Business Energy Markets 2004

Size: px
Start display at page:

Download "Business Energy Markets 2004"

Transcription

1 November 2004 Prepared by: Nigel Cornwall & Robert Buckley Cornwall Consulting

2 Disclaimer While Cornwall Consulting considers that the information and opinions given in this report and all other documentation are sound, all parties must rely upon their own skill and judgement when making use of it. Cornwall Consulting will not assume any liability to anyone for any loss or damage arising out of the provision of this report howsoever caused. The report makes use of information gathered from a variety of sources in the public domain and from confidential research that has not been subject to independent verification. No representation or warranty is given by Cornwall Consulting as to the accuracy or completeness of the information contained in this report. Cornwall Consulting makes no warranties, whether express, implied, or statutory regarding or relating to the contents of this report and specifically disclaims all implied warranties, including, but not limited to, the implied warranties of merchantable quality and fitness for a particular purpose. Cornwall Consulting Heath Farm Cottage Paston North Walsham Norfolk NR28 0SQ Tel: +44 (0) Fax: +44 (0) Cornwall Consulting Report for Energywatch 2

3 Report Contents 1. Executive Summary Approach and Methodology Key Findings Recommendations Market Overview Market Context Competition Concepts Wholesale Energy Delivery Taxes and Levies Competitive Business Electricity and Gas Markets Electricity Market Size Market Segmentation - Supply Market Segmentation - Demand Pricing Developments Gas Market Size Market Segmentation - Supply Market Segmentation - Demand Pricing Developments Supply Chain Issues Wholesale Energy Markets Energy Cost Components Electricity Wholesale Costs Supplier Margin Delivery Charges Obligations, Levies and Taxes Metering and Data Charges Gas Wholesale Costs Supplier Margin Transportation Charges Metering Charges Levies and Taxes Energy Cost Breakdown Analysis Supply Contracts Contract Duration Pricing Structures 49 Cornwall Consulting Report for Energywatch 3

4 All Inclusive Pass Through Indexed Arrangements Electricity Contract Pricing Components Non-half Hourly Half Hourly Gas Contract Pricing Components Indexed and Flexible Pricing Contracts Energy Service Contracts Brokers and Agents Brokers Agents Purchasing Methodologies and Contracting The Energy Supply Contracting Process Larger Users Electricity Gas Public Sector Users Smaller Users Out of Contract Arrangements Competitive Market Dynamics Customer Responses Pricing and Competition Levels Price Levels Supplier Responses Service Issues Energywatch Complaint Information Energy Policy and Regulation Development and Direction Department of Trade and Industry Economic Regulation The Gas and Electricity Markets Authority (GEMA) and the Office for Gas and Electricity Markets (Ofgem) The Electricity and Gas Supply Licences Exclusion of Cross Subsidy Meter Reading and Theft of Energy Information Provision to Customers Information Provision to Ofgem and GEMA Gas Transportation Charges Guaranteed Standards and Payments Codes of Practice Deemed Contracts Supplier of Last Resort 85 Cornwall Consulting Report for Energywatch 4

5 Transfer Agreements The Customer Transfer Programme Gas Production Financial Services Regulation Competition Policy Sustainable Development The Carbon Trust Customer Representation Implications for Business Customers Customer and Other Stakeholder Views The View of the Office of Gas and Electricity Markets Other Stakeholder Views Level of Competition and Assessments of Trading Conditions Smaller Customers Larger Customers Smaller and Independent Suppliers Larger and Integrated Suppliers Key Themes Issues which May Inhibit Competitive Dynamics Smaller Customers Larger Customers Smaller and Independent Suppliers Larger and Integrated Suppliers Key Themes Outlook for Competitive Supply Markets Customers Smaller and Independent Suppliers Larger and Integrated Suppliers Key Themes Broker and Agent Conduct Brokers Agents Comment and Conclusions Context Opinion on Supply Competition to Business Customers Level of Competition Supplier Numbers Level of Offers Recommendations Issues that Inhibit Competitive Dynamics Wholesale Markets Market and Regulatory Complexity Recommendations 141 Cornwall Consulting Report for Energywatch 5

6 Prospects for Competition Recommendations Role of Intermediaries Recommendations 144 Appendix A: Energywatch Complaint Codes by Category 145 Appendix B: Text of Letter Seeking Stakeholder Views 146 Appendix C: Respondents to this Review 147 Cornwall Consulting Report for Energywatch 6

