Utility Week

Utility Week 2nd March 2018

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

Issue link: https://fhpublishing.uberflip.com/i/947421

Contents of this Issue

Navigation

Page 2 of 31

UTILITY WEEK | 2ND - 8TH MARCH 2018 | 3 This week 4 | Seven days 6 | Interview Robert Symons, chief executive, Western Power Distribution, and chair, ENA 10 Utility Week Live 10 | Event The top ten technologies utilities identify as likely to disrupt their businesses 17 Policy & Regulation 17 | News Labour would keep Britain in the EU IEM 18 | Analysis Labour's plan to renationalise the water sector 19 | Chief executive's view Sara Venning, Northern Ireland Water 20 | Analysis Centrica fights its corner 22 | Analysis The winners and losers from Ofwat's service delivery report 24 | Market view Water sector service priority 25 Finance & Investment 25 | News Centrica to cut 4,000 jobs as profits slump 26 | Market view Short-term accountability 27 Operations & Assets 27 | Market view High impact data analytics 28 Customers 28 | News Ofwat urges clarity on use of public money 30 Community 31 | Disconnector GAS 26 | Market view Short-term accountability WATER 18 | Analysis Labour's plan to renationalise the water sector 19 | Chief executive's view Sara Venning, Northern Ireland Water 22 | Analysis The winners and losers from Ofwat's service delivery report 24 | Market view Water sector service priority 28 | News Ofwat urges clarity on use of public money ELECTRICITY 6 | Interview Robert Symons, chief executive, Western Power Distribution, and chair, ENA 25 | News Blackrock buys UK solar assets for £15m 28 | News Smart tariff could see customers paid ENERGY 17 | News Labour would keep Britain in the EU IEM 20 | Analysis Centrica fights its corner 25 | News Centrica to cut 4,000 jobs as profits slump 27 | Market view High impact data analytics Pitney Bowes: Make self service smarter and more engaging http://bit.ly/2nAa2rC CGI: Demand side flexibility in UK utilities http://bit.ly/2hrMapA Knowledge worth Keeping Visit the DownloaDs section of Utility week's website http://www.utilityweek.co.uk/ downloads Centrica's woes are a warning to us all The "Beast from the East" wasn't the only bitter wind blowing through the energy sector this week. Just days before the govern- ment tabled its long-awaited price cap legislation, British Gas owner Centrica announced plans to slash 4,000 jobs by 2020, mainly in the UK, as profits slumped by 17 per cent and customer numbers dwindled. Cynics could be forgiven for looking at the timing and wondering if the supplier is up to something here. One or two have suggested the company, which has pointed to the majority of the job losses being outside the South East, may be engaging in a spot of "energy brinkmanship" with ministers, who will not have expected to see "UK jobs to be axed" headlines so soon aer their much-vaunted move on market intervention. But that would be going too far. The tough operating environment for UK energy suppliers is all too clear, and Centrica is three years into a major transformation programme that will see total job losses of 9,500. Its poor end of year results – which chief executive Iain Conn put down to a "weak" close to 2017 and "intense" competition – were always going to be painful for the company, which is in the process of reconfiguring its business. The scale of the cuts may also be explained by Centrica's busi- ness model. To be the market leader is not always an advantage – Centrica is hidebound by legacy systems and established processes that give it a higher cost base than younger, more nimble rivals. Clearly there was fat still to cut. Investing in more technology and simplifying processes is set to help the group reduce annual costs by £1.25 billion by 2020, £750 million of which it has already achieved. But how much more cost can the market's major players take out of their businesses? Ministers should be mindful of the law of unintended conse- quences. The squeeze on suppliers is ostensibly designed to benefit customers – but if market leaders such as Centrica are forced to scale back all discretionary spend, vulnerable customers may suffer alongside the company's employees. And these job cuts may not be the last. As the price cap legisla- tion begins its journey through parliament, suppliers are facing the fact that they simply may not be able to charge a market price. Something's got to give. Suzanne Heneghan, associate editor, suzanneheneghan@fav-house.com Leader Suzanne Heneghan

Articles in this issue

Links on this page

Archives of this issue

view archives of Utility Week - Utility Week 2nd March 2018