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Benj Sykes Announced as Co-Chair of the Offshore Wind Industry Council

23 Apr 2014

DONG Energy Wind Power’s Country manager, Benj Sykes, has been announced as the new co-chair of the Offshore Wind Industry Council (OWIC) by Business and Energy Minister, the Rt. Hon Michael Fallon MP, who also co-chairs the group.

The Offshore Wind Industry Council (OWIC) is the strategic partnership forum between Government and the offshore wind industry. OWIC’s role is to drive offshore wind deployment, bring down costs and build a successful, competitive UK-based industry. It oversees delivery of the Offshore Wind Industrial Strategy, which sets out how the industry and Government work together to deliver growth in the sector.

Mr. Sykes replaces Keith Anderson, the Chief Corporate Officer of ScottishPower, who has held this role since 2010, and will remain a member of OWIC.

Michael Fallon said:
“The skills and experience that Benj brings are a real boost to the Offshore Wind Industry Council following the excellent work of the previous co-chair, Keith Anderson.

The UK is currently the best country in the world to invest in offshore wind. I’m looking forward to working closely with Benj to continue to build a competitive and innovative UK offshore wind sector that brings jobs, exports and economic benefits for the UK.”

Benj Sykes is UK Country Manager, DONG Energy Wind Power and before working with DONG he held a number of positions with The Carbon Trust, including the Director of Innovation role.

Before working in the low carbon sector he gained significant experience in the oil and gas sector, mainly with Hess Corporation.

Benj Sykes said:
“OWIC has an important job in helping to drive the UK’s offshore wind industry forward. I’m looking forward to taking on this exciting and challenging role, and working closely with Government and the members of OWIC to drive down the cost of offshore wind and deliver a competitive and diversified supply chain, ensuring that offshore wind delivers on its potential to play a vital role in the UK’s energy mix for many years to come.”

Story appears courtesy of DONG Energy Power (UK) Ltd.

Happy Earth Day 2014

22 Apr 2014

Wishing You a Very Happy Earth Day 2014 from all of us at Enzen!

Ofgem Appoints New Enforcement Panel

22 Apr 2014

Ofgem has announced the members of its newly-created body, the Enforcement Decision Panel (EDP). The EDP has been established to take important decisions in contested enforcement cases on behalf of Ofgem. These decisions can involve imposing a significant financial penalty on energy companies when they break regulatory rules.

The EDP will help Ofgem to protect consumers’ interests in dealing with enforcement cases whilst maintaining the separation between its internal investigation team and this independent decision making panel.

John Swift QC, a senior competition lawyer and regulator, has been appointed as Chair of the EDP. The other members of the panel are experienced decision makers from a range of backgrounds, including consumer protection, financial services and competition law.

David Gray, Ofgem Chairman said: “Enforcement is central to Ofgem’s work in protecting consumers. We have a strong track record of dealing with enforcement cases, having imposed over £85m of penalties and redress since 2010 on energy companies who fail to meet their obligations. Our investigations help to secure robust decisions and act as a strong deterrent to prevent future poor behaviour.

“The Enforcement Decision Panel will bring a wealth of experience to the table and help Ofgem as we continue in our role to protect current and future consumers.”

The appointment of the EDP follows Ofgem’s recent review of how it conducts its enforcement activities. As part of that it is consulting on its draft revised Enforcement Guidelines and a draft Statement of Policy on Penalties and Consumer Redress. In addition, Ofgem has announced that it has decided to place a greater emphasis on deterrence when imposing penalties for future breaches. This change will come into effect where evidence of rule breaking comes to our attention on or after 1 June. This is likely to mean a substantial increase from the levels of penalty that it has typically imposed to date.

Story appears courtesy of Ofgem.

Government Loans UK Coal £10M to Assist in Mine Closures

11 Apr 2014

Following extremely difficult trading conditions, UK Coal is pleased to note the Government’s announcement today of its intention, in principle, to participate in a private sector led consortium that will invest in a managed closure of the business by late 2015.

