As the energy industry is constantly evolving, it can be easy to miss important changes – or even work out which changes affect your business, and what you should do to prepare for them. To make sure you haven’t missed any of the key energy events of 2017, here’s a recap:
Further political upheaval
Since the UK voted for Brexit in 2016, many of us have resigned ourselves to years of political uncertainty, and 2017 didn’t disappoint.
The final Spring Budget contained little that helped to clarify the UK’s energy future, although many in the industry welcomed the decision to create a new set of controls to replace the Levy Control Framework. In April, Theresa May’s announcement of another general election only served to create further uncertainty for businesses across all sectors. As Labour’s energy policies are distinctly different to the those of the Conservatives, if Labour had won we could have seen a real sea-change in our national energy strategy.
The unexpected election further delayed decisions on key areas of energy policy, such as the Clean Growth Strategy and the consultation on the affordability of business energy. Dieter Helm’s independent review into the cost of energy wasn’t published until October, when it was revealed that businesses are paying too much for their energy despite falling oil, gas, coal and renewable prices.
New energy policies & regulations
April saw the introduction of some key changes within the utilities space. From 1st April 2017, all businesses in profile classes 05-08 were reclassified as half hourly sites under P272. These businesses will have seen new time of use charges and will now face data collection and meter operator charges, but could also benefit from the more detailed half hourly data they receive.
On the same day, we also saw the biggest change in the non-domestic water sector ine decades, as businesses were given the power to choose their water retailer. While there have been some teething issues – as can be expected in any new market – many businesses have benefited from switching or renegotiating with their current supplier, and some have even chosen to self-supply.
It wasn’t until November that we finally saw both the publication of the Industrial Strategy and the Clean Growth Strategy. The Clean Growth Strategy provided some much-needed clarity around the Government’s energy strategy, including a new target of a 20% improvement in energy productivity in the UK by 2030. However, the funding they have pledged to low carbon technologies is unlikely to be enough for businesses that are looking to transition to a low carbon economy, so many were left wondering how they will be supported in achieving the new energy productivity target.
Some answers may have been provided by the Industrial Strategy, which outlined plans to develop a new smart energy network, including remodelling the electricity grid and creating local smart energy systems. Encouragingly, the Government also recognised the rising costs of energy for businesses and proposed several actions to reduce these costs. However, there are concerns that one of these actions – widening the eligibility for the exemption schemes for energy intensive industries – could have negative effects for those who aren’t exempt.
A changing energy mix
Over the past year, we’ve seen some positive milestones as we transition towards a low carbon economy. On Friday 21st April, Britain achieved its first coal free day since the Industrial Revolution, with renewable generators supplying almost a fifth of the UK’s electricity on this day. We have also had the greenest summer on record in the UK, with more than half of our electricity coming from low carbon sources between June and August.
With the Government pledging a further £557m to green energy projects in the 2019 Contracts for Difference (CfD) auction and falling offshore wind costs, it’s likely that renewables will provide an increasing share of the UK’s generation.
For gas, it was announced in June that Centrica would be permanently closing its Rough gas storage facility. Rough, the largest facility of its kind in the UK, provided over 65 percent of our gas storage capacity, and its closure will lead us to rely much more heavily on gas imports. With all coal fired plants set to close by 2025, we’ll also become more reliant on gas generation until nuclear can fill the gap.
At Inenco, we’ve had another successful year of helping businesses to optimise their energy strategies, which many businesses find particularly challenging when the energy landscape is constantly changing.
One of the highlights of our year was our Missing Millions report, published in April, which revealed that businesses could be missing out on up to half a billion pounds of unclaimed refunds and incorrect charges. With energy costs set to rise by 25%, the Missing Millions report demonstrates the value of billing audits, as businesses could unearth significant savings.
This year we’ve taken a forward-looking focus, with our Summer Utilities forum exploring the challenges and opportunities that utilities professionals will face in the future. We’ve also created our Future Utilities Manager report to provide energy managers of today with insight into how their role will change by 2030, and to give businesses an idea of the level of investment needed.
If you’d like to talk to one of our experts about how to put together the optimum energy strategy for your business in 2018, call us today on 084511 46 36 26 or email firstname.lastname@example.org.