Policy & regulation

Latest updates and analysis on how government and regulators' decisions will impact the sector 

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Ofgem has confirmed another double supplier failure, taking the total number of exits via the Supplier of Last Resort (SoLR) process so far this year to 26. The collapse of Orbit and Entice Energy means November 2021 is the worst ever month for market exits via SoLR, with a total of 10 failures.
News
The special administration of Bulb will be backed by a £1.7 billion government loan. Approving the unprecedented use of the special administration regime, a judge said state backing was of "existential importance" to continue supply to Bulb's 1.7 million customers.
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Although water companies risk bearing the brunt of public anger over sewage spills, the government has shown little appetite for allowing them the level of investment needed to tackle the issue effectively, Utility Week has been told. Ministers must now “take off the shackles” following the passage of the long-awaited Environment Act.
Analysis

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The Heat & Buildings Strategy included encouraging signs for advocates of both electrification and hydrogen but experts have warned that the ‘buildings’ element of the blueprint remains alarmingly vague. David Blackman looks at the role of energy efficiency in decarbonisation of heat and where further support is needed.
Analysis
The government should consider picking up the tab for Last Resort Supply Payment claims to spread out the costs of the industry levy and protect consumers from a sharp increase in energy bills next year, Energy UK’s deputy chief has stated. Audrey Gallacher, who also serves as the trade body’s director of policy, made the suggestion after Bulb became the first supplier to enter the special administration regime earlier this week.
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Customers' understanding of the role they can play in lowering carbon emissions must be addressed if utility companies want to get them on-board for the net zero journey. A panel of experts at the Utility Week Adapting for net zero conference said utilities must be assertive and take the time to explain the benefits to consumers of changing their behaviour to lower emissions.
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Latest in Policy & regulation

Ofgem has confirmed plans to temporarily expedite Last Resort Supply Payment claims to relieve pressure on the finances of suppliers taking on the customers of failed rivals, whilst facing high wholesale energy prices. The regulator invited Suppliers of Last Resort appointed since 1 September to submit claims by 6 December to begin receiving payments from April.
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MPs have criticised distribution network operators for poor communication with customers suffering from power outages as a result of Storm Arwen, including providing inaccurate reconnection times. Speaking during an emergency debate in the House of Commons, business and energy secretary Kwasi Kwarteng said it is “clearly unacceptable” that some customers had to wait for up to two hours to get through to call centres over the weekend.
News
Unless the energy market framework is reformed, the UK’s carbon reduction goals will require a “massively expanded” role for government with knock on inefficiencies, a new report co-authored by a former top energy official has warned. The study from the Tony Blair Institute for Global Change said generators' growing reliance on the Contracts for Difference mechanism will mean they become “less and less responsive” to demand because of its in-built incentive to produce as much power as possible.
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To mark Fuel Poverty Awareness Day, Energy UK’s Simon Markell writes for Utility Week about how energy retailers are seeking to mitigate the full impact of rising wholesale costs on customer bills. He implores the government and Ofgem to help the sector ensure costs to consumers are kept down and the scourge of fuel poverty is not exacerbated.
Opinion
Laurie Heyworth, policy analyst for emerging technologies at Renewable UK, outlines the trade body’s response to the government’s Hydrogen Strategy and says support schemes must distinguish between green and blue hydrogen to ensure the former is not “crowded out” by the latter.
Opinion
The Department for Business, Energy and Industrial Strategy (BEIS) has “persistently failed” to learn lessons from previous energy efficiency schemes, according to the latest damning report into the botched Green Homes Grant voucher programme. Despite retaining personnel with experience of previous initiatives, the Public Account Committee said the scheme suffered from many of the same issues and questioned how the department “maintains and uses its corporate memory”.
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Suppliers which have gone out of business as a result of the recent escalation in gas costs cannot blame the price cap because they should have been adequately hedged, the energy minister has argued. Appearing at the House of Lords Industry and Regulators Committee, Greg Hands said suppliers who were properly prepared have “clearly been in a much better position to ride out the big increases in global gas prices.”
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Scottish Power has been confirmed as the new supplier for the more than 70,000 customers of recently failed retailers Entice and Orbit Energy. Scottish Power's chief executive of UK retail Andrew Ward said the recent collapse of a number of companies shows the need for reform in the energy market to ensure those participating in the sector do so in a way which is "fair and transparent for customers".
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Energy will be part of Ed Miliband’s remit in his reshaped portfolio as shadow secretary of state of climate change and net zero. Labour leader Sir Keir Starmer announced on Monday (29 November) that as part of his wide-ranging shadow cabinet reshuffle, Miliband will move from shadow secretary for business, energy and industrial strategy to take the new role.
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The electricity transmission arms of National Grid and SP Energy Networks (SPEN) have agreed to pay £158 million in redress for a two-year delay to the £1.2 billion Western Link project – a subsea power line connecting Scotland and Wales. Ofgem said the delay to the 2,250MW high voltage direct current link prevented renewable generators in Scotland from exporting electricity to England and Wales when the transmission network was congested, raising costs for consumers.
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The UK’s net zero ambitions are at risk of being missed if the government does not cover the whole cost of home upgrades in grants to poor households, a report by two charities has warned. Speaking to Utility Week the NEA's head of policy and public affairs Matt Copeland used heat pumps as an example of an area where vulnerable households could benefit from more funding in addition to the £5,000 grants promised by the recently announced Boiler Upgrade Scheme.
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