Negotiations are well underway between a variety of stakeholders including Hargreaves Services, Harworth Estates, the Department of Energy and Climate Change, the Department for Business, Innovation and Skills, the Pension Protection Fund and the combined mining trade unions.

Subject to agreement of detailed terms expected to be concluded in the next few weeks, this joint initiative between commercial organisations and Government will see both Hargreaves Services and Harworth Estates invest £5 million each which will be boosted by a further £10 million from Government in the form of an interest bearing commercial loan. This package will help the company avoid an immediate insolvency and allow the solvent closure of the deep mines and the repayment of the loans.

In recent days, various parties have expressed an interest in potential investment in UK Coal’s surface mines. Every one of these has been explored but, as it stands today, no offers have been made and the proposed deal announced today remains the only option available. However, the managed closure plan of the deep mines will provide sufficient time to consider potential options that have arisen during the process.

Kevin McCullough, Chief Executive of UK Coal, stated “We are pleased that the Government has indicated a commitment to this deal which will give other parties the confidence to conclude their own positions.

“This proposal offers the best opportunities for our workforce, our customers and our suppliers. Without the support to close the business on a phased basis to 2015, we would have been announcing an immediate insolvency and 2,000 job losses. We will work with government departments and agencies to find alternative work, or support, for employees as they leave the business over the next eighteen months.

“Regrettably, the historically low international coal price and a strong pound, mean our costs are too high to sustain an ongoing business and this is the only option available to the business.”

Story appears courtesy of UK Coal.

British Gas Business Made to Pay £5.6M by Ofgem

10 Apr 2014

Ofgem’s investigations found that British Gas Business had incorrectly blocked business customers from switching to other suppliers and failed to notify customers when their contract was due to expire. In recognition of these failures, British Gas Business is paying £5.6 million in redress and penalty.

The energy regulator found that from 2007-2012 around 5.6% of the objections made by British Gas Business to non-domestic customers wanting to switch suppliers were invalid. This was caused by errors in British Gas Business’s computer systems, and there being inadequate processes and controls in place to detect when objections to switches were invalid. In addition, they did not properly communicate to customers the reasons for their objections to switching and how customers could resolve this. Ofgem opened the investigation into British Gas in 2012 and they resolved these issues swiftly. British Gas Business will pay an £800,000 penalty and finance an Energy Efficiency Fund to benefit micro-business customers.

In a separate investigation, Ofgem found that British Gas Business failed to give notice to around 1,200 business customers (most of which were micro-businesses) that their tariff was about to expire. This meant that customers were denied the prompt to shop around for a better deal and instead either continued on the same terms or were rolled over onto standard tariff rates, which were more expensive than their previous contract. British Gas Business has already paid back nearly £1.3 million to fully compensate all current customers affected by this issue, and is in the process of contacting and paying back around £150,000 to affected customers who have since moved to other suppliers. If they cannot find those customers, the remaining money will also go into the Energy Efficiency Fund.

Sarah Harrison, Ofgem Senior Partner in charge of enforcement said: “The ability for consumers to switch easily and fairly is key to a well-functioning energy market. In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract.

“British Gas Business fully accepts its failings, has stopped the practices and corrected its processes to prevent this happening again. The company has taken responsibility for its actions and this package strikes a balance of penalty for the company and redress for affected consumers.”

British Gas Business cooperated fully throughout these investigations and this has been reflected in the level of the settlement package, which would have been much higher if this had not been the case.

Story appears courtesy of Ofgem.

Ofgem Proposes New Rules to Help Consumers Switch Energy Suppliers

09 Apr 2014

Ofgem has today published the detailed rules which will complete the next important step of a programme to make switching energy suppliers faster and more reliable for consumers. Ofgem’s State of the Market Assessment found that switching can be a hassle for some customers and can deter them from engaging in the market.

Ofgem wants energy suppliers to face new rules that they have set out to ensure that cases where customers are switched by mistake are stamped out. The regulator also intends to strengthen licence conditions for suppliers to switch customers within three weeks, after any cooling off period.

The legal wording for these changes has been published today for final consultation and Ofgem wants these rules to be in force by August 2014. Once in place, the regulator can investigate and potentially fine companies that do not keep to these rules.

