The Consequences for Those Who Generate Their Own
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theenergyst.com April/May 2017 Aggregator Local Trouble in “The consequences for those who 22 crunch: 36 authorities: 38 store: Rough generate their own power could be Consolidation ahead Councils eye energy storage outage hits as revenues fluctuate market entry gas prices devastating Triad cuts” p16 INSIDE THIS ISSUE 44 Technology – blockchain Because information is visible to every participant in the chain, every change, disruption, delay 18 and movement is transparent Policy & Legislation Analysis by the 34 Climate Change Committee suggests Gas & Electricity that decarbonisation Why organisations such as costs are ‘minimal’ aggregators, local authorities for most firms and renewable generators are – but they are obtaining electricity supply set to double licences 24 Demand-side 42 response Will aggregators without a Energy Finance supply licence struggle to Will the finance director buy survive as demand response into your energy business case, revenues are commoditised? asks ESTA 06 Tidal power is News & ‘the most important Comment Engineers tell government renewable power to pay for efficiency, source to be supported’ storage and tidal power theenergyst.com April/May 2017 Aggregator Local Trouble in “The consequences for those who 22 crunch: 36 authorities: 38 store: Rough generate their own power could be Consolidation ahead Councils eye energy storage outage hits devastating Triad cuts” p16 61 as revenues fluctuate market entry gas prices Water 10 14 Management Insight Accessing your water ND Metering Solutions’ Kris Front consumption in one place will Szajdzicki provides evidence Cover make it easier to make informed that smart meters can indeed Kinect Energy Group talks decisions to reduce usage and give gross errors, particularly in about transforming uncertainty cut costs I&C applications into opportunity News & Comment 4 Gas & Electricity 34 Compressed Air 52 Insight 10 Energy Finance 40 Water Management 60 Policy & Legislation 16 HVAC 46 Product News 62 Demand-side Response 20 Lighting 50 Q&A 66 To subscribe please visit: theenergyst.com/subscribe theenergyst.com April/May 2017 3 COMMENT Utilities eye land grab as reality bites Buying energy used to be all about wholesale challenge on their hands should that scenario market timing and hedging. This is no longer the comes to pass. From their perspective, there is case, at least for electricity, where the wholesale already something of a landgrab taking place. Some proportion is now only half of the bill, due to utilities are looking seriously at diversifi cation rising non-commodity costs such as transmission – not just within their current sectors. and distribution, green initiatives and taxes. Water market competition raises the possibility In fact Dieter Helm, Professor of Energy Policy of energy suppliers bundling water. That may and Offi cial Fellow in Economics, New College, make sense: our recent Directors’ Report found Oxford, recently commented that “the wholesale almost nine in 10 fi rms would buy energy and market will largely wither away. The economics of water from a single provider if it saved money. supply are gradually migrating to the economics of It is already happening. Regent Water, a subsidiary of broadband – a capacity not an energy market.” Regent Gas, was granted its water supply and sewerage Helm thinks that development will fundamentally licence by Ofwat in February. It may well be that water change what it is to be an energy retailer. It also companies are looking at energy supply licences too. opens up the possibility to new entrants such as TV Water suppliers have heavyweight billing and back offi ce companies, telcos, supermarkets and online retailers. systems in place – and, crucially, customer relationships. Given the energy intensity of their operations, they are Some utilities are looking also highly skilled energy buyers. seriously at diversification – Meanwhile, demand-side not just within their response aggregators are current sectors looking at supply licences and suppliers – and DNOs – are becoming aggregators. Paul Fitzgerald, sales and marketing director at Competition is usually good billing fi rm Junifer Systems, believes “it will be a news for consumers. But it multi-utility environment in the next 5-10 years. appears the market and its Companies like Sky already provide TV, broadband players are on the cusp of and telephony – energy is a natural progression for fundamental change. companies like that. Telcos many years ago moved from a single product and that is the nature of how things It will be interesting progress. I see the same thing happening in energy.” to see which Helm, meanwhile, fl oats the idea of a company like utilities move Amazon entering the fray. If energy fi rms worry fastest, and which about their margins now, they will have a serious are left standing. Editor Sales director Tim McManan-Smith Steve Swaine [email protected] [email protected] Energyst Media Ltd, PO BOX 420, Reigate, Surrey RH2 2DU