10/10/2019: Laying foundations

I am hoping that at least some of you will have noticed I haven’t issued a weekly update for a short while. There have been regular weekday posts of local news on energy and the environment at https//newangliaenergy.uk as well as my regular @newangliaenergy tweets, and I did manage a blog on the outcomes of CfD allocation round 3 (AR3), but that’s been about it. The reason is simple – I have been rather busy.

Other than AR3, I guess the standout events have been the positioning of the major parties to upgrade policy to try to deliver net zero. These have been well covered in the industry press and each has attracted plaudits and brickbats in equal measure, but all appear to be work in progress. None though in my view capture the more holistic feel of the cross party New Green Deal (NGD) initiative., though Labour seems to be trying to match the level of ambition in the NGD by saying it too will reach the new target by 2030.

Probably the next step is to do a compare and contrast piece to develop a more complete framework and distil the highest common factors and best elements across these. But there will continue to be finessing of the various proposals, especially around integration of low-carbon heat and transport and around a more complete set of policies for energy use in the built environment. The scale of the challenge has also increased as the Committee on Climate Change also wants to see international aviation and shipping included within the target.

As ever there is a lot of news. Probably the main policy activity was around the consultation on the Future Homes Standard and a new commitment by BEIS to a conceptual design for a new type of nuclear fusion reactor. There is also to be an additional £1bn of support for the automotive industry and a National Bus Strategy. Grant Shapps has also indicated he is to consider bringing the close out date for ICEs from 2040 to 2035.

But somewhere amongst all this jockeying for position, the UN Climate Conference was a bit of a damp squib, though the PM did announce a new £1bn fund to aid tackling climate change in developing countries. International climate finance is also to be doubled over the period 2021-25 to £11.6bn.

Late last week there was some important non-news. This related to an article by Reuters that suggested a number of sources close to the European Commission were suggesting that a ruling on state aid clearance on the Capacity Market challenge by Tempus was close and that the commission was likely to affirm compliance. Let’s hope so. We will know for sure sometime later this month.

Turning to regulation, Ofgem issued its vulnerability strategy, which disappointingly showed a large increase in numbers of customer on the Priority Services Register but also increases in the number of customers in debt. It is also considering action against four suppliers who missed the deadline for making buy-out payments under the RO and who had not provided sufficient reassurance that they would pay by the late payment deadline, owing close on £15mn. With several supplier failures over the 2018-19 year before any further shortfall, it is looking as if there will be mutualisation for the second year running. It is not surprising then that Citizens Advice is calling for legislation to require suppliers to make more frequent payments.

The regulator also released its latest State of the Market report for 2019, which has gone into the rainy-day reading pile. I will write something further on this shortly but at a glance there is a lot in it.

On the industry front, the E3C interim report on the 9 August power cuts appeared late last week, but seems to hold few surprises. The main hook going forward is probably whether frequency response protocols are still fit for purpose. A final report is set to be submitted to the Secretary of State at the beginning of November.

My main focus has been adding further definition to the Smarter Norwich project. We are now looking at a larger project and possibly 300 installs of the Very smart energy assistant. We are hopeful that Norwich Business School at the UEA will provide research support, and scaling to this level will allow us to take a more detailed look at a wider range of customer archetypes. We are also now contemplating the formation of three different engagement groups with different drivers and incentives, and also plan the formation of an oversight panel to help guide the research and digest the findings. The first meeting of the group will take place in November.

P379 – my meter splitting change proposal under the BSC – continues to progress too. The ninth working group meeting took place on 17 September and Neil Barnes and Kevin Baillie of Ofgem gave an overview of some of the key regulatory considerations, most of which seemed at least to me addressable. Most importantly there is now a worked up technical solution that seems to fit with the parallel work on P375 and secondary BMUs.

I am also scoping some other initiatives. One is a workshop in Norwich with Low Carbon Homes on energy efficiency in the built environment and retrofitting. This is likely to happen early in the new year.

Additionally I am working with Simon Skillings, Laura Sandys, Catherine Mitchell of Exeyer University and Jeff Hardy from Energy Rev on a London workshop around the legal framework and governance that needs to be established to deliver net zero. This is a big issue now and we are developing some very interesting thoughts!

I am hoping to get back a weekly report next week. Thanks for reading.