7 List of Tables Table 2:1 Market Access Thresholds for Electricity and Gas Supply Competition 14 Table 2:2: Business Energy Consumption, 2003 and Table 2:4: Business Electricity Consumption in Great Britain 20 Table 2:5: Electricity Generating Capacity in Great Britain Table 2:6: Electricity Generating Capacity in England and Wales Table 2:7: Major Suppliers and their Key Acquisitions Summer Table 2:8: Shares of the Business Electricity Market Table 2:9: UK Business Gas Consumption 27 Table 2:10: UK Offshore Gas Production by Field Operator Estimated Annual Figures 28 Table 2:11: Gas Supplier Market Shares by Volume Table 3:1: Profile Types for Non-half Hourly Metered Business Customers 43 Table 4:1: Headline Characteristics of Typical Electricity and Gas Supply Contracts 49 Table 4:2: Summary of Electricity and Gas Contracts to Business Customers 52 Table 5:1: Customer Approaches to Energy Procurement 69 Table 5:2: Overview of Aggregate Data Requested from Energy Advisors 70 Table 5:3: Average Contract Prices Secured by Energy Advisors Table 5:4: Suppliers Approached and Responding to Customer Request for Quotations 72 Table 5:5: Offers Received Average and per Supplier Responding 73 Table 5:6: Trends in Energy Supplier Activity Average Responses to Requests to Tender from Major Advisors 74 Table 5:7: Summary of Complaints Received by Energywatch from Business Customers November 2003 to May Table 5:8: Main Complaint Types Received by Energywatch from Business Customers November 2003 to May Table 7:1: Summary of Ofgem s Business Market Framework Electricity 95 Table 7:2: Summary of Ofgem s Business Market Framework Gas 96 Table 7:3: Summary of Ofgem s Conclusions on Business Markets Electricity 97 Table 7:4: Summary of Ofgem s Conclusions on Business Markets Gas 97 Table 7:5: Summary of Customer Views 99 Cornwall Consulting Report for Energywatch 7

8 Table 7:6: Summary of Supplier Views 100 Table 8:1: Supplier Exits from Competitive Energy Supply Markets 131 Table 8:2: Regulatory Investigations, Processes and Reviews Triggered by Concerns over Wholesale Gas Prices 138 List of Figures Figure 2:1 Electricity and Gas Price Breakdowns Summer Figure 2:2: Trends in Year Ahead Wholesale Gas and Power Prices 2002 to Figure 2:3: Trends in Industrial Electricity Prices Annual Averages 26 Figure 2:4: Trends in Industrial Gas Prices Moving Annual Averages 31 Figure 3:1: Physical and Financial Flows Embodied in Customer Bills 35 Figure 3:2: Overview of the Electricity Supply Infrastructure in Great Britain 38 Figure 3:3: Supply Chain for the Business Gas Markets - Physical and Financial Flows 44 Figure 3:4: Indicative Cost Components of Business Energy Bills 47 Figure 5:1: Overview of Typical Business Procurement Processes 61 Figure 5:2: Example Timeline as Established in the 1990s for a Formal Tendering Process Undertaken by a Larger Energy User 62 Figure 5:3: Complaints Received by Energywatch from Business Customers by Supplier November 2003 to May Figure 6:1: Overview of Ofgem Objectives and Guidance 83 Figure 7:1: Gas Prices Payable by a Major Industrial Company for Sites in Germany and Italy 103 Figure 7:12: Broker Commissions Paid by a Major Supplier on its Electricity Contracts 126 Figure 8:1: Gas Contract Trading Activity 136 Figure 8:2: Indicative Hedging Positions of Major Integrated Electricity and Gas Suppliers 137 Figure 8:3: Key Gas Cost Markers in Price Setting to Major Customers 137 Cornwall Consulting Report for Energywatch 8

9 1. Executive Summary 1.1. Approach and Methodology 1. This is the first analysis of supply competition in business energy markets since the dramatic turnaround in wholesale prices. The report is designed to provide a comprehensive overview of the functioning of these markets from the perspective of the customer as well as capturing the key trends and developments including the October 2004 contracting round and the outlook beyond. The report is not just a factual description of market scale and stakeholder views rather it is also intended to explain options and choices to purchasers. 2. The business energy markets are complex and fast moving. It is very difficult to gain a view across them because: a. there are a series of sub markets, some with strong regional characteristics (for smaller users), though clearer groupings exist around intensive (in the sense of traditional manufacturing and large scale commerce/retail) users and small and medium enterprises; b. little systematic gathering of data is undertaken by official/representative bodies, c. no established means for measuring the extent of competition is readily available; and d. they can be very dynamic, with changes closely linked to wholesale markets and supplier strategies seemingly varying from contract round to round. 3. Nonetheless, with data from two intermediaries, written responses and verbal responses from customers and other market participants, and a series of more detailed interviews and access to Energywatch complaints data, substantive analysis has been undertaken. Energywatch and Cornwall Consulting would like to express their gratitude to all those who contributed to this process. A list of participants is provided at Appendix C. 4. The analysis has taken longer than expected to conclude given the dynamic nature of the markets involved and as suppliers proved much more interested in contributing their views than we expected. Likewise some on the customer side proved more difficult to engage than expected. We would like to express our thanks to all those that participated in our review of stakeholder opinion, particularly to John Hall Associates and EnergyQuote for their provision of the price and offer data analysed in Section 5. Cornwall Consulting Report for Energywatch 9

