That was the view of RWE Npower chief executive Volker Beckers, speaking at Marketforce’s “Future of Utilities” meeting yesterday.
Beckers said that to an outsider, the UK industry was one of the wprld’s most competitive with the cheapest gas and third cheapest electricity in Europe. But at the same time, “the appetite for reform has never been greater”. Reiterating comments that the ongoing Electricity Market Reform was trying to pull “too many levers” at once, he said an observer would see “A dozen different operations being performed on a surprisingly healthy patient.”
Speaking at the same meeting, Keith Anderson, chief corporate officer at Scottish Power, talked about one of the planned EMR mechanisms, the Contracts for Difference (CFDs) that will replace the Renewables Obligation. Anderson said the for his company, a major wind developer, “The RO worked well. We liked it, it was relatively clear and transparent, and it’s easy to see how it is passed through to consumers”. The challenge for the government was that to make it worth causing the current hiatus in investment, it must “make the new mechanism better”. But he said that was not easy. “It is taking longer than government intended and it is more difficult than it expected.” He warned the process could end up with “delay, confusion and compromise.”
Beckers had another warning about the way the costs of moving to low-carbon were being added to customers’ bills. He pointed out that it would eventually be necessary for consumers to switch to electricity for heating, and for vehicles. But most of the cost of low-carbon and energy efficiency measures would be added to electricity bills, and “more and more levies on electricity bills might make consumers choose gas instead” for their heating, making the switch to electricity more difficult.