Ofgem - Experts & Thought Leaders

In just 10 days’ time, Glasgow’s SEC will be abuzz with renewable and low-carbon energy experts from home and overseas at the annual All-Energy and co-located Dcarbonise exhibition and conference. The Rt Hon Humza Yousaf MSP, First Minister of Scotland, will be speaking in the opening plenary session on Wednesday 10 May, and four of his Ministers will also be taking part in relevant sessions during the two-day event. Decarbonization “We are delighted by this level of support from the Scottish Government,” said Jonathan Heastie, Portfolio Director, Energy & Marine at RX Global who owns and organizes the duo of events. “This is the 22nd anniversary of All-Energy and the third edition of Decarbonize. All-Energy has spent two decades helping the UK to decarbonize its power supply, Dcarbonise has been introduced to ensure that private and public sector energy end-users gain the same access to advice and technology to assist them in their plans to decarbonize their buildings, businesses, and transportation.” session speakers Other plenary session speakers are Professor Jim Skea CBE, FRSE, David Bunch, Chris Stark, and Councillor Susan Aitken The First Minister will be speaking on 10 May in the opening plenary session at 09:00, featuring Keith Anderson, ScottishPower’s CEO who will both chair and speak in the session, and The Rt Hon The Lord Provost of Glasgow, Councillor Jacqueline McLaren who will give the Civic Welcome and invite all attending the two-day event to be at the Glasgow Science Centre from 18:00 for the Civic Reception, which is incorporated in the Giant Networking Evening. Other plenary session speakers are Professor Jim Skea CBE, FRSE - UK candidate for IPCC Chair 2023, Professor at Imperial College London, and Chair of the Scottish Just Transition Commission; David Bunch, Country Chair, Shell UK; Chris Stark, Chief Executive of the Climate Change Committee (speaking on Reliable, Resilient, Zero Carbon Power); and Councillor Susan Aitken, Leader of Glasgow City Council. keynote address, panel discussion Three other Scottish Government Ministers will also be speaking on 10 May, Patrick Harvie MSP will be delivering a keynote address in the opening Heat Transition to Net Zero session at 11:00, and at the same time Kevin Stewart MSP, Minister for Transport will give a scene-setting speech in the Transport Decarbonisation session. That then leads to a panel discussion on the decarbonization of heavy goods vehicles (HGVs) which he will chair. In the afternoon of 10 May at 14:00  Lorna Slater MSP, Scotland’s Minister for Green Skills, Circular Economy and Biodiversity will be one of the speakers in ‘Working for Net Zero ensuring good quality and sustainable jobs’, a joint Centre for Energy Policy (CEP) and Future Energy Skills (FES) program event; significantly, it is the second 90-minute session looking at Green Jobs that day; with the Future Talent Hub also key to future employment. Zero emission electricity Scotland’s Energy Minister Gillian Martin MSP will get the plenary session on Thursday 11 May off to a flying start at 09:00 in a ‘Meet the Minister’ spot with a keynote address and answering audience questions before a stellar panel takes on the subject of ‘Zero emission electricity 100% of the time: How do we deliver a net zero GB electricity system by 2035?’ chaired by Dr Simon Harrison, Head of Group at Strategy at Mott MacDonald. His panelists are Adam Berman, Deputy Director, Energy UK; Tom Smout, Senior Associate, Aurora Energy Research; Rebecca Barnett, Director of Networks, Ofgem; Laura Fleming, CEO, Hitachi UK; and Steve Scrimshaw, Vice President, Siemens Energy UK & Ireland. Well, over 500 speakers are taking part in 65 sessions during the two days. Jonathan Heastie describes them as, “A veritable “who’s who” of the industry in what is undoubtedly one of the industry’s biggest free-of-charge conferences seen anywhere in the world, and something we are hugely proud to deliver.” registration The exhibition has over 250 exhibiting organizations from 15 countries including Italy, Flanders, and Denmark All elements of All-Energy (the exhibition, the conference and the Giant Networking Evening kindly sponsored by Siemens Energy and incorporating the Civic Reception) are free to attend for all with relevant business, academic, government, or media interest in the topics that come under the conference spotlight or feature in the exhibition registration is at the website. The exhibition has over 250 exhibiting organizations from 15 countries including returning pavilions from Italy, Flanders, and Denmark. At least 80 new organizations are exhibiting at the for the first time. Event details Full details on all aspects of the show can be found on the event website Headline Sponsor is Shepherd and Wedderburn; other sponsors include ScottishPower, Shell UK, Siemens Energy, Ventient Energy, and DWF. The Society for Underwater Technology is its Learned Society Patron; Glasgow is its host City; and it is held in association with the REA, UKRI/Innovate UK, Highlands, and Islands Enterprise, and Scottish Enterprise.