10 1.2. Key Findings 5. Customers are experiencing very significant price increases driven by much higher prices in wholesale markets: a. prices for annual fixed rate electricity contracts renewed in 2004 are 30% up on levels struck in ; b. prices for annual fixed rate firm gas contracts renewed in 2004 are 40% up on levels in ; c. prices for annual fixed rate interruptible gas contracts renewed in 2004 are 45% up on levels in ; and d. the consistent rise in wholesale energy prices has resulted in many larger customers opting to buy on short-term pricing mechanisms, rather than their to now normal practice of fixed price annual contracts, as a means of limiting cost increases. This involves a fundamental change to energy buying practices which must be understood and prepared for. 6. Supplier activity varies by sector and negotiating round. At the maximum, larger customers may secure 5 to 6 suppliers to quote for their business, although not all will necessarily submit their most competitive rates. Smaller customers participate in a regional market where competition will typically be driven by the interaction between the gas and power incumbents. Here, there is a significant need for more information and better customer understanding. 7. Whilst there are no up to date official figures, it is estimated that at least 90% of the business electricity market is serviced by seven suppliers (six integrated generator/suppliers plus British Energy). The business gas market is also concentrated, but probably to a lesser extent, than the domestic market. 8. Market risk and volatility have increased markedly, particularly following the change in electricity trading arrangements to NETA in Traded commodity markets have been created, but declining liquidity is making pricing more unpredictable and increasing market granularity. 9. Industry data problems are constraining competition. They particularly affect smaller sites (both single and multi-site), to the extent that some customers are deterred from accessing the competitive market. It is also apparent that some users may not be making the most of their positions; decision making processes can be improved, and better awareness of the 1 in delivered terms before VAT 2 in delivered terms before VAT 3 in delivered terms before VAT Cornwall Consulting Report for Energywatch 10

11 importance of prompt payment will also be likely to secure an improvement. 10. Persistent regulatory change in a fixed price environment is not helpful to suppliers and ultimately their customers, especially at the smaller end of the market where such supply terms are much more prevalent and transaction costs can be significant on a per account basis. There is also a perception that the market structure works against small players in that they are unable to provide enough resource to monitor and influence regulatory policy and the resulting market change. 11. Brokers and advisors fulfil a very important role in bringing the benefits of competition to business customers of all sizes, as they tend to be better informed and resourced than the typical individual user. However, there are worrying signs that some can use market complexity to pursue their own agendas at the expense of their customers Recommendations 12. Business energy markets are complex and much can be done to improve the lot of customers in them. Energywatch can play a pivotal role in this. 13. Wholesale market and regulatory developments are critical drivers in the business supply market. Major customers in particular do not trust the wholesale gas market any more and perceive that policy makers in general are not sufficiently aware or interested in their concerns. Energywatch should ensure customer views on these sectors are well represented to policy makers, including their current desire for a Competition Commission investigation into the sector. 14. In order to improve policy making, there is a need for much more structured and routine information gathering. This should enable clear market segmentation and measurement of competition. In particular we believe national market measurement of competition is not appropriate for the smaller user sectors. Customers will benefit from these changes, and Energywatch should encourage Ofgem and DTI to take action in this area as well as considering whether wider distribution of its own data on complaint would be helpful. 15. In addressing the business market, Energywatch should recognise different customer needs: a. practical assistance to make the best of market conditions; and b. appropriate customer championing in policy fora. 16. Practical assistance includes the provision of better information, its delivery to customers who can utilise it, and the monitoring of general market conditions. Customer championing includes representing to policy makers the interests of business customers, monitoring policy Cornwall Consulting Report for Energywatch 11

12 developments, and informing business customers of their implications. This sectoral good role would seem particularly valuable for medium and non-energy intensive larger users to bring focus to an area where there are currently disparate lobbying channels. It would require a formal mechanism to ensure proper engagement with customers, for example, through the establishment of a business user panel and regular stakeholder briefings. 17. Active consideration should be given to whether customer use of brokerage services can be improved through, for example, an Energywatch-sponsored code of practice. Its intent should be to raise the standard of service offered by all brokers in the market. Cornwall Consulting November 2004 Cornwall Consulting Report for Energywatch 12

13 2. Market Overview As well as being a major feature of the UK economy in its own right, Britain s competitive energy supply industry is essential to the well being of UK business. In 2003, business customers in the United Kingdom spent 9.9 billion on their electricity and gas. That this figure was 10% lower than four years before - despite the introduction of an energy tax 4 which raised in excess 5 of 800 million that year - suggests that they have benefited substantially from competition in the supply of these fuels. However, wholesale energy markets have turned sharply upwards since early Likewise, climate change has emerged to become a key driver of energy policy. This Section presents a headline survey of the British electricity and gas markets from the perspective of the business customer. It is designed to illustrate the role of the business energy customer within the competitive energy markets and the suppliers who serve them. By showing the scale of business electricity and gas requirements defined for the purposes of this analysis as all final use for non-domestic and non-power generation purposes it is intended to demonstrate the importance of the market in supplying them. It also aims to set the scene for later sections of the report, including a survey of recent pricing developments Market Context Today, some 28.4 million 6 electricity and 20.9 million 7 gas customers can participate in competitive energy markets in Great Britain. Of these customers, some 2.2 million are business electricity users 8 and 403,000 9 are business gas users. These markets have evolved since the mid 1980s, often requiring support from policy makers to ensure their successful development. The process of deregulating supply effectively started with the privatisation of the former British Gas Board in The new British Gas plc started life with a legal monopoly serving smaller customers (with demands of less than 732 MWh/25,000 therms a year) and, in effect, a monopoly to larger users despite an erosion of the franchises to 73MWh in The slow progress, in terms of entry 4 The Climate Change Levy (CCL) was introduced from 1 April See Section and Source: Digest of United Kingdom Energy Statistics 2004 Department of Trade and Industry 6 Source: 2002 figures, Digest of United Kingdom Energy Statistics 2004 Department of Trade and Industry 7 Source: 2002 figures, Energy Trends December 2003 Department of Trade and Industry 8 Source: Cornwall Consulting estimate 9 Source: 2002 figures, Energy Trends December 2003 Department of Trade and Industry

