9 May 2012: Energy Bill Promised Soon
At the state opening parliament the Queens Speech announces that there will be a new Energy Bill: "My Government will propose reform of the electricity market to deliver secure, clean and affordable electricity and ensure prices are fair". Apparently publication of the formal Bill is being delayed so that, by publishing the Bill in draft for pre-legislative scrutiny, its passage through Parliament will be speeded up. There is a press release on the DECC website here and more information is available in a briefing note published on the Cabinet Office website here.
4 May 2012: Project Transmit - Charging SCR Conclusions
The Significant Code Review into electricity transmission charging (part of Project Transmit) reaches its conclusion with Ofgem confirming its views on the options for change to the TNUoS (see News, 20 December 2011): "an improved form of ICRP [Investment Cost Related Pricing] is the best way forward". NGET is now to be directed to raise a change to the CUSC charging methodologies to implement Improved ICRP. Whilst this will include differential charging for intermittent generators, the socialised or postage stamp model is not expected to be considered further. The document can be found on Ofgem's website here.
2 May 2012: The Role for Gas
Following the earlier announcement of a new "gas strategy" (see News, 17 March), DECC has published a call for evidence on the role of gas in the Electricity Market. Notwithstanding the past and present emphasis on renewable and nuclear technologies, it stated that "Government wants to ensure we take a flexible approach to delivering a secure, affordable decarbonised electricity sector and is therefore interested in views on the role of gas generation through to 2020 and beyond". The call for evidence is open until 28 June and can be found on the DECC website here.
2 April 2012: Grid Construction Securities
Ofgem has announced approval of a new system for securing construction works by Users in a CUSC change known as CMP192 (see news, 26 July 2011). The new system is expected to reduce most developer's security requirements from next Spring, but the long-mooted proposal to extend the financial commitments to be given by closing generators (from 2 years to 4 years, as advocated by NGET) was not approved. The decision letter is on Ofgem's website.
28 March 2012: Cash-out Review
Ofgem announced today that in the summer it will launch a "significant code review" (SCR) into the imbalance cash-out prices used in the British electricity market. The SCR will take place in parallel with other significant changes including electricity market reform promoted by the Government, Ofgem's own liquidity proposals and EU developments (see previous article). Details are available here.
28 March 2012: Implementing the European Electricity Target Model
Ofgem has today issued an open letter seeking views how the ongoing British electricity market reforms interact with those at the EU level, specifically the European electricity target model for market integration (market coupling, inter-day trading, balancing and long term transmission rights) some features of which must be implemented by 2014. Asserting that the Third Package of European reform will have far reaching and significant impacts in Britain, Ofgem invites comments on how they should respond. The letter is available on the Ofgem website here and is open for comments until 22 May.
17 March 2012: Gas Strategy
In a joint announcement by Chancellor or the Exchequer, George Osborne and Energy and Climate Change Secretary Edward Davey, the Government is to have a new gas generation strategy in the Autumn. Linking the EMR proposals for an EPS and Capacity Market with a call for evidence on the role for gas in the electricity market, Davey was quoted as saying "I want a decarbonised grid in the long term, but we can't take our foot off the gas for some time yet". Osborne asserted "The Government is providing certainty to businesses that want to invest in gas". The press release is on the DECC website here.
8 March 2012: EMR Conflicts and Synergies
Ofgem and DECC have today published an open letter seeking views on the potential synergies and conflicts of interest arising from the designation of NGET as GB System Operator as the delivery body for the proposed Capacity Market and Feed-in-Tariff Contracts for Differences. A wide range of potential mitigation measures are noted including ring-fencing elements of NGET's business, management of access to or use of information, transparency rules, and even legal or ownership unbundling or changes to the design of EMR delivery arrangements. The letter is available on the Ofgem website here and is open for comments until 5 April.
1 March 2012: Enduring Offshore Transmission
In the continuing saga of offshore transmission, DECC and Ofgem published a report on their Offshore Transmission Coordination Project. Alongside this, a new consultation gives Ofgem's initial proposals to help ensure coordinated networks can be delivered despite the offshore transmission regime. Potential improvements include changes to the network planning process and a proposed approach to anticipatory investment in offshore transmission infrastructure. The report is available on the Ofgem website here and the consultation, open for comments until 26 April, is here.
22 February 2012: Liquidity Intervention
In a follow-up to proposals last year on the Retail Market Review (see news 22 June 2011), Ofgem is pressing ahead with mandatory auctions for the "big six" vertically integrated companies. This would require them to auction at least 25% of their generation output on a monthly basis, with products available over a range of time periods up to three years forward. Presented as a discussion document, Ofgem say in it that they intend "to work with industry to get the details right and will now embark on a period of market testing and further design development". However as yet no firm implementation timetable is clear. The deadline for comments is Tuesday 8 May 2012, and the consultation can be found on the Ofgem website here.
9 February 2012: Renewables Obligation Buy-out Price 2012/13
Ofgem has today announced the buy-out price of GBP40.71/MWh for the coming year, a 5% increase on the current value. Ofgem's press release is available here.
7 February 2012: Unconventional Gas Assessment
Ofgem has published an interesting study by Poyry into the possible impact of shale gas and other types of unconventional gas on European energy markets. The report, first made available to Ofgem last summer, can be found on Ofgem's website here.
20 December 2011: Project Transmit - Ofgem Points the Way
In the latest news on Project Transmit, Ofgem is consulting on its views on the potential options for change to the TNUoS and assessment of the impacts. Ofgem's initial view is that improving the current Investment Cost Related Pricing (ICRP) approach is "the right direction for transmission charges", and subject to the results of the consultation, has ruled out socialised (postage stamp) charging as an option, although maintaining the status quo appears a close second. An important features of Improved ICRP is differential charging for intermittent generators, with other low load factor plant benefitting too. The consultation is open until 14 February 2012 and can be found on Ofgem's website here. Accompanying analysis from Redpoint is here.
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