News Blog

Utilites Review, December 2016

Happy New Year to you all! Here we              meanleangreen pic CROPPED_leftalign
continue our update on the 
UK utilities
market, covering the latest in the electricity,
gas, renewable energy and water industries…


An interesting month for energy prices, where the prevailing logic behind price movements did not manifest itself. Generally, energy prices respond to oil price rises even where the oil price changes are speculative. Over the past year or so whenever Opec has met to agree production caps oil prices have responded based on the markets view on the likelihood of an agreement being reached.

When Opec finally did agree caps this month, and oil prices rose, the energy markets did not respond. However, the caps have not yet come into place and it remains conventional logic to believe that oil prices will start to increase if the caps are applied and that this will filter through into longer term energy prices


Drax owners of Haven Energy are poised to buy Opus along with its gas stations as it moves away from its coal legacy position.

Irish state owned supplier ESB have also announced plans to enter the UK market to supply consumers.

BG have been fined £4.5 million for failing to meet their obligation to introduced Advanced Meters to Profile 05-08 meters by 2014. BG are not the only supplier to be fined whilst EDF Energy have been held up as model for compliance. The programme was the precursor to allow P272 to happen. The money will go to the Carbon Trust.

Pure Telecom has moved into the energy market offering energy supply from most of the main suppliers.

Good Energy have launched an online tool ‘Selectricity’ to allow businesses to choose how and where their electricity is generated. It matches customers to local renewable generators. Having watched the website video I am unsure quite how the mechanics of this works. However, it might be a good option to investigate if you have clients with very strong CSR ambitions.

Green Energy are offering a new Time of Day tariff. Though aimed at consumers there is no reason why this sort of tariff will not be available to businesses as SMART technology is rolled out. The concept revitalises the old Economy 7 type mentality in that price will vary between periods of low and peak demand. At peak times prices may be 5X that of low periods. The idea is that customers will use the off peak periods to charge appliances and run washing machines and driers etc.

Renewable News

Renewable Heat Incentive boost

The Government has dropped plans to remove solar heating from the scheme.  The technology will receive the same level of support (19.74p/kWh) over seven years and applications for solar thermal up to 200kW in size will continue to be supported.

Tariff reductions are less drastic than expected. Tariffs for new air source heat pumps and ground source heat pumps increasing to 10.0 pence per kilowatt-hour (p/kWh) and 19.55p/kWh respectively.

An introduction of tariff guarantees for large biomass boilers; large biogas plant; ground source heat pumps; and all capacities of biomethane; biomass-CHP and deep geothermal plant are also part of the finalised scheme.

The tariff for new biomass installations will also be increased to 6.44p/kWh – the level available between October and December 2015, adjusted for inflation. Reforms are expected to come into force in spring 2017.

Christmas wind generation records

Storm Barbara delivered the 3 highest recorded wind generation events with new HH, daily and weekly records set. The amount generated supplied 41% of the UK’s requirements in one HH period.

Energy management

We all know the potential that a Smart energy network should bring and are familiar with products like Hive to help us control our usage remotely from wherever we are. The Government is investing millions in rolling out smart meters to improve interconnection and control.

However, a note of caution this month saw a major cyber-attack on Finnish Tower blocks disabling internet connected heating and water systems. Unfortunately, all silver linings seem to have a cloud!


Last month we listed out the companies that had applied for a licence to be a water retailer in England. Below is a list of those incumbent water companies who are opting out of the retail market and the retail that is acquiring their retail licence and hence customer become pure wholesalers

Exiting water company Acquiring licensee
Affinity Water Ltd Affinity for Business (Retail) Ltd
Anglian Water Service Ltd Anglian Water Business (National) Ltd
Bristol Water PLC Water 2 Business Ltd
Northumbrian Water Ltd NWG Business Ltd
Portsmouth Water Ltd Castle Water Ltd
Severn Trent Services United Utilities (also known as Water Plus)
Severn Trent Water Ltd United Utilities Water Sales Ltd (also known as Water Plus)
South Staffordshire PLC SSWB Ltd
Southern Water Services Ltd Scottish Water Business Stream Ltd
Southwest Water Ltd Pennon Water Services Ltd
Sutton and East Surrey Water PLC Sutton and East Surrey Water Services Ltd (also known as SES) Business Water
Thames Water Utilities Ltd Castle Water Ltd
United Utilities Water Ltd United Utilities Water Sales Ltd (also known as Water Plus)
Wessex Water Services Ltd Water 2 Business Ltd
Yorkshire Water Services Ltd Three Sixty Water Ltd

Severn Trent
are also bidding for Dee Valley a relatively small (geographically speaking) water company in the NW, news that they had succeeded was trumped by an announcement that Ancala were also bidding.

Pennon and South Staffs have also merged non-household retail operations.

A new Water start-up has applied for a water retail Licence. The Water Retail Company will target a small number of big customers. They will offer technology and innovation to provide enhanced services and focus on water efficiency and water reuse to drive down bills. They expect to be making £100m turnover in year 2.


A couple of potentially interesting links below:

Energy consumption in the UK – Information for overall energy consumption in the UK with details of the transport, domestic, industry and services sectors. Click here

The Renewable Heat Incentive – Government Response to Consultation Click here




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