14 of new suppliers, prompted various regulatory interventions, including investigations by the Monopolies and Mergers Commission and the Office of Fair Trading, and the company was forced to relinquish market share and release previously contracted wholesale supplies to potential competitors. Ultimately, in 1997, British Gas plc, responding to political and regulatory pressure, broke itself up by splitting the monopoly pipeline and competitive supply businesses which now operate separately as part of National Grid Transco plc and Centrica plc respectively. In parallel, phased removal of the remaining franchise occurred from 1996 to Table 2:1 lists key eligibility thresholds in electricity and gas supply. Table 2:1 Market Access Thresholds for Electricity and Gas Supply Competition Electricity April 1990 over 1 MW qualifying maximum demand April 1994 over 100 kw qualifying maximum demand April 1998 to 1999 all users Gas 1986 over 732MWh annual consumption August 1992 over 73MWh annual consumption 1996 to 1998 all users Electricity privatisation was accompanied by parallel moves to create competition in both the wholesale generation function and supply activities. The first power wholesale market, the Pool, commenced operations from 1 April 1990, when the nation s 5,000 largest users simultaneously gained the right to negotiate a competitive electricity supply contract. This process proceeded with a pre-specified timetable for further market opening, and culminated in a fully open electricity supply market being in place by the turn of the decade. Larger customers, therefore, now have considerable experience of competitive energy supply. Liberalisation has also occurred elsewhere, most notably via the European Union s directives to open electricity and gas markets to competition. 10 For smaller users, markets have not been open as long and competition is not as well established. This distinction is important in that it underlines how business customer issues and needs differ according to customer characteristics. 10 The EU initiative to stimulate electricity supply competition has resulted in two Directives of the European Parliament and of the Council of Ministers concerning common rules for the internal market in electricity. The first, Directive 96/92/EC, was passed in 1996, to be superseded by Directive 2003/54/EC of 26 June In gas, two similar Directives have also resulted: 98/30/EC and 2003/55/EC. Cornwall Consulting Report for Energywatch 14

15 2.2. Competition Concepts Irrespective of how a competitive offer to supply electricity or gas to a business customer is presented, in preparing it, suppliers will assess separately the different costs in the supply chain, namely: energy costs (including wholesale costs, the supplier s costs of servicing the customer, and its margin); charges for using the delivery networks, from production facility to the customer s meter; and taxes and levies. Suppliers secure wholesale energy supplies to match the customer s requirements from competitive traded markets. They will also assess their costs in servicing the account and then factor in a profit margin. In the business sector, they tend to present their offers either as tailored arrangements specifically for larger customers, or as standardised products for smaller users. A breakdown of typical supply costs to smaller and larger users for electricity and gas is shown in Figure 2:1. Figure 2:1 Electricity and Gas Price Breakdowns Summer 2004 Gas - small user Gas - large user Electricity - small user Electricity - large user Energy Delivery Taxes Source: Cornwall Consulting p/kwh Notes on Figure 2:1: Prices breakdowns are Cornwall Consulting assessments intended to be representative of typical prices in Great Britain. They are shown exclusive of VAT for one year s supply for arrangements struck during August 2004 and commencing 1 October 2004 based on delivery charges and taxes current at that date. It is assumed that the large user is entitled to an 80% abatement in the climate change levy as a signatory of a climate change agreement. The Table below shows user definitions. User Billing Annual MWh Max Demand Load Factor Grid Connection Electricity - small user Quarter % Low voltage network Electricity - large user Month 7,884 1,500 60% High voltage network Gas - small user Quarter % n/a Gas - large user Month 14, % n/a Max demand data is shown hourly for electricity (in kw) and daily for gas in (MWh) Cornwall Consulting Report for Energywatch 15

16 From the customer s point of view, an understanding of this cost chain can help significantly in determining the competitiveness of offer prices received. Many business energy customers find it useful to derive a cost expectation before they approach the competitive market, so they can set a realistic view of potential opportunities. The following paragraphs provide a more detailed overview of the different components of the energy supply chain Wholesale Energy The strength of a supplier s position in the competitive market for business customers is determined by its trading skill as much as its own business aspirations. Energy is traded by a multiplicity of means at the wholesale level. There are formal energy exchanges that have been established, typically, for shorter-term trades. Participants can also contract direct with producers and sometimes choose to do so for larger volume, longer-term requirements. Since the start of 2003, there have been rapid increases in wholesale electricity and gas prices, which have been passed through to final customers, as Figure 2:2 shows. The figure plots trends in the year-ahead baseload contract, which is a critical measure from a business customer s point of view, as it provides for the delivery of the same amount of energy every day of the year. The rises it shows marked the end of a two-year period where wholesale power prices had fallen to such an extent that customers were able to make substantial savings, even despite the introduction of the Climate Change Levy. Important factors that have been attributed by some analysts as being behind the surge in wholesale power prices include the steep rises in traded gas and coal prices. Increases in the wholesale gas price, also shown at Figure 2:2, have been attributed to factors including the resurgent world oil market. The link between gas and electricity prices is recognised because of the importance of gas in the British power generation mix 11. Oil is an important driver of gas prices because it determines gas contract prices in continental Europe. The interconnector pipeline from Bacton in Norfolk to Zeebrugge in Belgium has, since 1998, provided the opportunity for British gas to be traded in other European markets, and the corresponding possibility for gas to be imported. 11 According to DTI figures, in 2003, 21 GW (35%) of the 60.3 GW of generating capacity installed in England and Wales was combined cycle gas turbine. Cornwall Consulting Report for Energywatch 16

