Utility Week

UTILITY Week 26th May 2017

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

Issue link: https://fhpublishing.uberflip.com/i/827637

Contents of this Issue


Page 10 of 31

UTILITY WEEK | 26TH MAY - 1ST JUNE 2017 | 11 Policy & Regulation This week More competition 'welcome', says Karam True customer choice will depend on water trading developments, says chief executive T he new chief executive of Bristol Water, Mel Karam, has said he would person- ally "welcome" the introduction of domestic water retail competi- tion. Speaking at Utility Week Live, Karam responded to an audience question about his views on opening the domestic market. "I don't think it is inevitable," he said, "though I personally would welcome it." Karam explained that his enthusiasm was based on his 25-year career in the energy sector before join- ing Bristol. He said the "benefits" that separation of monopoly infrastructure and competitive retail activities had brought over "decades" in the energy sector "are a really good lesson for water". Karam allowed, however, that there are currently differences between the energy and water sectors that would need addressing before full competitive benefits could be realised in the latter. "In energy," Karam said, "there is a commodity – electricity and gas, energy – that can be traded. "In water, as we speak today, there is not a priced commodity that can be traded. So there could be com- petition in the services provided to customers – which is in itself valuable – but to take it to the end game, which is to provide customers with a true choice about where they buy their water from and the retailers being able to trade in water, we need other elements in place, includ- ing the opening up of upstream water trading." JG WATER Election means more certainty for water The general election is a "good thing" for the water sec- tor because it should bring certainty, according to the chief executive of Southern Water. "The one thing that helps business to operate well is certainty, and that's what we're looking for," Ian McAulay told Utility Week. "The changes that we're seeing are broadly posi- tive. We have to try and get the certainty into things now." Most of the focus in the run- up to the election has been on the energy sector, but the Labour party has said it will re-national- ise the water sector if it gets into power, creating nine new public bodies to run the water and sewerage system in England. The water industry defended its privatisation, saying water bills would be 30 per cent higher if it had remained in public ownership. GAS Settlement system to go live in June Project Nexus, the replacement for Xoserve's ageing gas settle- ment system, has been cleared for go-live on 1 June by an indus- try steering group. The new platform has been designed to the accommodate the large volume of data gener- ated by smart meters and to remove distortions in the current gas settlement arrangements that are hindering competition. It also aims to improve the reliability of switching arrange- ments by bringing the systems operated by independent gas transporters into a single cen- tralised system. ENERGY Lib Dems back solar PV and onshore wind The Liberal Democrats have set out proposals to restore govern- ment backing for onshore wind farms and solar PV. The Lib Dem election manifesto says the party would reverse the Conservatives' with- drawal of support for the two low-cost renewable technologies if elected. The backing for wind energy projects "in appropriate loca- tions" is one of the measures with which the Lib Dems aim to generate 60 per cent of electricity from renewable sources by 2030. The manifesto also backs investment in energy storage, smart grid technology, hydrogen technologies, offshore wind and tidal power. The party says it would introduce a Zero Carbon Britain Act that would include legally binding targets to reduce the UK's carbon emissions by 80 per cent by 2040 on the way to their total eradication by 2050. Bristol Water CEO: give households a choice It would be "an unreasonable ask" to expect the regulator to continue predicting market developments over eight years, according to the chief executive of UK Power Networks (UKPN), Basil Scarsella. "On balance, I would predict that ED2 will be somewhat shorter than ED1," he said. ED2 is the next regulatory cycle under the RIIO frame- work for electricity distribution companies. Speaking at Utility Week ENERGY Next regulatory cycle will be shorter, predicts UKPN boss Live in the Keynote conference, Scarsella set out his vision for the transformation of UKPN in an uncertain environment. He said that transformation is being driven by a sustainability agenda, which makes the other elements of the "trilemma" more difficult to balance. He also said that uncertainty around the take-up of electric vehicles (EVs) and consumer charging behav- iours for these, as well as the role of storage and the impact of technologies like blockchain, meant that "though we will try to predict the future, we will almost certainly get it wrong". Asked if he thought this meant the regulatory cycle for networks needed to change, Scarsella said he did. He said: "We'll have EVs, storage, renewables – at a domestic level as well as an industrial and commercial level – there's a lot of uncertainty. For the regulator to try and predict the future in a regulatory regime [of eight years] – I think it is an unreasonable ask… ED2 has either got to be shorter or there will be so many re-openers [to regulatory settlements] and uncertainty mechanisms that it will be difficult to manage." He did, however, add that eight years was the "right length" for the current regu- latory cycle. He also said he thought Ofgem's uncertainty mechanism's for dealing with the impact of changes like the introduction of smart metering have so far proved effective.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 26th May 2017