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10 | 16TH - 22ND DECEMBER 2016 | UTILITY WEEK The year in review Infrastructure installations Major infrastructure projects continued in 2016, despite a rocky ride created by the rip- ples of Brexit. The 884MW Carrington CCGT came fully online in September and forms a crucial part of the UK's current, and future, generation mix. It is the first gas-fired power station to come online under the government capacity market mechanism. Carrington coming online followed the saga of Hinkley Point C, which eventually saw EDF make a final investment decision to go ahead with the new nuclear project, which was then called in and reviewed by the new government, before being given final approval – aer certain security condi- tions were met. This paves the way for fur- ther new nuclear projects to take place. Tideway has also begun the major tun- nelling for the Thames Tideway Tunnel, confident that it will be able to deliver the "supersewer" ahead of schedule and under budget. Retail revolution The year began with independent suppliers continuing their slow but steady encroach- ment into the big six's market share. They were boosted by the hope that the CMA would hit the big six with its market "rem- edies", which were updated at regular inter- vals by the competition authority before the big summer reveal. When that came, it was a bit of a damp squib. The prepayment tariff cap was wel- comed because the move will help protect the more vulnerable consumers, but not many were convinced that switching would be helped by compiling a database of non- switchers, or by removing the whole of market requirement from price comparison websites. Despite this, the industry is keen to get the remedies in place, creating a more com- petitive market, although the government has begun circling and making threatening sounds (see Lobby, below). However, from late summer onwards, rumours began circulating that some of the smaller suppliers could struggle this winter in the face of volatile wholesale prices. These grew until GB Energy Supply became the first to admit defeat last month, with its 160,000 customers being transferred to Co-op Energy. The fear remains that other, poorly hedged and under-capitalised companies could follow, damaging faith in the market, and pushing people back into the "stable" arms of the major retailers. Tumultuous times The past 12 months have not gone as expected. There have been a huge political overhauls and testing times for utilities. This comes on top of a struggling retail sector in energy that is desperately trying to change, while the market in water gets ever closer as players scramble to prepare. The o-predicted capacity crunch for this winter appears to have been avoided, with the commissioning of new plant, the use of demand-side response and other flexibil- ity tools at National Grid's disposal, while future capacity has been secured with the green light for Hinkley Point C. The year ends in a far from settled state. and this can be expected to endure for some time to come. Brace for 2017. A year of political earthquakes The established political order has been turned on its head with one seismic shock after another in 2016. A week is a long time in politics. A year is an eternity, and has seen the end of some high-profile political careers. The EU referendum vote and its impact dominated 2016. David Cameron staked his reputation, and his job, on remain, lost the gamble and departed Number 10 aer a 52:48 vote to leave. In came Theresa May and wholesale change. The Department of Energy and Cli- mate Change was axed, and merged with the remnants of the department of Business, Innovation & Skills to create the department of Business, Energy and Industrial Strategy (BEIS). Greg Clark was given the responsibil- ity of leading the new department – and lead- ing business, energy and industrial strategy thinking for the new government. One of the first things his department did was poop EDF's party. On the day the French energy giant made its final investment deci- sion on Hinkley Point C, BEIS and govern- ment called for a review in the deal. This stemmed from security concerns around the Chinese involvement in the project. Aer a summer-long wait, BEIS and May gave Hinkley the green light, with security conditions. Nuclear was also given another boost with the £250 million research and development competition, which could award funding to small modular reactors. The new government is also eager to make its mark, continually threatening to intervene in the energy market. May made this clear in her inaugural party conference Climate change crackdown This year saw the UK, as well as the wider world, agree to take steps to limit the impact of climate change by ratifying the Paris agree- ment. The deal, which aims to keep global warming to less than 2°C, will affect the UK's energy policy as it continues to cut carbon. Alongside this, the government has signed up to the fih carbon budget and reiterated its intention to remove unabated coal from the system by 2025. These moves signal the new government's intention to stick to the green agenda and push on with more low-carbon generation. It's slow getting smart The smart meter rollout has been beset by delays, running over the six-month contin- gency in the DCC's plan. Finally, all three regions of the DCC network are live. There are now growing calls for the 2020 deadline to be pushed back. Government is insistent, for now, that it won't budge. Elsewhere, BEIS has launched a wide- ranging call for evidence on the move towards "a smart, flexible energy system". The focus is on where regulatory change or space for innovation is needed. The smart system positioning paper identifies four main areas of work necessary to build a system capable of cultivating innovation and meeting the changing demands of customers: remov- ing barriers to storage and demand-side response; improving price signals to allow more flexibility; catalysing innovation; and assessing changes to roles and responsibili- ties in the energy system. Lobby Policy / Party conferences Conservative Labour Liberal Ukip Green 2016 VOTING INTENTION 50% 45% 40% 35% 30% 25% 20% 15% 10% 5 % 0% 14 01 16 14 02 16 14 03 16 14 04 16 14 05 16 14 06 16 14 07 16 14 08 16 14 09 16 14 10 16 14 11 16 Source: UK polling report