17 Figure 2:2: Trends in Year Ahead Wholesale Gas and Power Prices 2002 to 2004 Elec (p/kwh) Gas (p/kwh) Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Electricity Gas Source: Data from Platts, conversions to p/kwh by Cornwall Consulting Aside from trends in related fuel markets, gas and electricity wholesale markets can be influenced by: short-term difficulties at production facilities (e.g. power stations or offshore gas fields); technical difficulties, constraining bulk energy flows (e.g. an outage in interconnection facilities restricting cross-border trade); weather, triggering unexpected demand conditions either in Britain or elsewhere through interconnections with north-west Europe; perceptions of the longer-term demand and supply balances; actions by producers to invest in, or close, capacity; the actions of traders, funds and other market participants; and changes in government or regulatory policy Delivery It has already been noted that competition is established in supplying customers and also in wholesale energy production. The delivery of energy to Cornwall Consulting Report for Energywatch 17

18 the meter is, however, not competitive, as it is felt that this would mean the duplication of wires and pipeline assets which would be both economically and environmentally undesirable. Therefore, a number of companies operate monopoly services moving energy around the country. In England and Wales they include National Grid Transco (NGT), which operates the high voltage electricity transmission system akin to the motorway network and the national gas grid. When the British Electricity Transmission and Trading Arrangements are implemented from April 2005, NGT will become the operator, but not the owner, of the transmission network in Scotland. Additionally, there are 12 regional electricity distribution networks in England and Wales and a further two north of the border operated by various different companies. North of the border, the distribution and transmission networks are owned by two regional companies. NGT owns and operates the British gas network. There are presently plans under consideration to allow restructuring and sale of four of the local gas distribution networks 12 owned by NGT. Network use in the UK is provided on an open access basis. The network owners cannot deny any reasonable request for access and must comply on fair and transparent terms. The charges the companies levy are published and consistent for all suppliers. They are designed to reflect the costs they incur in shipping the energy for each customer through their networks. They are set according to published tariffs which are regulated by the Office of Gas and Electricity Markets (Ofgem), the industry regulator Taxes and Levies Electricity and gas consumption by business users attracts various taxes and levies including value added tax (VAT), the Climate Change Levy and the costs of the Renewables Obligation. Typically, they will be separately itemised on the bill, and further information is provided on them in Sections and At the end of August 2004, NGT National Grid Transco announced the sale, subject to final regulatory approval, of four of its regional gas distribution networks for a total cash consideration of 5.8 billion. The four networks are: the North of England distribution network, to be purchased for 1.4 billion by a consortium headed by Cheung Kong Infrastructure Holdings, and including United Utilities; the South of England and Scottish distribution networks, to be purchased for 3.2 billion by a consortium 50% of which is owned by Scottish and Southern Energy; and the Wales and West distribution network, to be purchased for 1.2 billion by a consortium led by Australia's Macquarrie Bank. Cornwall Consulting Report for Energywatch 18

19 2.3. Competitive Business Electricity and Gas Markets Business electricity and gas markets were the first to see supply competition. Despite the extension of choice to householders, they remain a very important sector of the market. As Table 2:2 shows, two in every three kilowatt hours (kwh) of electricity consumed in the United Kingdom are used by a business customer 13. In gas excluding power station use this ratio is a still significant four in ten. Table 2:2: Business Energy Consumption, 2003 and 1990 (Million Tonnes of Oil Equivalent) Change (%) Business as % Total (2003) Electricity Gas Oil Coal Other sources Total Source: heat supplied basis data from DTI Digest of UK Energy Statistics. Calculations by Cornwall Consulting. Other sources include coke and breeze, other solid fuels, oven gas, heat sold and renewables. Both gas and electricity demand from business users have increased since The majority of this increase has arisen in the commercial and public sectors and, for electricity in particular, whilst demand from heavy industry has declined, reflecting long-term economic structural change Electricity Market Size There are around 2.2 million business electricity customers in Great Britain, ranging in scale from small businesses spending hundreds of pounds a year, to major industrial and retail accounts whose account values range in the tens of millions of pounds. Their needs are met by a supply side which has seen very 13 in this analysis business energy requirements are defined as all final use of electricity and gas for energy purposes (i.e. non-feedstock) which is not attributable to the domestic sector. Cornwall Consulting Report for Energywatch 19

