Five things we learnt from Energy Spectrum | 656

With an Ofgem review of the microbusiness sector in the offing, the increasingly competitive nature of the business energy market – which is also being radically overhauled by innovation – means that the regulator would be wise to take a wider, overall market view in its review process. This is the conclusion of this week’s Energy Perspective, which analyses in further detail how innovation and competition are decoupling the business electricity and gas markets, finding that regulation will need a much clearer framework as the markets become ever more diverse.

Following its suspension, the success of the Capacity Market (CM) scheme now depends on a swift resolution to the ongoing state aid challenge. In this week’s Policy section, we discuss BEIS’s publishing of its response to an earlier consultation on amendments to the CM which, among other points, outlines draft regulations that will enable a replacement T-1 auction for 2019-20 delivery.

The Data Communications Company’s costs are increasing year-on-year, and substantially above its forecasts – most recently seeing it failing to justify £132.48mn of internal costs it forecast to be incurred over 2018-26. In this week’s Regulation section, we find that Ofgem has seen little effort to budget for efficiency costs as, on 27 February, it announced that the business had failed to factor into its future costs any efficiency improvements or headcount reduction plans.

BP’s recent Energy Outlook 2019 is analysed in our Industry Structure section, where we suggest that the forecast emphasises that there is more to decarbonisation the power sector. Specifically, that a growing and wealthier population will demand more energy and while lower energy intensity will trim that growth, it will not be to the extent that global emissions reductions will be feasible without intervention.

Centrica’s publishing of its preliminary results for 2018 on Thursday 21 February is the subject of this week’s Nutwood, written by Cornwall Insight Associate Peter Atherton. With the results demonstrating that every major business unit fell short, Atherton suggests there are three possible futures open to Centrica.

Related thinking

Low carbon generation

Our Renewables Pipeline Tracker: In with the new – scoping projects and progression through planning stages

Our latest Renewables Pipeline Tracker was published on 11 June, and this blog provides a summary of some of the recent developments in our coverage of the pipeline for new build and repowering renewables assets in GB. What’s new? Seabed leasing rounds, scoping projects and CfD announcements Since our previous...

Regulation and policy

How will consumers take to Market-wide Half Hourly Settlement?

Ofgem published its decision to implement the move to Market-wide Half Hourly Settlement (MHHS) on 20 April. This confirms plans to move to new settlement arrangements over a four and a half year time period, with the Elexon-led Design Working Group’s Target Operating Model to be used as the blueprint. Meters...

Regulation and policy

Ofgem raises modifications ahead of RCC and new switching arrangements

The latest edition of our Faster Switching Service Report due to be issued this week includes the latest developments in Ofgem’s Switching Programme and the associated Retail Energy Code (REC). Launched in November 2019, the Retail Code Consolidation (RCC) Significant Code Review (SCR) set out Ofgem’s intention to amalgamate the...

Net zero corporates and ESG

Get ready for climate risk reporting?

On 30 April we released the latest copy of our Energy net zero. The publication takes an in-depth look at the UK's transition to a low carbon economy. The below is an extract from our Energy Perspective on Task Force on Climate-related Financial Disclosure (TCFD). The article was originally published in the...

Regulation and policy

Calm before the storm? 2021 energy supplier compliance developments

The latest update to our Energy Supplier Compliance Portal went live on 4 May and includes changes to the compliance landscape during February to April 2021. While the previous quarter’s update reflected new principles resulting from Ofgem’s Supplier Licensing Review (SLR) and protections for prepayment meter customers facing self-disconnection, Q121...

Regulation and policy

Electricity transmission charging reform – overtaken by changing priorities?

Charging for the transmission network is never out of the development process for long. From major reviews, such as that initiated under Project Transmit in 2010, to significant reforms such as removing the triad benefit from distributed generation in 2018, and a host of smaller developments, change seems the only...

Low carbon generation

How nuclear energy can help the UK reach its net zero goals

This article was originally written in Energy Spectrum on 21 March 2021. To find out more about a subscription to Energy Spectrum, please contact Nick on There are several challenges to reaching net zero, where its proponents believe nuclear could add value. Some of tomorrow’s main issues concern: How to provide low...

Low carbon generation

Nuclear energy and its potential importance for net zero

This article was originally written as a longer piece in Energy Spectrum on 21 March 2021. To find out more about a subscription to Energy Spectrum, please contact Nick on Nuclear energy has been an integral part of the UK’s electricity system for many decades. Currently, nuclear provides around...