t: 020 3714 4450 t: 020 3714 4451 m: 07818 574308 m: 07818 574300 Registered in England & Wales – 8667229 Registered at Stationers Hall – ISSN 0964 8321 Contributing editor Commercial manager Printed by Warners (Midlands) plc Brendan Coyne Daniel Coyne [email protected] [email protected] No part of this publication may be reproduced without the written permission of the publishers. t: 020 3771 1267 t: 020 3751 7863 The opinions expressed in this publication are not necessarily those of the publishers. The Energyst is a controlled circulation magazine available to selected professionals interested in m: 07557 109724 m: 07557 109476 energy, who fall within the publisher’s terms of control. For those outside of these terms, annual subscriptions is £60 including postage in the UK. For all subscriptions outside the UK the annual Production Circulation enquiries subscription is £120 including postage. Paul Lindsell [email protected] [email protected] Follow us for up-to-date news and information: m: 07790 434813 4 April/May 2017 theenergyst.com NEWS & COMMENT Engineers tell government to pay for energy efficiency, storage and tidal power A survey of the UK’s main engineering bodies has urged government to provide energy efficiency payments or tax breaks to businesses, communities and households Tidal power is that can demonstrate proven ‘the most important reductions in demand. renewable power The Energy Saving Incentive source to be scheme is one of many recommendations based on supported’ the views of 1,300 engineers Siemen’s SeaGen has achieved 5GWh of tidal power generation from 35 engineering bodies in since starting operation at Strangford Lough in Northern Ireland response to the government’s Industrial Strategy consultation. UK competitiveness the support for small nuclear is mainly heading offshore. The engineers also urged report suggests. It urged reactors, heat networks and Meanwhile, three quarters government to give teeth to policymakers to take a system- hydrogen trials. According (74%) of respondents said that existing energy efficiency wide approach to energy with to survey respondents, government should prioritise regulations. Esos, notes the particular focus on heat. tidal power is “the most support for clean energy report, could unlock more Lamenting the scrapping important renewable power technologies and storage via than £31bn of savings over the of carbon capture and source to be supported” as the £1bn Industrial Strategy next 13 years – if companies storage support, the report it is “reliable and does not Challenge Fund, a view were required to act upon reiterated views that CCS require back-up, and has government appears to share. mandatory energy audits. would be “critical” for huge potential in the UK”. The report also recommends Focusing on energy efficiency meeting carbon budgets after While the UK is a leader public procurement should and productivity will be the 2023 and likely “essential” in offshore wind, the report focus on best value over lowest cheapest way of decarbonising in decarbonising heat. also highlighted the fact that cost, and to enable smaller the economy and increasing The engineers also backed the value of its supply chain firms to participate in tenders. Grid confirms Broker Pulse acquired by telecom firm Arrow Triad dates Energy Broker Pulse has Internet & Controls wanted to partner with a been acquired by business Innovation of the Year at the company whose ethos and National Grid has confirmed communications firm Arrow for UK Energy Awards for its POD values were similar to Arrow’s,” that last winter’s Triad periods an undisclosed sum. digital energy management said CEO Chris Russell. “Pulse fell at 5-5.30pm on Monday Pulse, owned by Ben Dhesi platform. provides a unique level of 5 December, Thursday 5 and wife Purdeep Kang, made The deal is Arrow’s eighth service and consultancy and January and Monday 23 a profit after tax of £577,982 acquisition in the past seven this is reflected in their loyal January. Businesses will now in the year to 30 September years and, according to the customer base.” find out how well their Triad 2015, according to Companies firm, makes Arrow one of few Pulse will operate as a alerts provider performed. House filings, up 220% on the companies in the UK able to separate business unit and its No provider wants to miss a previous year. provide a full energy, telecoms employees will continue to Triad, or risk their credibility. The company has notched and IT consultancy. look after their customers. Equally, sending out too many up significant growth in The company, which last “We are excited by the Triad alerts risks annoying recent years. It was founded year, received investment opportunities that working customers, because they will in 2009 by Dhesi and Dorian from private equity company with Arrow will bring,” said Nineberg, with Dhesi acquiring Growth Capital Partners, Dhesi. “Both companies seek then ramp down equipment Nineberg’s shareholding in looks set to continue that to differentiate themselves by or ramp up onsite generation, August 2015.