20 significant consolidation, particularly around the time of the change in wholesale trading arrangements (from the Pool to the New Electricity Trading Arrangements or NETA ) in April This supply consolidation has been paralleled by vertical integration with generation, a sector itself now subject to horizontal consolidation, as independent operators withdraw from the market. These developments have also been occurring across Europe s energy markets. Table 2:3 provides estimates of the scale of the business electricity market in Great Britain. Table 2:3: Business Electricity Consumption in Great Britain Number of Meters Consumption (TWh) Spend ( bn) All 2,200, Of which half hourly metered c 100, Non half hourly metered 2,100, Source: Cornwall Consulting estimates based on DTI and Electricity Association data. By volume, DTI figures attribute 50% of the business market to the industrial sector, 35% to the commercial sector, and 9% to the public sector, with the balance from transport, agriculture and other uses. Half hourly metering was a requirement for larger users to switch in the first two phases of market opening, and remains obligatory for over 100kW users. It is also an option for smaller users whose requirements have been pursued in cases where the customer believes the extra cost will be paid back by enabling it to access a more competitive supply arrangement. The electricity to meet customer requirements is mainly produced from 68.4GW of generating capacity located in Great Britain. As Table 2:4 shows, the dominant capacities installed are fired by coal, gas or nuclear energy. Two interconnectors, of 2 GW capacity, link Scotland with England and Wales, and France with England and Wales. Both typically have acted to provide power into England and Wales. Cornwall Consulting Report for Energywatch 20

Competition in British household energy supply markets

Competition in British household energy supply markets Date: October 2014 Competition in British household energy supply markets An independent assessment Prepared by: Robert Buckley, Anna Moss Cornwall Energy About Cornwall Energy Cornwall Energy s team of

More information

Competition in British business energy supply markets An independent assessment for

Competition in British business energy supply markets An independent assessment for Date: April 2014 Competition in British business energy supply markets An independent assessment for Prepared by: Anna Moss, Robert Buckley Cornwall Energy About Cornwall Energy Cornwall Energy s team

More information

Competition in British business energy supply markets An independent assessment for

Competition in British business energy supply markets An independent assessment for Date: August 2015 Competition in British business energy supply markets An independent assessment for Prepared by: Anna Moss, Robert Buckley Cornwall Energy About Cornwall Energy Cornwall Energy s team

More information

August 2000. A Review of the Development of Competition in the Industrial and Commercial Gas Supply Market

August 2000. A Review of the Development of Competition in the Industrial and Commercial Gas Supply Market August 2000 A Review of the Development of Competition in the Industrial and Commercial Gas Supply Market Executive summary This document explains the conclusions of Ofgem s 1999 review of the development

More information

Business and broker interaction in the energy market

Business and broker interaction in the energy market Date: August 2013 Business and broker interaction in the energy market A review by Cornwall Energy Prepared by: Robert Buckley, Anna Moss, and Daniel Starman About Cornwall Energy Cornwall Energy s team

More information

E.ON s UK Consolidated Segmental Report for the year ended 31 December 2012

E.ON s UK Consolidated Segmental Report for the year ended 31 December 2012 E.ON s UK Consolidated Segmental Report for the year ended 31 December 2012 Introduction In accordance with the Electricity Generation Licence Condition 16 - Financial Information Reporting, and the Electricity

More information

EDF ENERGY S CONSOLIDATED SEGMENTAL STATEMENT YEAR ENDED 31 DECEMBER 2013

EDF ENERGY S CONSOLIDATED SEGMENTAL STATEMENT YEAR ENDED 31 DECEMBER 2013 This Consolidated Segmental Statement ( CSS ) satisfies Standard Licence Condition 19A of the Gas and Electricity Supply Licences and Standard Licence Condition 16B of the Electricity Generation Licence.

More information

Note No. 138 March 1998. Natural Gas Markets in the U.K.

Note No. 138 March 1998. Natural Gas Markets in the U.K. Privatesector P U B L I C P O L I C Y F O R T H E Note No. 138 March 1998 Competition, industry structure, and market power of the incumbent Andrej Juris The deregulation of the U.K. natural gas industry

More information

NERA Analysis of Energy Supplier Margins

NERA Analysis of Energy Supplier Margins 7 December 2009 NERA Analysis of Energy Supplier Margins By Graham Shuttleworth Even though wholesale energy prices have fallen recently, gas and electricity suppliers are earning very little margin on

More information

RWE npower Consolidated Segmental Statement for the year ended 31 December 2012. RWE npower Page 1 of 13

RWE npower Consolidated Segmental Statement for the year ended 31 December 2012. RWE npower Page 1 of 13 year ended 31 December 2012 RWE npower Page 1 of 13 1. Background to the Consolidated Segmental Statement ( CSS ) On 21 October 2009 the Office of Gas and Electricity Markets (Ofgem) introduced two licence

More information

20th February 2015 ScottishPower Standard Domestic Tariff. Prices. Your domestic gas and electricity pricing information

20th February 2015 ScottishPower Standard Domestic Tariff. Prices. Your domestic gas and electricity pricing information 20th February 2015 ScottishPower Standard Domestic Tariff Prices Your domestic gas and electricity pricing information How to find your electricity supply area See what supply area you are in by using

More information

You may reuse this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence.