Story appears courtesy of Ofgem.

Ofgem Lays Plans for Cheaper Off-Peak Electricity Using Smart Meters

08 Apr 2014

Tariffs where consumers pay less for using electricity off-peak or when it is cheaper to produce, are one step closer from today. The national roll-out of smart meters to homes is due to start in 2015.

These meters will send actual consumption data directly to suppliers, meaning consumers will see an end to estimated bills. The meters will come with a display unit showing consumers the key information they need to better manage their energy consumption.

Smart meters also record consumption every half-hour, and with the customer’s agreement, the supplier can obtain these half-hourly readings. This opens the door to more advanced time-of-use tariffs where suppliers can charge customers less for electricity when it is cheaper. This could be, for example, at times when there is more renewable electricity available, or outside peak times.

To encourage the next generation of time-of-use tariffs, Ofgem will reform industry arrangements for working out how much electricity households use at different points throughout the day, and how much suppliers pay for that electricity. This will encourage suppliers to offer tariffs that cut charges for consumers using electricity when it is cheaper. Ofgem will now lead these reforms so that new industry charging arrangements are defined before the start of the national roll-out.

Rachel Fletcher, senior partner, markets, Ofgem, said: “Smart meters will help consumers to have much more control over when they use energy. They also make it far easier for consumers to reduce their bills if they use electricity outside peak hours, or at times when electricity is cheaper to produce.

“However, to make sure consumers get these benefits, we must reform industry charging arrangements which have been in force since the 1990s. This is so that more advanced time-of-use tariffs can be brought in. Taking these steps now means that we can make the energy market work even better for consumers, now that our reforms for a simpler, clearer, fairer market are in place.”

Secretary of State for Energy and Climate Change Ed Davey said, “I welcome this programme from Ofgem. Alongside the roll-out of smart metering, it will reform back-office electricity market processes that are vital to help deliver a more modern, competitive energy market for consumers.”

Story appears courtesy of Ofgem

Ofwat Confirms ‘Enhanced’ Status for South West and Affinity

04 Apr 2014

Ofwat today confirmed that South West Water and Affinity Water have been awarded ‘enhanced’ status as part of its 2014 price review.

In March Ofwat pre-qualified South West and Affinity for ‘enhanced’ status based on the high quality of their business plans. Since then, both companies have accepted Ofwat’s guidance on risk and reward, including the cost of capital, and committed to a limited number of changes to improve their plans. Ofwat is satisfied that with these changes their plans will deliver the best outcomes for customers.  Ofwat will announce its draft determination on limits on prices for the two ‘enhanced’ companies at the end of April. The price limits will cover the period 2015 to 2020.

Ofwat’s Chief Executive, Cathryn Ross said:
“In this price review we challenged companies to change their approach and they have. I am pleased to see increased ownership from Boards and much greater engagement with customers. Such changes are crucial if the sector is to retain the necessary trust and confidence of the public.”

Ofwat’s Chief Regulation Officer, Sonia Brown added:
“Our process aimed to encourage high quality, customer-focused plans. South West and Affinity’s plans really stood out.  Both the company and their customers will benefit from being enhanced. There is still a way to go before we set final prices in December. We are focused on making sure all companies’ plans deliver the best deal for customers.”

The other 16 companies will now need to submit new or improved evidence as part of their business plan. These companies will have the opportunity to request an earlier June draft determination on prices by submitting new evidence to Ofwat by the beginning of May 2014. Draft determinations for all other companies will be issued in August 2014.

Final determinations on limits on prices are due to be announced in December 2014.

Story appears courtesy of Ofwat.

Ofgem to Make Network Companies Increase Power Cut Compensation

02 Apr 2014

Ofgem is proposing to make Distribution Network Operators (DNOs) double the minimum financial payments they make for customers who face long power cuts in severe weather.

