Utility Week

UTILITY Week 13th January 2017

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

Issue link: https://fhpublishing.uberflip.com/i/772056

Contents of this Issue

Navigation

Page 8 of 31

UTILITY WEEK | 13TH - 19TH JANUARY 2017 | 9 2017 Preview EARLY 2017 MILESTONES 15 February: Ofgem's forward work programme consultation closes 8 March: the government will announce its spring budget 22 March: transitional capacity auction starts 31 March: Article 50 will have been triggered, formally starting the process for the UK to leave the EU 1 April: advanced meters can no longer be installed as an alternative to SMETS- compliant smart meters by larger suppliers (1 August for smaller suppliers) 3 April: non-domestic water market in England opens Spring: government expected to publish a plan on how to develop the UK's energy system, responding to the smart systems consultation May: the first Thames Tideway tunnelling machine is scheduled to arrive on site businesses and will be looking forward to further insight into the thoughts of govern- ment and the regulator on questions such as the role of gas networks in a decarbonised future and the interface between electricity distribution and transmission in a smart, flexible energy system. Energy retailers also have their part to play in this smart future, although in 2017 it is possible that broader smart product offer- ings may be swamped by the immediate pressure to roll out smart meters. This enormous national programme has been beset by problems. It is likely this year will bring fresh ones as SMETS2 meters make their debut and rumoured issues around the interchangeability of ' SMETS1 meters between different suppliers emerge. The burden of the smart meter rollout will fall heavily on the shoulders of smaller suppliers already struggling with a volatile market that led to the demise of GB Energy Supply and Northern Ireland's Open Electric before Christmas. But it is not just energy suppliers who are set to square up to some existential threats in 2017. Organisations engaged in the governance of industry codes will need to be nimble in adapting to incom- ing requirements for competitive tendering. In terms of infrastructure, the back end of 2017 should see the first delivery of capacity secured via the capacity auction, supposedly plugging future supply gaps. We should also see the start of construction work on infra- structure mega-projects such as the Thames Tideway Tunnel and Hinkley Point C. In short, 2017 is set to be a fast-paced year, with market developments that will change the face of utility businesses of all stripes both in the immediate and longer term. Review of 2017 continued on p10 Energy companies have yet to engage with people stuck on expensive standard tariffs. E nergy is a perennial issue for both households and government and it was a turbulent year for the industry in 2016. From kicking off the smart meter rollout to Hinkley Point C gaining approval and the CMA's long-awaited two-year investigation finally coming to an end, it has been an event- ful 12 months. But the energy industry has not yet risen to the challenge of fixing what is now commonly referred to as "the broken energy market". Customers, quite rightly, will be questioning what has changed this winter. Since the CMA reported on it is findings this summer, we've repeatedly been told that consumers could be saving a significant amount of money a year by switching to the cheap- est dual fuel deal available. However, while switching levels are increasing, they still remain woefully low. Ofgem has been tasked with testing and trialling a number of remedies with energy compa- nies to increase competition and reach those least engaged in the market. While there have been concerns about whether these reforms will transform the market, we want to see whether these remedies will deliver for consumers. In the meantime, the industry must not drag its feet. It should take the lead in making changes that can have an immediate impact. Following the CMA's investi- gation, the energy industry has stayed at the forefront of the media. Hinkley Point C gained approval and is set to go ahead. We now want to see it being delivered effectively and trans- parently, and for the govern- ment to assure people that costs will not be allowed to spiral out of control. Similarly, with the smart meter rollout being delayed again in the lead-up to its 2020 deadline and with savings now smaller than suggested, the government must ensure that consumers really will get value for money from the rollout. More recently, with the collapse of GB Energy there is speculation that other small suppliers could suffer the same fate as wholesale prices rise. Ofgem has handled the collapse well and must ensure that con- sumers continue to be protected if other suppliers go to the wall. Moving into the new year, the CMA said customers are still collectively overpaying by a staggering £1.4 billion a year. This winter we've called on all energy companies to find new ways of getting customers stuck on poor value deals to move. Our "Fair Energy Prices" campaign is challenging energy companies to publish plans by 31 January detailing how they will engage standard tariff customers and take immedi- ate action this winter to deliver against this plan. To date, we've had no response. While some compa- nies have taken a step in the right direction by freezing their standard tariffs, this is not enough. A temporary freeze for the winter will not help custom- ers in the long term. Let's hope that 2017 will be a year of change for consumers, particularly those spending over the odds on energy. If energy companies continue to fail to engage with customers, they will have no-one to blame but themselves if the government and the regulator intervene. Viewpoint Alex Neill Managing director, home and legal services, Which? power and flywheels. Though the potential is there for this technology to deliver great cost savings to utilities and consumers, the reality of large-scale investment may take longer than 12 months to fully action. Ransomware attacks As cyber-criminals increase in confidence and sophistication, 2017 may be the year that we see the first reported instances of utility providers falling victim to a ran- somware attack. We may even see systems hacked and seized by criminals, with large sums of money demanded to avoid networks having their power shut off. James Forrest, head of energy & utilities, Capgemini UK Alain Bollack, vice president, smart energy, utilities, Capgemini

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 13th January 2017