Utility Week

Utility Week 22nd September 2017

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UTILITY WEEK | 22ND - 28TH SEPTEMBER 2017 | 3 This week 4 | Seven days 7 Policy & Regulation 7 | News Clark ups pressure on Ofgem over price cap 8 | Lobby Party conference season preview 10 | Analysis What does Ofwat really mean by 'resilience in the round'? 12 | Analysis Responses to Ofgem's RIIO-2 consultation 14 | Market view Taxing questions for shale exploration 15 | Opinion Laura Sandys 16 Finance & Investment 16 | News Ofwat chief rejects cost of capital fears 17 | Analysis Challenges abound for EDF 18 | Analysis The latest round of CfD auctions 20 | Analysis Offshore wind comes of age 22 Operations & Assets 22 | High viz Severn Trent's Roundhill plant 23 | Expert view Ordnance Survey 24 | Market view The thirsty planet 25 | Market view Cyber security essentials 27 Customers 27 | News Water firms urged to help vulnerable more 28 | Market view Educating about energy efficiency 30 Community 31 | Disconnector GAS 8 | Lobby Party conference season preview 14 | Market view Taxing questions for shale exploration WATER 10 | Analysis What does Ofwat really mean by 'resilience in the round'? 16 | News Ofwat chief rejects cost of capital fears 22 | High viz Severn Trent's Roundhill plant 24 | Market view The thirsty planet 27 | News Water firms urged to help vulnerable more ELECTRICITY 7 | News Smart charging needed for EVs 17 | Analysis Challenges abound for EDF 18 | Analysis The latest round of CfD auctions 20 | Analysis Offshore wind comes of age ENERGY 7 | News Clark ups pressure on Ofgem over price cap 12 | Analysis Responses to Ofgem's RIIO-2 consultation 15 | Opinion Laura Sandys 28 | Market view Educating about energy efficiency Pitney Bowes: Make self service smarter and more engaging http://bit.ly/2nAa2rC 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 'Resilience in the round' has real bite Ofwat has challenged water companies to square up to their worst imaginings of what might go wrong for their businesses and build holistic resilience strategies that address corporate, financial and operational risks. It's a broad definition of resilience which has unnerved some sector leaders, with worries privately expressed that Ofwat is asking companies to encompass too much in its approach and setting the bar for resilience in PR19 business plans too high. Some companies do have cause to worry. Look at Ofwat's com- pany monitoring framework assessment for 2016 and it's clear that some companies will struggle to deliver the corporate resilience Ofwat is asking for. The regulator expressed disappointment with six companies last year for their shortcomings on board govern- ance. And when it comes to financial resilience, again Ofwat saw significant room for improvement on strategic points – such as tax transparency – but also business fundamentals, such as reporting consistent and robust data. Then too, there are new and rising resilience threats for water companies. Cyber-crime and fraud are now the most prominent types of crime in the UK, and the increasing incidence of extreme weather events has caused a realisation that traditional methods of relying on historic climate data to define the need for resilience investments in infrastructure are no longer fit for purpose. These changes and rising expectations will push water compa- nies to develop new skills and expertise for creating robust plans – not only to prevent resilience risks from arising, but to respond, recover and learn from incidents that, almost inevitably, will come to pass. Getting these skills in place in time for the next price review (which offers no glide path for companies to ease in to meeting performance commitments) is a big ask. But Ofwat has shown little inclination to pander to complaints about its broad and demanding approach. The Water Act 2014 upped the ante on the regulator to show that it is taking tangible action to make the water sector better prepared and able to cope with mani- fold and interconnected threats from climate change, population growth, malicious attacks and unexpected financial implosions. The regulator has taken resilience in the round to its heart and, as Cathryn Ross told companies last week, delivering this is now "no more or less than a water company's job". Jane Gray, Deputy editor, janegray@fav-house.com Leader Jane Gray

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