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.

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