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Ahead of the Energy UK conference, chief executive Lawrence Slade speaks exclusively to Utility Week about the DCC delay, Brexit, investment, political intervention, and the state of the energy market.
Q: How has the industry reacted to the latest DCC go live delay?
A: I think industry was obviously disappointed by the delay and at this stage of proceedings delays don’t help. I think we’ve got to be very sensible about this now. It’s not a case of picking fights, we’ve got to understand how we get to and over the next hurdle.
Hopefully the DCC live will be in the next few days so we’re not looking at a huge delay at this point, but there is not getting away from the fact that the next two quarters are critical to the programme.
Q: Is the 2020 deadline achievable or should it be moved back?
A: Let’s get the next two quarters out the way, let’s see how much progress we’ve made in that time, let’s see if we’ve got SMETS2 coming through and on the wall, let’s see when the next releases are planned for, let’s get more transparency in DCC processes and faith in their decision making, then we can look at the broader issues.
The biggest call is for everyone to take a pragmatic approach to this. It’s obvious how important it is to the future of the industry and its clear we need to get this done, but let’s be sensible about this. In terms of leaving the EU and smart meters, Brexit can be a little bit of a red herring.
Q: How has Brexit and talk around triggering Article 50 impacted on the sector?
A: There’s an element of we just must carry on as we are because the industry has a duty to continue provide electricity and gas to its customers.
You’ve already seen some of the impacts starting to feed through in commodity prices because of the impact of the pound. I think there are longer term issues we need to address on how we access the internal energy market and how work within that.
Also, you can’t hide from the point we are still members of the EU and will be for a good couple of years yet and still have to work to deliver everything we’re committed to under the EU regime and work in the background to ensure we deliver the best for the energy sector in any Brexit scenario.
Q: Ofgem stated it would not go ahead with the CMA’s database remedy unless it could make it work. What is your view on that statement?
A: I don’t think you should go ahead with the database if you can’t prove it can work. That will ultimately be a waste of customers’ money. I think engagement is or the trailing of engagement is a vital part of this process. And I think it’s important everyone gets involved as quickly as we possibly can. Now is not the time for holding back on any of this. As an industry, all players need to step up and need to be seen to be working with Ofgem and others to see what we can do here.
Q: Theresa May mentioned increasing intervention in markets, such as the energy market. Would this, such as extending the CMA’s recommended price cap a good thing?
A: We’ve had two years of the CMA with tens of millions spent on the investigation and I think really we need to draw a bit of a breath, deliver on the remedies and actually get those working before we look at any other interventions. The best result for everyone is a market that works for everyone.
There is no opportunity for resting on laurels here and we need to make sure we’re being very transparent on what we’re undertaking to engage those customers not benefiting from the market. If you get those people engaging and those people on the best tariffs, there is no need for government intervention.
Q: How has the changing political landscape impacted on the sector?
A: We have as an industry suffered from a lot of chopping and changing since the last general election, and latterly with Brexit with changes with Decc going and BEIS coming. On my count, we’ve had five minister with responsibility for smart metering!
No one ever comes up to me and says we’ve run out of money, what they do say is where is the framework for me to invest and where do I put my money? You’ve seen this with us slip even further down the EY index. We’re still sliding the wrong way. That can’t be a good thing. One of the things we desperately need from govt is this direction.
That’s what we’re crying out for.
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