You may reuse this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. Crown copyright 2015 You may reuse this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-governmentlicence/

More information

REVIEW OF DOMESTIC AND SMALL BUSINESS ELECTRICITY SUPPLY PRICE REGULATION

REVIEW OF DOMESTIC AND SMALL BUSINESS ELECTRICITY SUPPLY PRICE REGULATION June 1999 REVIEW OF DOMESTIC AND SMALL BUSINESS ELECTRICITY SUPPLY PRICE REGULATION A Consultation Document Contents Page 1. Introduction 2 Part I - Background 2. Context of the review 4 3. The regulatory

More information

Under the microscope. Reviewing the micro-business energy market

Under the microscope. Reviewing the micro-business energy market Under the microscope Reviewing the micro-business energy market About Consumer Focus Consumer Focus is the statutory consumer champion for England, Wales, Scotland and (for postal consumers) Northern Ireland.

More information

Ofgem s approach to smart metering

Ofgem s approach to smart metering Ofgem s approach to smart metering Philip Davies Director of Retail Markets and Environmental Policy Cambridge Conference Pg 1 Agenda Why smart metering? Experience to date with competition The smart meter

More information

Introduction to the UK Electricity Industry

Introduction to the UK Electricity Industry Introduction to the UK Electricity Industry The structure of the electricity industry The UK electricity industry is at the forefront of energy liberalisation in Europe. The liberalisation process, which

More information

Independent Auditors Report to the Directors of EDF Energy Holdings Limited and its Licensees

Independent Auditors Report to the Directors of EDF Energy Holdings Limited and its Licensees Independent Auditors Report to the Directors of EDF Energy Holdings Limited and its Licensees We have audited the accompanying statement (the Consolidated Segmental Statement or CSS ) of EDF Energy Holdings

More information

ScottishPower Segmental Generation and Supply Statements for the year ended 31 December 2011

ScottishPower Segmental Generation and Supply Statements for the year ended 31 December 2011 ScottishPower Segmental Generation and Supply Statements Required under Standard Condition 16B of Electricity Generation Licences and Standard Condition 19A of Electricity and Gas Supply Licences Contents

More information

Online Fixed Energy A Guaranteed Deal

Online Fixed Energy A Guaranteed Deal Online Fixed Energy A Guaranteed Deal Online Fixed Price Energy July 2015 Offer Prices effective from 8th April 2014 Limited Offer subject to availability and may be withdrawn from sale at any time. Online

More information

Quarterly Wholesale/Retail Price Report

Quarterly Wholesale/Retail Price Report Quarterly Wholesale/Retail Price Report February 29 Contents Overview 3 Summary of analysis 1. Customer bills, wholesale costs and margins 5 Electricity Gas 2. Scenario analysis: Impact of retail price

More information

4. Comparison with DECC (2014) Estimated impacts of energy and climate change policies on energy prices and bills

4. Comparison with DECC (2014) Estimated impacts of energy and climate change policies on energy prices and bills Energy prices and bills - supplementary tables Contents: 1. Energy prices and bills 2. Assumptions 3. Scenarios to 2030 4. Comparison with DECC (2014) Estimated impacts of energy and climate change policies

More information

Online Fixed Energy A Guaranteed Deal

Online Fixed Energy A Guaranteed Deal Online Fixed Energy A Guaranteed Deal Online Fixed Price Energy August 2014 Offer Prices effective from 20th March 2013 Limited Offer subject to availability and may be withdrawn from sale at any time.

More information

Finance and Policy Committee. Date: 14 October 2014. Item 17: TfL Energy Purchasing 2017 to 2020. This paper will be considered in public.

Finance and Policy Committee. Date: 14 October 2014. Item 17: TfL Energy Purchasing 2017 to 2020. This paper will be considered in public. Finance and Policy Committee Date: 14 October 2014 Item 17: TfL Energy Purchasing 2017 to 2020 This paper will be considered in public 1 Summary 1.1 This paper: (a) reviews the current purchasing strategy

More information

REGULATION, COMPETITION AND PRICE FORMATION IN THE UK GAS INDUSTRY

REGULATION, COMPETITION AND PRICE FORMATION IN THE UK GAS INDUSTRY REGULATION, COMPETITION AND PRICE FORMATION IN THE UK GAS INDUSTRY Authors: Dr Ian Rutledge Honorary Lecturer, University of Sheffield Dr Philip Wright Reader in Economics & Industrial Studies University

More information

Disclaimer: All costs contained within this report are indicative and based on latest market information. 16 th March 2015

Disclaimer: All costs contained within this report are indicative and based on latest market information. 16 th March 2015 Disclaimer: All costs contained within this report are indicative and based on latest market information 16 th March 2015 FD SUMMARY The make up of the electricity bill is changing, with non-commodity

More information

Domestic Energy Prices: Data sources and methodology

Domestic Energy Prices: Data sources and methodology Domestic Energy Prices: Data sources and methodology 1. Introduction 1.1 Background Domestic Energy Prices Statistics Domestic price statistics provide important information for monitoring the energy market.

