Dec 19, 2016

Power shortages could switch off UK’s Christmas lights next year

2 min
Shortages in power could worsen and threaten the UK’s ability to keep the lights on next winter. This means we could see potential power o...

Shortages in power could worsen and threaten the UK’s ability to keep the lights on next winter. This means we could see potential power outages over Christmas next year.

According to the British Infrastructure Group (BIG), the National Grid’s safety buffer this winter has shrunk to 0.1%. There is a sustained danger of intermittent blackouts for the foreseeable future, thanks to dwindling base capacity. This could be further exacerbated by freak weather events.

This winter, the National Grid will pay around 800 times the average wholesale price for 2015 and four times the cost of last year’s emergency reserves.

All of this has an effect on household energy bills with some energy rationing even coming into force in the event of severe shortages or freak weather.

Grim future scenarios could see green energy being put on the back burner while old coal power stations are restarted to increase the UK’s energy buffer.

The report from BIG suggests households and businesses need to be more energy efficient but the government needs to review energy policies.

Accompanying a general efficiency drive should come a decentralisation and relaxation of government rules (such as planning permission and consultation) around constructing combined heat and power plants on industrial sites or large complexes. Decentralised projects can deliver more than 20 percent higher efficiency through shorter electric transmission distances and through better use of heat that would ordinarily be wasted in large power stations.

While it’s important the government continues to invest in renewable energy, without reliable storage techniques, there’s always going to be the chance of a shortfall on those cold, windless winter nights. Energy storage is difficult but there have been a number companies making breakthroughs with different technologies.

Read more: Cryogenic storage offers hope for the success of renewable energy projects.

The report concludes: “Currently, the British electricity network is going backwards. Capacity margins are so tight that National Grid’s emergency power deals have become the norm. Consumers, both domestic and business, having once reaped the benefits of tumbling prices after the 1990smarket reforms, are now resigned to paying ever-higher electricity bills. Some households may even face the prospect of power being rationed and returning to a three-day week. Some businesses already have. This is surely a failure of any nationally-directed power strategy.”

Download the full report from BIG here.

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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