The referendum was not just a vote to withdraw from the EU. It was about something broader. It was about a sense that many people have today that the world works well for a privileged few, but not for them." PRIME MINISTER THERESA MAY APPOINTMENTS AND DEPARTURES Southern Water: chief executive Matthew Wright leaving, Ian McAulay (pictured) coming in BES Utilities: Nick Dilworth is the new managing director, succeeding Andy Pilley, who has now taken up the role of chairman. Utilitywise: Brendan Flattery is the new chief executive, replacing Geoff Thompson, who will become executive chairman. NuGen: Takeshi Yokota is the new chair- man, taking over from Shigenori Shiga, who has been appointed overall chairman of Toshiba. Bristol Water: Luis Garcia is stepping down as chief executive at the end of the year. His replacement has yet to be named. Which? Alex Neill was named the new executive director, replacing Richard Lloyd. Thames Water: Truphone chief executive Steve Robertson will replace Martin Baggs as chief execu- tive in early September 2016. Meanwhile, SSE's managing director of finance, Brandon Rennet, will succeed Stuart Sid- dall as chief financial officer. He will take up the post in March 2017. Electricity North West: Peter Emery MBE (pictured) replaced Steve Johnson as chief execu- tive on 17 May. It's been a good year/bad year Bad: Coal – the summer saw the first time in more than 100 years where there was no electricity gen- erated from coal-first power sta- tions on the UK system. Bad: GB Energy Supply – the independent supplier went out of business because of the rising wholesale price of energy. The com- pany's 160,000 customers have been trans- ferred to Co-op Energy. Good: Green gas – a number of smaller suppliers have launched green gas tariffs, while Ecotricity saw its £10 million green gas mill gain planning permission. The biometh- ane industry gained recognition as a valid method for businesses to reduce their green- house gas emissions. Good: Nuclear – Hinkley Point C was finally signed off by EDF and eventually approved by the govern- ment, and BEIS announced it would invest £250 million in an "ambitious nuclear research and development programme". Good: Castle Water – the Scottish based supplier took over the busi- ness customers of Southern Water and Portsmouth Water to become one of the UK's largest water retailers. Energy generation Final approval of Hinkley Point C in September, which will look to provide 7 per cent of the UK's energy needs once it comes online, was a major moment for the UK energy sector. Nuclear power is now set to become a key contributor to the UK's energy mix going forward. In what was a big year for the growth of renewable generation, green energy now accounts for 20 per cent of the UK's daily energy capacity. Renewable energies and energy efficiency programmes have also resulted in the considerable reduction of carbon dioxide emissions. Energy supplier market Competition among energy suppliers rocketed this year. With a total of 44 energy retailers now operating in the market, including 15 new entrants. This means that the UK is now one of the most competitive energy markets in the world. Advances on a consumer level Customers switched on to the idea of the connected home this year, with connected home devices soaring in popularity as products matured and further gained the backing of big brands. These technologies entered the mainstream with consumers beginning to realise the benefits of the digitised technologies offered by utilities providers. The launch of the Data Communication Company in November 2016 was a huge turning point for the smart meter rollout in the UK too. In theory all 53,000,000 smart meters across the country are now set up to efficiently communicate with suppliers, consumers and the utilities sector at large once installed. The next step will be to see whether the infrastructure has the capacity to run the data provided by the large volume of smart meters. Fierce competition by energy suppliers also led to new tariffs being introduced on the market, including the implementation of time of use tariffs. This shows a turning point with regards to how energy suppliers engage with customers going forward, because now it will be commonplace to use tariffs as a way to boost customer retention and satisfaction. With more and more tariffs entering the market, it is likely that making the process more complicated could lead to customer dissatisfaction. However, only time will tell. James Forrest, head of energy & utilities, Capgemini UK Alain Bollack, vice president, smart energy, utilities, Capgemini From an increase in renewables to the growth in the popularity of plug-and- play products, 2016 has been a year of positive change for the sector. These are three key developments that looked to disrupt 'classical utilities mindset'. Columm James Forrest and Alain Bollack