Utility Week

4 | UTILITY WEEK | 12Th - 18Th MAY 2017 | UTILITY WEEK Energy worries Network bosses are increasingly concerned about the rise of small- scale energy, states Accenture. 58% The percentage of respondents who expect the spread of small-scale energy to cause a reduction in revenues between now and 2030. 59% Those who say the biggest stress on their networks' capacity will come from people installing solar panels and battery storage in homes. €58bn Estimated cost to distribution networks of reinforcements for new forms of generation. 54% The percentage who expect to reach max capacity for hosting distributed generation within the next 10 years. 5% have reached max capacity already. story by NUMbErs Seven days... National media Energy supplier profits at an all-time high Big energy suppliers' profit margins hit a record high last year as they failed to pass on wholesale cost savings to their customers, according to figures that are likely to fuel support for a price cap. The combined profits of British Gas, EDF Energy, Eon, Npower and Scottish Power – five of the Big Six suppliers – rose by 7.8 per cent to almost £1.1 billion in 2016, analysis of company accounts by Lazarus Research shows. The Times, 8 May Welcome to the dark side of the moon The first total solar eclipse to darken US skies in a generation has forced utilities to draw up contingency plans for an electric grid increasingly powered by the sun. A giant shadow moving west to east on August 21 will temporarily remove "a large amount of photovoltaic resources" from the country, a regulatory body concluded last week. California's grid operator on Monday estimated the eclipse would boost its net demand by 6,000 megawatts – enough power for the city of Los Angeles, as solar output nosedives. Financial Times, 2 May Flagship smart meter scheme faces IT blip Millions of smart meters installed in British households under the government's flagship scheme may need to be replaced due to an IT bungle. For the first time major energy suppliers have admitted that some of the eight million "first- generation" smart meters fitted in households are incompatible with a new national communications network, which links their systems to the devices. The Telegraph, 5 May Suppliers may team up to tackle smart rollout E nergy retailers are considering if a collaborative approach to the smart meter rollout may help them overcome cost pressures arising from the national scheme, Utility Week has learned. Rob Doepel, an energy industry expert at consultancy EY, said the company is "talking to senior stakeholders – budget holders, and heads of smart and above" – about how a collaborative approach might be arranged. He explained that stakeholders are interested in collaboration because their profit and loss outlook has been "hit hard" by the announcement that government will intervene in the market with an energy price cap. "For companies facing diminished scope for revenues and looking to shore up their balance sheets, the significant cost demands of smart are a big concern," he said. In addition, Doepel reasoned that a growing consensus that smart installation does not offer competitive advantage is opening the door to supplier alliances. "There is a so‚ening of a mindset that smart meter installation offers any opportunity to differentiate from your competitors," he explained. "The install is an enabler – differentiation comes post- installation, with new products, tariffs, time of use and so on." Doepel concluded: "If you accept that the opportunity to differentiate is post-install, then it frees up opportunity to talk about collaboration." EY's power and utilities advisory partner admitted that forming supplier alliances for smart deployment has been "taboo" to date, and that it faces "some blockers". He acknowledged that a mutually appointed MOP (meter operator) – contracted to deploy smart meters for a consortium of suppliers – would need to reconcile a wide range of meter types, and that this might cause problems around commissioning. He also said that exclusive contracts between individual suppliers and MOPs would need to be revisited. JG Analysis, p27 "With this tariff, we're tying our hands. Even if we wanted to use sneaky pricing, we can't." Greg Jackson, Octopus Energy chief executive, on the launch of its new, transparent "tracker" tariff

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