When the Competition and Markets Authority publishes the conclusions of its landmark investigation into the energy sector this week, it’s a fair bet it won’t dominate the news agenda the same way its launch did two years ago. There is the small matter of timing: the watchdog will be publishing on the morning of the EU referendum result (“not the ideal day”, a spokesman concedes). But a lot has changed in two years, too. Back in early 2014, energy companies were public enemy number one after making a series of inflation-busting price rises. Ed Miliband’s Labour Party was threatening to impose a price cap amid allegations of profiteering by the Big Six suppliers. Downing Street had intervened to broker a deal to trim prices by cutting the “green crap”. Ofgem, the energy regulator, suggested “tacit co-ordination” between major firms and said a CMA investigation would “once and for all clear the air”. Now, almost three years since the last round of Big Six price rises, and with prices having actually fallen, the eye of the political storm has moved on. The CMA has already dismissed allegations of a “cartel” and made clear its recommendations will stop far short of a Big Six break-up.
Telegraph 19th June 2016 read more »
Times 20th June 2016 read more »
FT 20th June 2016 read more »
The six big domestic energy companies are doomed as millions of customers desert them for independent suppliers that are eating away at their “broken” business model, the head of the UK’s fastest-growing energy company has claimed. Ben Jones, managing director of Extra Energy, which has signed up 524,000 customers since its launch in the UK in April 2014, believes that the start-up is on track to overtake RWE npower in terms of overall customer numbers by 2020. Speaking as the Competition and Markets Authority prepares to issue final remedies for the energy sector on Friday after a two-year market investigation, Mr Jones called for the break-up of the Big Six and greater transparency on pricing. “It’s a 35-year-old business model and it is broken,” Mr Jones said of npower, where he worked for 13 years, most recently as its head of customer serv ices. “The Big Six need to be forced to change the way they operate. They are there for the taking.”
Times 20th June 2016 read more »
Technically speaking of course there’s nothing to stop the UK pursuing a sustainable energy strategy outside of the EU, but I suppose the summary is that it would help considerably if we stayed in if (especially) we take broader political factors into account. I shall discuss this later on in this post. Despite the much publicised battle over ‘state aid’ for Hinkley C, whereby the UK has to get special permission from the European Commission to give ‘state aid’, the impact would be relatively small. Delays in giving state aid clearance are hardly an important factor in in the non-delivery of nuclear power in the UK (see other posts!). Moreover, it is the UK Treasury that is proving (understandably) reluctant to dole out the multi-billion £s worth of loan guarantees for Hinkley which have been authorised by the EU. I would argue that the political context post Brexit will be the crucial determining factor in shaping the UK’s energy trajectory, and I believe quite firmly that this would be very damaging for sustainable energy strategies. As I argued in a previous blog UKIP are likely to be big gainers post Brexit.
Dave Toke’s Blog 19th June 2016 read more »
The chief executive of the Renewable Energy Association – the biggest such trade body in the UK – has welcomed the call by MPs to break up the National Grid monopoly. MPs on the Commons’ Energy Committee made the call in their report last week on Low Carbon Infrastructure, to which the REA provided evidence. Dr Nina Skorupska, CBE, REA Chief Executive, said: “This report couldn’t be more timely. With the industry moving towards a decentralised system, it is clear the government and regulators needs to catch-up. Energy storage, DSR and smart grid upgrades are all vital and are quickly becoming a reality.
Scottish Energy News 20th June 2016 read more »