The energy industry was watching Wednesday’s Queen’s Speech with eager anticipation. The snap general election and too-ing and fro-ing of manifesto pledges had led to a great deal more uncertainty across the sector, and any greater understanding of the upcoming legislation planned by the current Government would be a welcome relief.
Energy Price Cap
Whilst mention was made of the energy price cap, there is still uncertainty around how, or indeed if at all, it will be implemented. Utility Week led on the fact that Greg Clark had written to Ofgem to ask them to advise on implementing a solution, which many think means that the Government have decided to ‘pass the buck’ down the line to Ofgem. Industry commentators have suggested that this means that a very much watered down version of the cap will be implemented, perhaps in the form of a voluntary code. Cornwall Energy have highlighted that the Government had confirmed that this will be publishing further information on the subject, in the form of a Green Paper. This means that any process will be consultative, and possibly very long-winded. We don’t expect a speedy resolution to this manifesto pledge!
The government reaffirmed its commitment to the smart metering roll out via the Queen’s Speech, which will have left many across the industry breathing a huge sigh of relief. However, much has been made of the Government’s comments around changing the effective end date of the smart roll-out – from 2020 to 2025. Utility Week and several other commentators have suggested that this gives suppliers the breathing room that they have been after for a number of months, although there is little confirmation as to what this actually means for Suppliers targets, and whether or not they should still be aiming for completed roll-out by 2020. The briefing notes on this element of the speech are indeed brief – and the industry will be looking for further clarification on this element over the coming weeks and months.
So what have we learned? The only certainty from this week’s statement is that the Smart Meter roll out is continuing – over and above that, the industry will have to wait a little longer for the clarity it seeks.