Ofgem has confirmed a five-year investment package for the electricity distribution network companies to help deliver cheaper, cleaner, more reliable local grids at no extra cost to consumers.  renewable energy sources A key requirement of the plan will be for networks to focus the investment on supporting the move away from a high dependence on imported fossil fuels, towards using more homegrown, cleaner, cheaper, and secure sources of energy.   The potential of renewable energy sources such as wind, solar, and wave power require changes in the way energy is used and stored to gain their benefits and the price control set out by Ofgem, will allow for the scale of investment required without adding to customers' bills.   Customer value, supply security  The investment set out helps ensure Britain is no longer at the mercy of international energy prices" Akshay Kaul, Ofgem Interim Director, Infrastructure and Security of Supply Group, said, “The investment set out today delivers value for consumers, safeguards the security of supply, and helps ensure Britain is no longer at the mercy of international energy prices or geopolitical events." "We’ve set the initial amount of investment that local electricity distribution network operators can make in the 2023 to 2028 period, with every pound representing value for money for consumers and no increase in bills."  cleaner renewables “The economics of energy have shifted with home-grown cleaner renewables like wind and solar energy proving cheaper than costly imported gas." "Together with more nuclear and potentially hydrogen-fuelled power, these renewables will contribute to a lower carbon energy mix, better protected from geopolitical events and energy price shocks."  reliable and resilient networks He added, “These new low carbon sources of generation will also need to be connected to an expanded electricity network to meet the growing demand for electricity with millions more electric heat pumps in homes and electric vehicles (EVs) on the road expected over the coming years."  “We’ve carefully considered all the work that will be required and set the budget for the networks, accordingly, driving the increase in capacity needed for net zero as well as delivering more reliable and resilient networks, at no extra cost to consumers.”  RIIO-ED2 Ofgem has ensured that this investment can be delivered without any increase in network charges on bills Known as RIIO-ED2 (Revenue = Incentives + Innovation + Outputs for electricity distribution), the package sets the level of investment Ofgem allows local electricity distribution networks (DNOs) to make in the 2023-28 period. The cost of the work is recouped through the network charges on consumer bills and by limiting network profits and increasing efficiencies. Ofgem has ensured that this major investment can be delivered without any increase in network charges on bills, which will remain at an average of £100 per year per bill-payer, despite the increased investment.  Final Determinations follow Ofgem’s RIIO-ED2 Final Determinations follow on from its Draft Determinations published taking account of all stakeholder feedback received in response to the consultation.  These Final Determinations will be followed by a statutory consultation on the license modifications required to implement the RIIO-ED2 settlement in December 2022 followed by confirmation of the licenses and associated price control financial instruments in February 2023. The RIIO-ED2 price control will commence on 1 April 2023. 

