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Distribution network operators must work together to respond to changes in the sector if they wish to be successful in the regulatory process, Ofgem chief executive Dermot Nolan has said.
Speaking to representatives from the network companies at an Energy Networks Association event yesterday, Nolan said: “One thing that I really really don’t want to see is a sense that any individual company is only responding to the challenge itself. The challenge is faced by the sector and, in some sense, the entire system.
“One company that doesn’t work with other companies and doesn’t respond to the entire system challenges is not the company that will be rewarded by the regulatory process, it is not a company that will be seen as innovative, and it is not a company that will be successful.”
He pointed out that as the energy sector sees major changes such as increased renewable generation and increased use of technology, the network companies must respond “flexibly and innovatively”.
“As we see future change, as we see increased embedded generation, [it is important] that network companies respond flexibly and innovatively to them,” he said. “We’ve already seen situations where the amount of solar that has come on has exceeded expectations, how are companies going to respond to those?”
“A company needs to be innovative, needs to change, needs to respond and they are the companies that will succeed in the regulatory process,” he added. “That is my challenge to you.”
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