Archive for August, 2013

Many would agree that the monopoly of the Big Six on the industry is in serious need of re-assessment and Ofgem believe that greater market liquidity is the solution – this will allow more suppliers and generators to enter the market resulting in fiercer competition. As a result of pressure to increase market-liquidity from smaller market players, Ofgem released its report on ‘Wholesale power market liquidity: final proposals for a ‘Secure and Promote’ licence condition – Draft Impact Assessment’ 12th June 2013. The proposal made the following key recommendations:

• Facilitating entry and competition by smaller suppliers using the Supplier Market Access (SMA) rules
• A change to license conditions forcing major power generators to release intended trading prices 2 years prior to delivery allowing small competitors to hedge in the forward wholesale market
• Significant fines to major firms who do not sell and negotiate fairly at all times – enforced deadline to ensure they acknowledge and respond to requests by smaller suppliers to buy energy and they will no longer be able to refuse those deemed reasonable
• An investment of £4m total set up cost and annual ongoing cost of £14m. continue