Ofgem is launching a new package of reforms designed to bolster consumer protection and ensure energy suppliers are more resilient to market shocks.  The proposals include the introduction of capital adequacy requirements which will help reduce the risk and cost of supplier failures. Renewable Obligation receipts Ofgem will also be requiring suppliers to ringfence Renewable Obligation receipts and monitoring closely the use of credit balances. The proposals look to protect current and future energy consumers by reducing the risk of future supplier failures and the associated costs and disruption. These policies are further steps as part of Ofgem’s overall reforms to create a more stable and viable market in the interests of both consumers and suppliers. Statutory Consultations Statutory Consultations build on the work the regulator has done to ensure suppliers have robust business models  These Statutory Consultations come on the back of robust review findings announced earlier in the week by the regulator, asking 17 energy companies to drive up standards for consumers. They also build on the work the regulator has done to ensure suppliers have robust business models and their directors are fit and proper for the role, to minimize the risk of supplier failure, which comes at a cost to consumers. an innovative and dynamic approach Jonathan Brearley, Ofgem’s Chief Executive, said, “The energy crisis has had a profound impact on the sector, its business models, our approach to its regulation, and the way we think about risk." “These proposals will provide protections, checks, and balances for consumers, suppliers, and the entire sector to create a more stable market. We want suppliers to be able to be innovative and dynamic, while also making sure they are financially stable, and that customers’ money is protected." delicate balance Ofgem wants well-capitalized businesses and struck the right balance between resilience and competition" “This is a delicate balance and while Ofgem wants well-capitalized businesses that can weather price fluctuations, we also don’t want to block the market for new suppliers or force suppliers to sit on lots of capital they could be investing in innovative ideas." "We are seeking views across the industry, recognizing the different business models suppliers have, on whether we have struck the right balance between resilience and competition." financial regulations “Ultimately, we have a responsibility as a sector to ensure we are protecting consumers’ interests by making sure our financial regulations are as robust as they can be. At a time of extremely high energy bills, that responsibility is more important than ever." "I accept that there are very different views across the industry, but I encourage all retailers to work with us to move the sector to a more vibrant and resilient position.”  Proposals Building on work already done, ensuring suppliers are even more financially secure, to protect consumers, this will be achieved by setting a minimum amount of capital that suppliers must hold so the regulator can be reassured they can withstand future shocks.  Preventing suppliers from using the Renewable Obligations money that they hold on behalf of others requiring suppliers to ‘ringfence’ the money needed to buy renewable energy.  Stamping out the misuse of credit balances reinforces rules on how all domestic providers use customer balances. If they are found to be reckless, further action will be taken, via Ofgem’s Enhanced Financial Responsibility Principle.  Policy changes Ofgem will also be making further policy changes to protect consumers and help ensure that there is a fair and resilient market:   EBIT (Earnings before interest and taxes) - A review of this aspect of the Price Cap to ensure a fair rate of return on suppliers' investments while keeping profits reasonable. The allowance is currently set at 1.9% and we are looking to make changes so the margin continues to be appropriate for customers and suppliers alike, over a wide range of market conditions. A variable rate may be adapted to take into account changes in energy market prices.  Market Stabilisation Charge – These are proposals to extend this temporary measure designed to reduce the risk of supplier failure by sharing out some costs and risks between suppliers. This, therefore, encourages suppliers to buy enough energy in advance, or “hedge”, on behalf of their customers. Balancing Services Use of System – Updating the price cap to reflect changes in the way charges are recovered from electricity network users, from a half-hourly variable price to a flat rate based on volume.  Price Cap Programme of Work – Stakeholders will have the opportunity to input Ofgem’s priorities for updating elements of the cap to ensure it continues to protect consumers.  transforming the retail energy sector The new raft of proposed reforms is the cornerstone of Ofgem's work in the retail market, aiming to support Ofgem’s vision for transforming the retail energy sector to be one that is performing better amidst the volatility in the market today, is more financially resilient with higher standards across the board, and reforms pricing regulation to be fair.  Ofgem will be seeking a range of feedback on all aspects of the consultations from sector stakeholders and beyond, and it is anticipated reform of these policy areas will be published in Spring 2023. This is all part of the wider work Ofgem is doing to protect consumers and stabilize the market.