Leader: Why 2016 was only a rehearsal for 2017
2016 will be a year for the history books – and there are many who will be glad to see it consigned to the past.
The past 12 months have taken their toll on a host of our best-loved celebrities as well as the cosy certainties of the establishment in a neo-liberal democracy. And in the utilities industry there have been some big milestones too: the final investment decision on Hinkley Point C; shadow market opening for non-domestic water supply and its attendant mergers and acquisitions; a range of key executive resignations and appointments; the launch of the DCC system for smart metering; and the publication of energy market remedies by the CMA.
These events and more have punctuated and defined the year. But although they are all significant moments in their own right, most, if not all, are simply trigger points for far greater challenges to come.
2017 will put utilities of all stripes under pressure to change, and to deliver improvements in service as demands for transparency, innovation and customer choice increase. Companies will require humility, determination and conviction if they are to thrive in this environment of high expectation and short patience.
Here are a few key moments likely to test the resolve and strategy of utility companies:
- Full market opening for the non-domestic water market After a dress rehearsal period, the show will kick off in earnest in April.
- Go-live for P272 and half-hourly settlement Another April treat, this should open the door for innovation in time-of-use tariffs for business energy customers. More clarity is also due in early 2017 on the introduction of half-hourly settlement for domestic customers.
- CfD auction – Following a two year hiatus since first CfD auction, BEIS has promised to hold a new round in early 2017. It hopes to incentivise a new generation of low-carbon generation investment.
- Ofgem’s decision on market changes to enable smart and flexible energy systems After a call for evidence, the regulator will reveal its proposed answers to key energy system challenges, including barriers to energy storage deployment and the future of the system operator role.
We hope all our readers enjoy a restful festive season to prepare themselves for these events, and many more, that 2017 has in store. We will be back on 13 January 2017.
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- Gas supplier granted water retail licence Ofwat grants water supply and sewerage licence to gas firm subsidiary