RIIO-2: Ofgem consults on tougher price controls for networks

Last week Ofgem has published its consultation for the next round of price controls for energy networks, known as RIIO-2. RIIO-1 had been strongly criticised for allowing network companies to generate above average levels of returns on businesses that are seen to be less risky than the wider economy. Network companies have been earning returns…

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The rise of the corporate PPA

  Power Purchase Agreements (or “PPAs”) have been around for a long time, as agreements between market participants for the offtake of electricity from generating facilities. However, the past few years have seen the rise of the so-called “Corporate PPA” where companies whose business is not related to energy are procuring the electricity the use…

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Updating frequency control and reserve markets

In December, National Grid published a new roadmap for its frequency control and reserve markets, setting out the principles which are to govern the development of balancing services products with a view to providing greater clarity and investor certainty. Described in more detail below, the changes are designed to simplify the procurement process and allow…

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Helm’s proposal for a default electricity tariff could go further

In my previous post, I described the findings of Dieter Helm’s review into electricity pricing. Here I will explore in more detail the section on supply costs and his recommendation that a default electricity tariff be implemented, which is particularly relevant in light of the legislation to cap electricity prices which is currently passing through…

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Is Secure and Promote delivering for retail competition?

On 25 July, Ofgem launched a consultation as part of its review of the Secure & Promote licence condition. Secure and Promote was introduced in 2013 to improve liquidity and market access for small and new entrant electricity suppliers. Small suppliers face a number of challenges in their electricity procurement – typically they do not…

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Helm energy price review: time to confront the sacred cows

The Government has this week appointed Dieter Helm, professor of economic policy at Oxford University, to lead a review into the cost of energy. He will chair a panel of experts including Nick Winser, executive director at National Grid and former Conservative MP Laura Sandys, who will examine the entire electricity supply chain and consider…

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