Utility Week

Utility Week 3rd March 2017

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

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UTILITY WEEK | 3rd - 9Th March 2017 | 3 This week 4 | Seven days 6 | Generation Review a special report on offshore wind in the UK 12 Policy & Regulation 12 | News Multi-utility regulator mooted by Gemserv 14 | Analysis Will marine power survive the shift from rocs to cfds? 15 | Analysis rIIO annual reports put network companies under scrutiny 16 Finance & Investment 16 | News dNOs underspend on network management 17 | Analysis dong's new focus pays off after successful IPO 18 Operations & Assets 18 | High viz Barratt homes development at St Oswald's View 21 | Market view how companies could do more on mental health issues 22 | Event The Wipro and Utility Week Technology and Innovation council 24 Customers 24 | News 'Best offers' letter may fail most vulnerable 27 | Market view Independent energy suppliers need a clear strategy and the right wholesale partner 28 | Market view Smart meters will redefine utilities' relationships with their customers 30 Community 31 | Disconnector GaS 21 | Market view how companies could do more on mental health issues WaTEr 18 | High viz Barratt homes development at St Oswald's View ELEcTrIcITY 6 | Generation Review a special report into offshore wind in the UK 14 | Analysis Will marine power survive the shift from rocs to cfds? 15 | Analysis rIIO annual reports put network companies under scrutiny 16 | News dNOs underspend on network management ENErGY 17 | Analysis dong's new focus pays off after successful IPO 22 | Event The Wipro and Utility Week Technology and Innovation council 24 | News 'Best offers' letter may fail most vulnerable 27 | Market view Independent energy suppliers need a clear strategy and the right wholesale partner 28 | Market view Smart meters WNS: The UK Smart Meter rollout http://bit.ly/2espIJ3 CGI: Energy Flexibility Transforming The Power System By 2030 http://bit.ly/2bR3zXB Knowledge worth Keeping Visit the DownloaDs section of Utility week's website http://www.utilityweek.co.uk/ downloads Second time lucky for RIIO? "Ofgem is seeking to make regulation 'smarter' by placing more emphasis on financial incentives to deliver efficient innovation and investment over a longer timescale." So said then-Ofgem chief executive Alistair Buchanan in 2010, when the new regulatory framework for networks, RIIO, was unveiled to great fanfare. Fast-forward seven years, and here's what his suc- cessor, Dermot Nolan, said two weeks ago: "When you set up a new regulatory framework, you're never going to get everything right." That's an astonishing comment: Nolan is admitting that Ofgem got RIIO wrong, and saying such an outcome was inevitable. If the regulator thinks it's okay to mess up, will he be extending that atti- tude to the companies he regulates? In fairness, the blame for RIIO can't be laid at Nolan's door: he joined Ofgem in 2013, aer the first cycle of RIIO began and long aer it was designed. In fact, he's to be applauded for his honesty, and bravery in saying, "hands up, we got it wrong, and we'll change the process accordingly". But to suggest such an error, which has grave ramifications, is inevitable is going too far. The consensus is that RIIO has been successful in many ways – not least with the introduction of innovation funding, which has ushered in a culture change among networks and ensured knowledge-sharing that has put Britain at the forefront of network innovation globally. Yet one of its main planks was the move from a five-year cycle to an eight-year one. This was supposed to encourage much-needed investment in new network infrastructure. There are good reasons to now retreat from an eight-year cycle. The industry is changing rapidly and electric vehicles, for example, will change the game so dramatically when the tipping point is reached that It makes little sense to plan too far ahead. But surely this would have been as obvious several years ago as it is today? This U-turn will have the opposite effect to that intended: it creates regulatory uncertainty, the death knell for investor confidence. Perhaps in a nod to this, the midpoint reviews are looking to be light touch as promised (£185 million off National Grid's settlement? Pocket change!). The next price review will undoubtedly be tougher, but following Northern Power Grid's successful challenge of ED1, networks may have a different attitude to their settlements. The days of agreeing a figure in the round – you win some, you lose some – are gone. Whether for five years or eight, brace yourselves for some tough negotiations ahead. Ellen Bennett, Editor, ellenbennett@fav-house.com Leader Ellen Bennett

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