Utility Week

UTILITY Week 30th June 2017

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UTILITY WEEK | 30TH JUNE - 6TH JULY 2017 | 15 Policy & Regulation A host of new players in the power system poses a risk to its stability if the government does not help co-ordinate their integration, experts have warned. Commenting on the second phase of the government- sponsored Future Power System Architecture (FPSA) project, its delivery board chair Simon Harrison said that the power sector is evolving rapidly as ENERGY Stability of power system threatened by proliferation of new players diverse new participants and technologies emerge. But he warned: "Without the necessary co-ordination, there is a real risk that these developments will have adverse impacts on the power system… There is currently no shared vision or even shared understanding of how to bring all the elements together in a way that addresses whole- system issues and is efficient, effective, secure and reliable." Harrison called on the government to step in and become a "catalyst" for change. The first phase of the programme identified 35 functions across eight broad categories that the power system of the future will need to fulfil. Among other things, the second phase seeks to identify This week Ofgem mulls how to deliver flexibility Regulator may want to ape private sector in 'try- ing things that aren't perfect' O fgem has not yet "figured out" how best to deliver the flexible regulation needed keep up with the accel- erating pace of change in the power sector. The regulator may want to take lessons from the commer- cial world in becoming more agile and adaptable, according Ofgem senior partner for networks Jonathan Brearley. "If I was to go back, say, ten years, we had very long- term consultative processes that would last years to get to an answer we thought would be embedded and would last forever," he said. "I don't think we're in that world now." Brearley spoke at the launch of the second phase of the Future Power System Architecture (FPSA) pro- gramme, which highlighted the extent and speed of the transformation the power sector is undergoing. The programme identified a rigid regulatory framework as a key barrier to delivering the right kind of change. "We are all going to have to be adaptive as this change occurs and I think that probably means – although we haven't figured out the how yet – us as Ofgem becoming more adaptable to the changing world and responding more quickly." He said this could mean "trying things that aren't perfect". Brearley was a key architect of Electricity Market Reform while at the Department of Energy and Climate Change and has recently returned to the public sector aer a stint running his own consultancy firm. With this experience in mind, Brearley said Ofgem should consider copying the way private sector firms oen operate, which is to "just set something up and get it going and adapt it as you go along". TG ENERGY NAO slams Hinkley Point C nuclear deal The government finalised the Hinkley Point C deal last year despite its own value for money tests showing the economic case for the new nuclear plant was "marginal and subject to significant uncertainty", parliament's spending watchdog has concluded. The National Audit Office said the deal "locked consumers into a risky and expensive project with uncertain strategic and economic benefits". It added that "less favourable, but reasonable, assumptions" about future fossil fuel prices, renewables costs and follow-on nuclear projects would have resulted in the deal failing value for money tests. However, it also found that BEIS's capacity to take alternative approaches that could have reduced total cost and offered better value for money for consumers was limited once key commercial terms had been agreed in 2013. ENERGY BEIS invests in heat innovation projects The Department for Business, Energy and Industrial Strategy (BEIS) is to invest £35 million in two heat innovation projects based on smart systems and hydrogen gas as alternatives to conventional gas-grid connected domestic heating. The Energy Systems Catapult has been granted £9.8 million to develop local energy plans with the help of local authorities and promote low-carbon heating schemes in the UK. Newly appointed BEIS minister Claire Perry also confirmed £25 million for research into the possible use of hydrogen for heating. The programme will develop and test a range of appliances and examine whether it is possible to deliver the gas through the UK's domestic pipes. WATER Water firms need robust data strategy Water companies must be ambitious in the way they use data to benefit customers and ensure they have a robust data strategy in place, Ofwat has said. Ofwat chief executive Cathryn Ross said data presents "massive opportunities" for a sector that "is sitting on an almost universal property data set because it supplies services into almost every household and business property in the country". Speaking at the launch of Ofwat's Unlocking the Value in Customer Data report, Ross said companies had to implement a good data strategy, "be smarter" in the way they use data, and ensure their data is accurate, high quality and secure. "Good quality, well-understood and secure data builds a strong foundation from which to build a data strategy," she said. Brearley: time is of the essence the main barriers to the delivery of these functions and to create a process to overcome them. A series of reports produced for the second stage state that: "The highest priority barriers are those associated with existing industry governance processes, the regulatory framework, the commercial framework and the extent of technical change required."

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