Against a background of Brexit bewilderment, the one thing British business needs is a bit of certainty regards our future.
Well, I can’t offer political certainty but I am certain that non-commodity costs on electricity, specifically the environmental levies, are going to go up.
Ofgem has released its forecast administration costs for the 2019/20 period, which are set to rise from £4.4m to £5.5m. This represents an increase in RO administration costs of 25.4%.
These rising prices make the case for decarbonisation even more pressing and BEIS is definitely keen to see this. The latest allocation of funding is for the steel industry and the government is asking for input through a Call for Evidence on how we can help UK steel meet Net Zero and improve long-term resilience. One thing Ofgem believes is needed for decarbonisation and system resilience across the GB market is great collaboration and standardisation around development of flexibility platforms like peer to peer trading and DSR aggregation.
There’s some exciting opportunities there, I think.
I’m not sure about decarbonising steel but BEIS have published an interim report on how to promote engagement with energy management and smart energy data in schools, retail and hospitality. The report has some exceptional nuggets of wisdom like ‘avoid approaching schools during the busy exam periods’ but, in seriousness, does offer some useful insights on how to approach energy management in these hard to reach sectors.
For those who don’t yet engage in energy management and smart data, the latest network code modification for gas should help – Ofgem has made a direction which should enable suppliers to offer Class 3 metering more easily (where reads are taken daily but only only submitted for settlement one a week). Since this can offer substantial cost reductions over the non-commodities for manually read gas, this is a positive thing for smaller supplies.
We must not forget water and as parts of the country are at risk of drought (hard to believe as I sit here at the Etihad in Manchester, watching the rain bucketing down), the Environment Agency has issued a warning to remind people who are abstracting that they must be licenced. As water resource management gets more important, I expect to see a lot more enforcement activity from the EA regarding water and effluent licensing.
Finally, if you are interested in the UN Sustainable Development Goals, the Dept for International Development has a survey out now asking for feedback on how we go about assessing the UK’s performance towards these. Here at ICON, we have been working on the SDG’s over the summer so please expect information on these to be uploaded to the ICON hub very shortly.
If you need anything else, please let me know.
For more information, or to download this week’s full report, please log onto the ICON app.