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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Political dispute in the Balkans causes electricity system frequency deviation across Europe

I have written several times about the challenges facing system operators as the energy transition sees increasing amounts of intermittent generation increasing frequency variation. However, between mid-January and early March, there was a persistent frequency deviation that caused clocks to lose time across the 25 countries connected to central Europe’s synchronous electricity system that had…

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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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National Grid issues gas deficit warning as cold weather bites

As the UK shivers under attack from the “Beast from the East” – this morning National Grid issued a Gas Deficit Warning, indicating that the gas system was almost 48 million cubic metres (“mcm”) short relative to forecast demand. At 05:00, National Grid was expecting demand to reach 395 mcm for the day, with around…

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Responding to the challenges of transmission system transformation

Last week, National Grid outlined its plans for it system operator business, following the decision by Ofgem last year that greater separation of this activity was needed from the rest of the National Grid business in order to better manage conflicts of interest. “Our long-term vision is for an Electricity System Operator (ESO) that thinks…

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T-1 capacity auction: gas wins; consumers lose

Last week saw the first T-1 capacity auction since the GB capacity market launched, clearing in the 14th round of bidding at £6 /kW/year. 10.7 GW of de-rated capacity entered the auction, with 5.8 GW of that being successful in securing contracts. Added to the 47.5 GW that was secured in the T-4 auctions this…

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Retail energy market: does size matter?

The collapse of GB Energy in November 2016 was seen by many as the start of a market correction, with other small independent suppliers being seen as vulnerable to rising prices and higher volatility. In the event, 2017 was quieter than expected – market prices and volatility both stabilised, and there were no further exits…

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