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19
Oct

Energy GraphSSE, the UKs second largest energy generator, has recently announced plans to introduce a new, transparent approach to the management of its electricity supply. The innovative solution will see SSE auction all of its energy generated and demand purchased on the day ahead market.

Historically, it is commonly known within the industry that all energy suppliers only trade the difference between generation and daily demand. By trading gross volumes on the day ahead market, SSE hope to dramatically improve the liquidity, transparency and credibility of the market and help with the development of a sensible, tangible pricing index. The initial phase will see 25% auctioned on the N2EX trading platform by November 2011, with a gradual increase to incorporate all supplies by the end of the financial year.

So what does this mean for Torse’s customers? Hypothetically it allows clients to fully understand the costs associated with energy purchasing, profit margins of suppliers and will help to simplify the ever complex pricing structures. It will reduce barriers to entry within the supply industry, promoting competition across the board and in theory drive down prices in the long term. Here at Torse, we applaud SSE’s initiative, however the success of this scheme is dependent on other suppliers willingness to adapt. As yet, there has been no comment from the remaining 5 of the ‘big six’.

We look forward to bringing you further updates regarding SSE’s progress and the adaptation of other key UK energy suppliers.

Category : Energy Companies / Energy Prices / Payment

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