Utility Week

16 | 27TH OCTOBER - 2ND NOVEMBER 2017 | UTILITY WEEK Policy & Regulation This week SPEN denied £37m of innovation funding Ofgem says key technologies are already being used by other DNOs or being funded through RIIO Ofgem has turned down two applications by SP Energy Networks (SPEN) for a total of £36.85 million of funding through the Innovation Roll-out Mechanism (IRM). The regulator rejected the requests on the basis that the key technologies for the projects are already being used by other distribution network operators (DNOs) or being funded through RIIO. The purpose of the IRM is to help network operators deploy proven innovative technologies as part of their everyday operations. DNOs can submit applications for funding during one of two windows over the course of the RIIO-ED1 price control. The first window opened in May this year, with the next set to open in May 2019. Ofgem received four bids in the first window – one from UK Power Networks and three from SPEN – worth a total of £79 million (2012/13 prices). SPEN applied for £20.4 million to roll out a new strat- egy for inspecting and managing overhead power lines. The scheme would involve the digital mapping of its entire network using light detection and ranging (LiDAR) as well as risk-based data analytics and non-destructive pole testing. Ofgem denied the request aer being told by several other DNOs that they have already adopted LiDAR and data analytics as part of their maintenance routines. SPEN requested a further £16.45 million to deploy enhanced monitoring devices into 52 per cent of its large secondary substations, but Ofgem said the DNO already has funding within in its RIIO ED-1 business plan to install the devices in 12 per cent of the substations. TG WATER Firms failing to stop 'avoidable' pollution Water companies are contribut- ing to an "urgent environmental crisis" by failing to prevent "avoidable sewage" pollution in rivers, says a leading charity. WWF found that 40 per cent of rivers in England and Wales were polluted with raw sewage, with four out of five failing to achieve a "good ecological status". The con- servation charity said the number of healthy rivers in England has declined from 27 per cent in 2010 to 14 per cent in 2017. The findings came following a nine-month investigation into the sewerage system. WWF out- lined 1,902 pollution incidents reported by the nine water and sewerage companies operating in England alone – the first rise in such incidents since 2012. ENERGY Price cap could face legal challenge The big six suppliers could mount a legal challenge against the government's planned energy price cap, according to one of their chief executives. Eon UK chief executive Michael Lewis refused to rule out a challenge when confronted on the issue by former shadow energy secretary Caroline Flint at the Energy UK annual confer- ence last week. Flint said it was "a consider- able worry" that suppliers would take the fight to court in a move that she said "would be hugely detrimental to the industry". Lewis said he was not prepared to respond to a hypothetical ques- tion, adding: "I have no idea of what the price cap looks like: we will see what Ofgem proposes." ENERGY UK lacks a 'unique selling point' The UK lacks a "unique selling point" to ensure its continued participation in the EU's internal energy market (IEM), a top Swiss industry official has warned. Jean-Christophe Fueeg, head of international energy affairs at the Swiss Federal Office of Energy, was quizzed last week by the House of Lords EU energy and environment select commit- tee as part of its inquiry into the EU's energy security post-Brexit. He said Switzerland had already had to decouple its domestic energy market from the IEM because it was not a mem- ber of the EU's wider institu- tional framework – and that its participation was being chipped away. For example, he said Swiss firms had been excluded from the EU's emerging intra- day electricity trading market. Fueeg said he did not believe the UK had a USP that would force the EU to modify its hard- line stance on IEM participation. Blue sky thinking: needed to win IRM funding Political Agenda David Blackman "BEIS didn't want to be put on the spot about the cap" Energy UK held its annual con- ference last week across the road from the Houses of Parliament. However, the venue may as well have been on a different planet. Nobody from the Department for Business, Energy and Indus- trial Strategy (BEIS) even turned up. The no-show seemed doubly strange given that the event took place hot on the heels of two of the biggest energy policy moves in recent years – the publication of the dra price cap legislation and the Clean Growth Strategy. Maybe ministers didn't want to be put on the spot about their commitment to a cap, which has been put into doubt by reports that BEIS officials have briefed investors that the legislation won't ultimately be implemented. However, energy companies and ministers need to find a way to communicate in order to pre- vent the capping debate develop- ing a momentum that does last- ing damage to the industry and its customers. Getting together in the same room would help. Instead, it was le to a junior minister at the Scottish Office to fly the flag for the government. It fell to Caroline Flint, Labour's hammer of the utilities during her spell as Ed Miliband's shadow energy and climate change secretary, to make the case for the price cap. If BEIS ministers had turned up, they would have heard a note of barely concealed exasperation from the one big six boss who put his head above the parapet on the day. Eon chief execu- tive Michael Lewis was clearly frustrated that the message is not getting across that the solution to lower prices is better competition rather than price regulation.

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