Utility Week

the next 15 years, respondents expect disrup on on a significant scale, ra ng it at 7 out of a possible 10. And disrup on arising from regulatory uncertainty is high in that mix. Commen ng on the findings, John Parsons, networks por olio manager at industry trade body Beama, says: "What is very clear, and shown in the survey, is this is a me for government and the regulators to be very transparent about which path they are taking and create the levels of confidence the industry needs. It is not a me for kicking the can further down the road. Be er to take a li le longer over a good decision now than to fudge the situa on." At U lity Week Live 2018 (22-23 May), disrup on is the headline theme. Held at the NEC in Birmingham, the exhibi on and seminar sessions will gather industry intelligence and spark debate on themes including the Internet of Things and other game-changing technologies, u li es innova on and new solu ons to serve customer interests and opportuni es for applying new, collabora ve ways of working in the sector in key areas such as streetworks. Regulatory change will sit at the core of the disrup on debate and insight at the event, as well as in the build-up to it. In the third of a five-part series detailing the responses of more than 700 u li es execu ves to our disrup on survey, we reveal the top five ways in which respondents believe regulatory disrup on is manifes ng in the sector. 1. WHAT: BREXIT What's the deal: Brexit places a ques on mark over the UK's con nuing par cipa on in the EU's internal energy market (IEM), the Emissions Trading System and Euratom and has par cular ramifica ons for the development of the all-Ireland single energy market. Why it ma ers: In our survey, Brexit caused most concern among supply chain respondents (6 out of 10 on average). This is compared to energy genera on and retail respondents, who put it at 5.8 out of 10, water wholesalers and retail, who put it at 5.5 out of 10, and energy networks, who rated it 4.9 out of 10 on the disrup on scale. A key reason why the complexity and far-reaching impacts of Brexit may prove disrup ve for u li es is that their overall demand on government me means ministers are swamped with decision-making requirements and the demands of lobby groups. The sheer volume of work involved within a limited me scale runs the risk of key technical requirements and impacts on regulatory and market mechanisms being overlooked or brushed aside. Top of the pile of u lity concerns in the Brexit process is the future of the IEM and the way in which the UK's growing interdependence with wider European energy networks will be managed in future. The UK's connec on to the IEM is physically manifested in the form of the 4GW of interconnectors that link the UK with its EU neighbours. Another 7.7GW of interconnector capacity is currently being developed. Experts agree that the interconnectors will con nue to be used to trade electricity and gas post-Brexit. But there are doubts about investors' willingness to invest in new projects amid the regulatory uncertainty surrounding the future of the UK's rela onship with the EU. In addi on, departure from the IEM means that the UK will not benefit from reforms currently being developed, such as intra-day trading on the interconnectors between different EU member states, which will boost networks' flexibility even further. Furthermore, if regula ons diverge between the EU and the UK, the UK's ability to trade energy with the EU will be further complicated. Energy UK is keen for Britain to remain a par cipant in both the IEM and the EU's Emissions Trading System, the world's largest, for a period a er Brexit. Brexit also looks set to end the UK's membership of Euratom, which currently governs the safeguarding of the UK's nuclear industry as well as cross-border movement of atomic labour and materials. Our survey found government ac ons are believed to be crea ng both posi ve and nega ve disrup on – some respondents said there was a lack of focus due to Brexit, but others said the government would provide both the nudge factor and regulatory push to alter consumer behaviour and the usage and storage of electricity/launch of new business models. It's better to take a little longer over a good decision now than to fudge the situation I N A S S O C I A T I O N W I T H UTILITY WEEK | 6TH - 12TH APRIL 2018 | 7 I N A S S O C I A T I O N W I T H

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