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Utility Week’s policy correspondent David Blackman discusses the implications on the utilities sector of Boris Johnson’s plan for a “green industrial revolution”. He assesses the winners and losers from the speech, as well as the areas where question marks remain.
Analysis
Yorkshire Water has accused Ofwat of resorting to "populist" tactics, with an "unrestrained attack" on foreign investors in the sector. The company warned that the regulator risks undermining trust in the system and driving away investors. The accusations are included in the latest submission to the PR19 appeals.
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Smart meters could be used to monitor energy usage patterns to help the most vulnerable continue to live safely in their homes, a new study has found. Smart Energy GB’s Smart Future of Healthcare report, which was conducted by independent thinktank 2020health, found smart meters could be used to monitor consumer behaviour for signs of deviation, which may indicate there is a problem.
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Severn Trent will be taking on 500 young people over the next year under the government's social mobility scheme, to offer six-month skills and training job placements for 16-24 year olds facing long-term unemployment.
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The government is planning to raise the threshold for mutualisation under the renewables obligation (RO) after a review deemed the current arrangements not fit for purpose, Utility Week can reveal. In addition the Department for Business, Energy and Industrial Strategy (BEIS) says it is considering changes to the way the mutualisation amount is determined in England and Wales in order to lessen its impact on suppliers.
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Former Ofgem chief executive Dermot Nolan has told Utility Week that Boris Johnson’s green plan has “shone the spotlight even more brightly on RIIO-ED2”. He pointed to the move to bring forward the ban on petrol and diesel car sales to 2030 as having major ramifications for DNO’s business plans for the next price control and said there will “inevitably be tensions” around the levels of investment required.
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Industry figures have told Utility Week that if the government is to achieve its ambitions on net zero, energy codes must be streamlined while Ofgem should be given an explicit duty to push forward the decarbonisation of the energy system.
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The government needs to set out a strengthened policy framework if its ambition of installing 600,000 heat pumps a year is to be achieved, industry voices have warned. Eon chief executive Michael Lewis said the target will be a “massive but necessary step” towards ending reliance on gas for heating.
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United Utilities has created a town-wide smart water network in Macclesfield that incorporates AI to learn from patterns in the network data to detect leaks before they spring
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The government has pledged to set out details next year of new mechanisms to help both its target to dramatically increase the uptake of heat pumps and the UK’s fledgling hydrogen and carbon capture industries. The details are included in a policy paper giving further clarity on the prime minister’s 10-point plan for a green industrial revolution.
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SSE’s chief executive has told Utility Week the company is “moving forward” with a full or partial sale of its 33.3 per cent stake in gas distribution network SGN. Alistair Phillips-Davies was speaking on the back of the company’s half-year results.
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In our latest round-up of appointments across the utilities sector, Ofwat has named four non-executive directors; SSE welcomes a new managing director; the government confirms its net zero business champion and emerging energy supplier Rebel beefs up its team ahead of market launch.
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Green infrastructure investment must double from current levels, to £40 billion per annum over the next decade, to reach the UK’s decarbonisation target. This is the conclusion of research by PwC, which has also warned that half of the investment opportunities identified would currently be unable to access low-cost capital because they would be considered too high risk. It has called for government to urgently identify mechanisms to ensure this funding is forthcoming.
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