The proposed reforms to the Guaranteed Standards in severe weather would mean that:

  • DNOs would have to double payments made to customers to £70 if they fail to meet the minimum levels of service
  • Cap for payments made to customers would increase substantially, from current £216 to £700
  • Payments for customers are made automatically wherever possible

Ofgem has already introduced a major change under normal weather conditions, with the contravention time reduced from 18 hours down to 12 hours as part of our RIIO-ED1 price control. Increasing the payments for customers affected during severe weather conditions would further strengthen the incentives for the companies to act quickly and reconnect customers as soon as possible.

Guaranteed Standards, set by Ofgem, are the absolute minimum levels of service customers should expect from DNOs. If a DNO fails to meet these Standards, the affected customers are entitled to a payment. The companies are able to provide additional payments to consumers affected by power cuts.

Hannah Nixon, Senior Partner for Distribution said: “Many parts of Britain have seen some extreme weather conditions over the last few months and Ofgem has been proactively looking at ways to help consumers who face disruption to their energy supply in these situations.

“We are committed to ensuring that consumers are provided with a reliable electricity service. During the 2013 Christmas storms, 95% of customers who faced power cuts were reconnected within 24 hours, but we remain concerned about the 5% whose supplies were off for an extended period. Increasing the financial payments would send a strong message to the network companies that they need to do all that they can to reconnect all customers as fast as possible.”

The consultation will be open for eight weeks and interested parties are invited to share their views on the proposed changes. Ofgem will publish its decision by 1 July 2014.

Story appears courtesy of Ofgem

UK Regulators Launch New Cross-Sector Network

19 Mar 2014

The chief executives of the UK’s economic regulators have joined together to launch the UK Regulators Network (UKRN), tasked with improving coordination across regulated sectors to enhance investment and efficiency for the benefit of consumers.

UKRN brings together the Civil Aviation Authority (CAA), The Financial Conduct Authority (FCA), Office of Communications (Ofcom), The Office of Gas and Electricity Markets (Ofgem), Office of Water Regulation (Ofwat), the Office of Rail Regulation (ORR) and the Northern Ireland Authority for Utility Regulation (UREGNI). Monitor and the Water Industry Commission for Scotland (WICS) are also participating as observers.

The UKRN is a vehicle for co-operation that supports the separate independent regulatory frameworks of the individual regulators. It will allow regulators to work closer together on issues of cross-sectoral significance and to learn lessons across industries which help to improve regulation and the promotion of competition in order to secure better outcomes for consumers.

The three main objectives of the new network are to improve the consistency of economic regulation across sectors, deliver efficiency of regulation, and to improve understanding of how independent economic regulation works in the interests of consumers, markets, investment and economic performance, identifying scope to do better.

The members of UKRN are committed to working together to achieve these objectives. This commitment includes an ambitious programme of joint work on issues of cross-sectoral significance and applying lessons learned across sectors to improve the system of economic regulation.

The first areas of focus for the UKRN will include facilitating efficient multi-sector investment projects, promoting customer engagement and switching in regulated markets, assessing cross-sector resilience and cyber-security and developing a clear understanding of the overall affordability of regulated services for consumers.

Richard Price, the inaugural chair of the group, chief executive of ORR said:

“UKRN is an opportunity for regulators to build best practice and to identify ways to deliver greater benefits for the consumers they serve. By sharing expertise and analysis across our regulated industries, we can get new insights and make sure there is a joined-up strategic approach which reduces regulatory burdens, gives investors greater confidence, and delivers better outcomes for consumers.

Independent regulation has delivered significant benefits for UK consumers through improved quality, innovation, better prices, greater choice and better protection where competition is not yet viable. The UK’s track record in economic regulation is an enviable one. We have come together to build on these successes so that each of us, in our own sectors can raise the performance of independent regulation in promoting consumer interest, securing a stable environment for efficient investment and innovation and more effective dialogue with government.”

Dermot Nolan, Ofgem Chief Executive said:

“Ofgem looks forward to improved coordination between regulators to make a positive difference for consumers. The UKRN already has a strong focus for its first work plan which will see us take a targeted approach to considering improvements to issues common across all sectors.”

The UK model of independent regulation has delivered major benefits to consumers and the economy and is widely recognised to be world leading. The objective of the network is to look for further ways to improve the contribution it makes.

Story appears courtesy of Ofgem.