The Labour Party’s Bringing Energy Home plan, published on 16 May, set out the party’s proposals for bringing GB’s energy networks back into public ownership. In doing so, they firmly switch the political spotlight from suppliers on to network companies and challenge the industry more generally on fairness and its own efficiency. We look more closely at the plans in this week’s Energy Perspective, arguing that while the party’s ambition for ownership change may never be achieved, the proposals offer a challenge to those who believe in the market to deliver decarbonisation, particularly with regards to equity, vulnerability and cost to consumer.
The speech that Chair of the Competition and Markets Authority (CMA) Andrew Tyrie gave to the Social Market Foundation on 8 May follows up reform proposals from February. In this week’s Policy section, we discuss it further, suggesting it was an important speech from Tyrie that was assertive in its questioning of how markets, especially energy, banking and insurance, serve vulnerable customers, including those who are “time poor”. We await the government’s response to the CMA’s proposals to inform the discussion further.
We find, in this week’s Regulation section, that the expected cost of delivering faster and reliable switching to customers has risen. The news comes courtesy of the regulator’s Full Business Case for Ofgem’s Switching Programme. We suggest it is disappointing but well-precedented for an industry programme to see its projected costs rise and that Ofgem continues to highlight the benefits consumers should see – which are substantial – but it is becoming less clear that they outweigh costs.
In our Industry Structure section, we look more closely at the Q119 results from Innogy and E.ON. The general consensus here seems to be a notable profit squeeze arising primarily from the default price caps. In the case of E.ON, that squeeze is material enough to be impacting of overall Group financial performance and also expectations going forwards.
In this week’s Nutwood, Cornwall Insight’s Dr Craig Lowrey discusses in detail how various global pressures are continuing to overshadow market sentiment and direction in the crude market.