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UTILITY WEEK | 20TH - 26TH JANUARY 2017 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 9 Policy & Regulation 9 | News Ofgem plans for separation of SO role 10 | Market view A list of low-carbon recommendations for 2017 11 | Analysis Stormont assembly falls after RHI controversy 12 | Analysis Is the tide turning for tidal lagoons? 14 | Opinion Energy could invigorate the Northern Powerhouse 15 | Analysis National Grid is electricity's ringmaster 17 Finance & Investment 17 | News Share transfer halts Dee Valley Water sale 18 Operations & Assets 18 | High viz CS Wind 22 | Market view Learning about service from other sectors 23 | Market view The rise of the machines 24 | Market view Flexibility is about to become a mainstream feature 25 Customers 25 | News First-timers were 37% of switchers in 2016 27 | Market view Affordability assessments 28 | Market view Effective customer contact through call centres 30 Community 31 | Disconnector System operator role had to be fudged When idealism conflicts with the reality on the ground, a pragmatic fudge is oen the best solution. So a hearty welcome, then, to the proposals put forward by Ofgem last week to create a new, legally separate entity within National Grid to act as system operator. Ofgem is tackling the tricky problem whereby various politicians and interested parties feel National Grid is getting too big and too powerful, and that its commercial interests conflict with its growing statutory role. This has become a particular issue in recent years as the company's government-mandated functions have grown, giving it the potential ability to manipulate its role in such a way as to make more money from its ancillary service businesses – though it must be stressed, there is no suggestion that it has ever acted on this potentiality. See Nigel Hawkins' analysis, p15. Critics argued for an independent system operator to oversee the day-to-day operation of the system, while National Grid retained own- ership of the transmission system and other businesses. On paper, this is hard to argue with. In practice, it would be complex, time-con- suming and distracting to implement, at a time when Grid faces big engineering challenges arising from the transformation of the power system. It would also split the country's top power engineering talent. Ofgem's solution? The old trick of Chinese walls, effectively setting up a new body within Grid that would have a separate licence, physical separation and information ring-fencing. This is a workaround that chimes with the recommendations of the National Infrastructure Commission last year. It also gives Ofgem, and its masters at BEIS, the opportunity to set a new focus for the system operator, with an emphasis on overseeing whole-system integration and ushering in competition in networks. So far, so good. But like any fudge, it can only hold for so long. Ofgem's consultation acknowledges that "in the longer term… the system operator may need to evolve further and there may be a need to consider moving to a fully independent system operator". Watch this space. • Has anyone else noticed that the government has gone quiet on domestic water competition since the change at the top? Granted, Theresa May's administration has its hands full, but given how closely ex-Chancellor George Osborne was linked with the proposal to bring forward domestic competition, his demise may well see it kicked back into the long grass. With non-domestic water com- petition looming large, this will be a relief to the industry. The customers, frankly, don't seem to care much either way. Ellen Bennett, Editor, ellenbennett@fav-house.com GAS 22 | Market view Learning about service from other sectors 28 | Market view Effective customer contact through call centres WATER 17 | News Share transfer halts Dee Valley Water sale ELECTRICITY 9 | News Ofgem plans for separation of SO role 12 | Analysis Is the tide turning for tidal lagoons? 15 | Analysis National Grid is electricity's ringmaster 18 | High viz CS Wind ENERGY 10 | Market view A list of low-carbon recommendations for 2017 11 | Analysis Stormont assembly falls after RHI controversy 14 | Opinion Energy could invigorate the Northern Powerhouse 23 | Market view The rise of the machines 24 | Market view Flexibility is about to become a mainstream feature 25 | News First-timers were 37% of switchers Visit the Downloads section of the website WNS: The UK Smart Meter Rollout http://bit.ly/2espIJ3 ESRI: How location information is improving stakeholder engagement http://bit.ly/2fEwLP9 Certas: Balancing capacity market concerns: setting the record straight on fuel http://bit.ly/2essYnG