Five things we learnt from Energy Spectrum | 655

A programme as complex as the smart meter roll-out was always going to be subject to significant challenges. Last week BEIS Committee Chair Rachel Reeves commented that the roll-out would not meet its 2020 notional deadline, echoing growing sentiment in the industry but, in this week’s Energy Perspective we suggest that the question now is not will the deadline be met, but rather what the impacts of are keeping it in place. 


There are, we find, arguments for both. Retaining the deadline would ensure installation rates are high, for example, while an extension that prioritises quality and allowing for a more measured roll-out would provide customers better value from their meters. However, if cost benefit analysis from the government – expected in summer – suggests that extending the deadline would prevent unexpected costs, it would prove difficult for BEIS to not decide on an extension. Now, we conclude, is time to take stock, consider the issues and ensure the remaining years of the roll-out are managed more effectively.

A recent Committee on Climate Change report analysing the preparedness of the UK’s housing stock for the challenges of climate change highlights an important, if neglected area of energy policy. In this week’s Policy section, we outline the key findings of the report, suggesting that, while it well demonstrates the tension between decarbonisation and affordability, it adds to the mounting pressure for government to develop programmes outside of ECO.

The preferred Target Operating Model (TOM) presented to Ofgem by the Elexon-led Design Working Group looks to be a logical approach to making market-wide HHS work while keeping the current arrangements for advanced metered non-domestic sites separate. As we state in our Regulation section this week, the shortening of the settlement timetable will be a major boon to the industry. Of course, the programme relies heavily on a successful smart meter roll-out which, as we reiterate above, is far from certain.

In our Industry Structure section, we analyse the recent securing of Japanese investment by two challenger suppliers – OVO Energy and Tonik Energy. The former has struck a deal with Mitsubishi, the extent of which shows that investors in such companies are increasingly viewing opportunities outside of conventional supply.  

National Grid has recently proposed upping the credit requirements under the CUSC. In this week’s Nutwood senior consultant at Cornwall Insight Tom Edwards summarises the issues and advances a different model for the industry to manage credit risk.

What is the Energy Spectrum service?

The Energy Spectrum service consists of two publications designed to keep you informed of key news from the energy market:

Daily Bulletin –  a concise daily summary of the key news from the last 24 hours in policy, industry and markets, and regulation
Energy Spectrum – our longer weekly publication provides a more detailed look at the events of the previous seven days. Energy Spectrum discusses the headline news and highlights key information within each brief. It also includes a markets page outlining headline trends in gas, electricity, and commodities
Sign up to a free trial

To subscribe or to request a free one-month trial of the service, email enquiries@cornwall-insight.com or call 01603 604 400.

Related thinking

Announcement

Energy market and net zero transition learning and development: Role-relevant career development training

We’re well over halfway through the calendar year and are now beginning to see more of the government’s thinking and policy-shaping around what needs to change to meet the 2050 net zero target. For example, the flurry of documents issued towards the end of 2020, including the Energy White Paper...

Low carbon generation

Our Renewables Pipeline Tracker: In with the new – scoping projects and progression through planning stages

Our latest Renewables Pipeline Tracker was published on 11 June, and this blog provides a summary of some of the recent developments in our coverage of the pipeline for new build and repowering renewables assets in GB. What’s new? Seabed leasing rounds, scoping projects and CfD announcements Since our previous...

Regulation and policy

How will consumers take to Market-wide Half Hourly Settlement?

Ofgem published its decision to implement the move to Market-wide Half Hourly Settlement (MHHS) on 20 April. This confirms plans to move to new settlement arrangements over a four and a half year time period, with the Elexon-led Design Working Group’s Target Operating Model to be used as the blueprint. Meters...

Regulation and policy

Ofgem raises modifications ahead of RCC and new switching arrangements

The latest edition of our Faster Switching Service Report due to be issued this week includes the latest developments in Ofgem’s Switching Programme and the associated Retail Energy Code (REC). Launched in November 2019, the Retail Code Consolidation (RCC) Significant Code Review (SCR) set out Ofgem’s intention to amalgamate the...

Net zero corporates and ESG

Get ready for climate risk reporting?

On 30 April we released the latest copy of our Energy net zero. The publication takes an in-depth look at the UK's transition to a low carbon economy. The below is an extract from our Energy Perspective on Task Force on Climate-related Financial Disclosure (TCFD). The article was originally published in the...

Regulation and policy

Calm before the storm? 2021 energy supplier compliance developments

The latest update to our Energy Supplier Compliance Portal went live on 4 May and includes changes to the compliance landscape during February to April 2021. While the previous quarter’s update reflected new principles resulting from Ofgem’s Supplier Licensing Review (SLR) and protections for prepayment meter customers facing self-disconnection, Q121...

Regulation and policy

Electricity transmission charging reform – overtaken by changing priorities?

Charging for the transmission network is never out of the development process for long. From major reviews, such as that initiated under Project Transmit in 2010, to significant reforms such as removing the triad benefit from distributed generation in 2018, and a host of smaller developments, change seems the only...

Low carbon generation

Why energy system governance is not fit for purpose

In my recent blog, the Emperor’s new clothes I referenced a poll of our Financing Net Zero (FNZ) membership which revealed 75% support for an energy systems architect to ensure we manage the net zero transition. In the spirit of independent thinking that Cornwall Insight is known for, I respectfully disagreed and...

This site is registered on wpml.org as a development site.