Policy & regulation

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

Editor's picks

Brexit has pushed the UK to the “back of the queue” for developing interconnectors, Sir Ed Davey has claimed. The former energy and climate change secretary of state said that he “never found any European rules that got in the way” of the UK’s renewable energy push.
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After a bruising week for the energy retail market, in which wholesale power prices hit dramatic new heights, more than 500,000 customers saw their supplier exit the market and a major price comparison website was forced to suspend its energy services, the real fear is that we have yet to see the worst. Adam John looks at where the energy retail sector goes from here.
Analysis
The third energy minister in nine months has been unveiled, with Greg Hands taking over the brief from Anne-Marie Trevelyan. Utility Week's policy correspondent David Blackman looks at why the appointment will probably be greeted with less disquiet in the sector than that of his predecessor.
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Ofgem has made clear that decarbonisation is at the heart of its strategy but without updated guidance from government, how can it tackle the trade-offs net zero will inevitably present? Utility Week asked experts in energy regulation what they want to see in the promised strategic policy statement (SPS) from government, as well as where unintended consequences could lie and if there is a better way to provide clear direction on Ofgem’s role in a future energy system.
Analysis
Macquarie has signaled its determination to plough capital into the water sector's whipping boy Southern Water as it continues its struggle to "become brilliant at the basics". Industry analyst Nigel Hawkins examines the bid and its background.
Analysis
Utility Week policy correspondent David Blackman examines the government’s call for evidence on how the Capacity Market could be redesigned to sift out high-carbon fossil fuel generation and prevent it from being baked into the energy mix for years to come.
Analysis

Latest in Policy & regulation

The government has said it is ready to implement a “special administrator” in the event of a large energy supplier exiting the market. The Department for Business, Energy & Industrial Strategy issued a statement last night following talks with senior energy executives over the impact of soaring wholesale power prices. Secretary of state, Kwasi Kwarteng, is to meet Ofgem this morning “to discuss the issues raised by the industry in more detail” before convening a roundtable “to plan a way forward”.
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Ofgem has been urged to make “bold decisions” to prioritise reinforcement of the grid in areas with a high potential renewable energy yield and ensure transmission charges are equally shared across the UK.
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National Grid has confirmed that the 1GW of the IFA interconnector, which was damaged by fire this week, will be unavailable until 27 March 2022. In more positive news, Britain and Norway have signed a bilateral treaty on electricity interconnection, ahead of the expected commissioning of the 1.4GW North Sea Link between the two countries next month.
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Anne-Marie Trevelyan has left the energy portfolio in Boris Johnson’s reshuffle of the Cabinet. However, No 10 Downing Street confirmed Kwasi Kwarteng and George Eustice retain their roles as secretaries of state for respectively Business, Energy & Industrial Strategy (BEIS) and Environment, Food & Rural Affairs (DEFRA).
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Average power prices over the past two weeks have been eight times higher than the average in 2019, according to data from EnAppSys. Phil Hewitt, director of the energy market analyst, told Utility Week further supplier failures were inevitable and that retailers should be lobbying Ofgem to give them some relief from the price cap. He said many suppliers had been far too relaxed about actively trading in the intraday and advanced markets.
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Avro Energy has been ordered to immediately provide Ofgem with financial information or face enforcement action from the regulator. Ofgem said the supplier had failed to respond to two requests for information last month.
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The House of Lords has backed the introduction of new legal powers to force water companies to secure the separation of drainage and sewerage systems. Peers voted by 184 votes to 157 in favour of an amendment to the Environment Bill, which would place a legal duty on water companies to take all reasonable steps to ensure untreated sewage is not discharged into inland waters.
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Ofwat has approved 15 water resource schemes to progress on the next step to becoming a reality. The large-scale interregional plans see water being moved from areas with surplus to those in need of additional resources. These projects are being developed to be shovel-ready at the start of AMP8 in 2025
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Ofgem has confirmed two more energy companies are to exit the market, leaving more than half a million customers for suppliers of last resort to pick up. People's Energy, a social enterprise formed in 2017, supplied 350,000 consumers, while Utility Point had 220,000 billpayers. An Ofgem executive told Utility Week the question of how to alleviate the intense pressures on the retail sector was now "a key point of discussion". 
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In our latest review of sector coverage in the national newspapers, there is analysis of last week’s surge in power prices. Meanwhile, UK ministers have been criticised over the number of meetings they have carried out with fossil fuel and biomass energy producers, and concern is raised about lack of investment in green infrastructure and jobs.
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