This week’s Energy Spectrum overview | 8 May 2018

In this week’s Energy Perspective, we examine the progress in setting the broader energy price cap. The challenge now, we argue, transfers to Ofgem and the industry in implementing it. Ofgem has been seeking views on different ways the various elements of the price cap might be calculated through a series of working papers and we discuss the thinking that has emerged so far and the challenges ahead.

In this week’s Policy section, we look into new estimates from financial think tank Carbon Tracker that predict a steep rise in EU Emissions Trading System (EU ETS) prices if the European Commission ultimately legislates to align the bloc’s current emissions targets with the goals of the Paris Agreement. We argue that after years of negligible effect on power station economics, the EU ETS price increase could finally provide the necessary price signal on a pan-European basis.

The section also examines the BEIS Public Attitude Tracker statistics, which reveal a new peak in the level of public support for renewables.

In this week’s Regulation section, we review the news that there will be no mid-period review from Ofgem on the RIIO-ED1 price control after it was found that if a full review was undertaken it could damage investor confidence. The move was criticised by Citizens Advice as a “missed opportunity” for the regulator to rectify handing companies “billions in unjustified profits”. However we argue that on balance Ofgem made the right decision to maintain regulatory confidence.

We also discuss Ofgem’s recently opened consultation on fully implementing the Competition and Markets Authority’s recommendation to fully remove the whole-of-market requirement from the Confidence Code and the outcomes of the Regulatory Policy Institute’s annual conference.

In our Industry Structure section this week, we discuss the implications of the sale of Flow Energy to Co-operative Energy after a majority of shareholders voted to accept a purchase offer.

The section also reviews new recommendations from the Energy Technologies Institute to reduce the costs of new nuclear power generation in the UK, which the Nuclear Industry Association says shows that new nuclear “need not be expensive”. We argue that while the report identifies areas throughout the new nuclear design and build process where project costs can be reduced, it is worth noting that four of the eight prioritised actions fall within the political and regulatory context category.

In this week’s Nutwood section Cornwall Insight Associate Peter Atherton looks at the future of Iberdrola after the company reported strong Q1 2018 results.  He examines the Iberdrola’s performance and long-term strategy alongside the diminishing importance of the UK to company.

What is the Energy Spectrum service?

Our Energy Spectrum service comprises two publications designed to ensure you stay ahead of the game.

  • The Daily Bulletin – providing you with up-to-date information, collating the most important political, regulatory and industry developments from the previous 24 hours
  • Energy Spectrum – offers the latest news and expert comment and is seen as an essential source of analysis and insight on developments in the British energy markets
    Sign up to a free trial

Related thinking

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...

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...

Commercial and market outlook

April showers bring DUoS for every half hour

Almost two years ago, Ofgem approved DCP268 DUoS Charging Using HH Settlement Data, which will move existing non-Half Hourly (NHH) settled demand customers onto time-based Half Hourly (HH) Distribution Use of System (DUoS) unit rate charges. With the modification to be implemented in the DCUSA on 1 April, we revisit...


Introducing Energy Spectrum Europe

Cornwall Insight is pleased to announce the launch of Energy Spectrum Europe. This new addition to the Energy Spectrum stable will provide the authoritative, independent insight and analysis of energy markets for which its peers covering Great Britain, Ireland and Australia are rightly renowned. Every month Energy Spectrum Europe will...

Low carbon generation

New transmission charge forecast will help generators managing cost uncertainty and volatility

Transmission network use of system (TNUoS) charges represent a significant proportion of operating costs for many renewables generators, often exceeding 50% of annual running costs. For some, as recently highlighted by SSE in a recent report and to Members of the Scottish Parliament, they could present a barrier to investment in generation...