More information

GB Electricity Market Summary

GB Electricity Market Summary GB Electricity Market Summary SECOND QUARTER 2014 APR TO JUN Recorded Levels of UK Generation by Fuel (based upon DECC Energy Trends & FUELHH data): GAS: 10.8GW WIND: 2.6GW AUGUST 2014 COAL: 10.1GW BIOMASS:

More information

Liberalisation, privatisation and regulation in the UK electricity sector

Liberalisation, privatisation and regulation in the UK electricity sector PRIVATISATION OF PUBLIC SERVICES AND THE IMPACT ON QUALITY, EMPLOYMENT AND PRODUCTIVITY (PIQUE) Liberalisation, privatisation and regulation in the UK electricity sector Richard Pond, Working Lives Research

More information

Fixed + Reflective Electricity supply contracts explained for large business customers

Fixed + Reflective Electricity supply contracts explained for large business customers Fixed + Reflective Electricity supply contracts explained for large business customers 2/7 Fixed + Reflective explained We fix your electricity price, with a small tolerance on how much your electricity

More information

VPRI-071024-AlLeon-P0. Enrico Lanzavecchia Alessandro Leona Value Partners. Milan Energy Forum, 24 October 2007

VPRI-071024-AlLeon-P0. Enrico Lanzavecchia Alessandro Leona Value Partners. Milan Energy Forum, 24 October 2007 VPRI071024AlLeonP0 Enrico Lanzavecchia Alessandro Leona Value Partners Milan Energy Forum, 24 October 2007 VPRI071024AlLeonP1 UK experience The liberalization in Italy 1 VPRI071024AlLeonP2 The gas and

More information

A Gazprom A Energy Gazprom whitepaper Energy Guide. Energy. What are you paying for?

A Gazprom A Energy Gazprom whitepaper Energy Guide. Energy. What are you paying for? A Gazprom A Energy Gazprom whitepaper Energy Guide Energy What are you paying for? 2 Introduction According to government statistics, the cost of buying electricity to businesses in the UK has increased

More information

Shaping Our Energy Future: The Cost of Energy

Shaping Our Energy Future: The Cost of Energy 1. Introduction The total average UK household energy bill in 2011 has been assessed as between 1,249 and 1,300 [1] [2] [3]. The wholesale cost of gas and electricity is estimated to account for around

More information

The United Kingdom. Key issues. 1. General overview

The United Kingdom. Key issues. 1. General overview The United Kingdom Key issues Further investment in the UK electricity network infrastructure and generation is needed for delivery of 2020 targets. In particular, greater interconnection is needed. Successive

More information

E.ON s UK Consolidated Segmental Report for the year ended 31 December 2014 Amended copy published 11th May 2015

E.ON s UK Consolidated Segmental Report for the year ended 31 December 2014 Amended copy published 11th May 2015 E.ON s UK Consolidated Segmental Report for the year ended 31 December 2014 Amended copy published 11th May 2015 This amended copy has been filed to correct four Volume and WACO G statistics quoted in

More information

UK Electricity What happens next?

UK Electricity What happens next? UK Electricity What happens next? Robert Groves, CEO SmartestEnergy The Balance of the Energy Challenge Institute of Water Event Worthing, 14 th April 2016 Agenda Introduction to SmartestEnergy; The state

More information

Fixed + Peace of Mind Electricity supply contracts explained for large business customers

Fixed + Peace of Mind Electricity supply contracts explained for large business customers Fixed + Peace of Mind Electricity supply contracts explained for large business customers 2/7 Fixed + Peace of Mind explained This contract guarantees your unit price will stay fixed in all but exceptional

More information

How Do Energy Suppliers Make Money? Copyright 2015. Solomon Energy. All Rights Reserved.

How Do Energy Suppliers Make Money? Copyright 2015. Solomon Energy. All Rights Reserved. Bills for electricity and natural gas can be a very high proportion of a company and household budget. Accordingly, the way in which commodity prices are set is of material importance to most consumers.

More information

REGULATION OF THE UK ELECTRICITY INDUSTRY

REGULATION OF THE UK ELECTRICITY INDUSTRY INDUSTRY BRIEF REGULATION OF THE UK ELECTRICITY INDUSTRY 2002 edition Gillian Simmonds REGULATION OF THE UK ELECTRICITY INDUSTRY 2002 edition CRI Industry Brief Gillian Simmonds Desktop published by Jan

More information

Energy Trading. Jonas Abrahamsson Senior Vice President Trading. E.ON Capital Market Day Nordic Stockholm, July 3, 2006

Energy Trading. Jonas Abrahamsson Senior Vice President Trading. E.ON Capital Market Day Nordic Stockholm, July 3, 2006 Energy Trading Jonas Abrahamsson Senior Vice President Trading E.ON Capital Market Day Nordic Stockholm, July 3, 2006 Agenda The Nordic Power Market The Role of Energy Trading within E.ON Nordic Page 2

More information

Annex E Major events in the Energy Industry since 1990

Annex E Major events in the Energy Industry since 1990 Annex E Major events in the Energy Industry since 1990 1990 Electricity The new electricity licensing regime for electricity companies was established along with the post of Director General of Electricity

More information

Jersey Energy Trends 2005

Jersey Energy Trends 2005 Jersey Energy Trends 25 Headlines In 25 total final energy demand in Jersey was 187 million toe (2,17, 9 MWh) an increase of.1% on 24. Final consumption of electricity grew by 1.2% between 24 and 25. Over

More information

NEPO Energy Procurement Guide for Academies

NEPO Energy Procurement Guide for Academies NEPO Energy Procurement Guide for Academies NEPO Energy Procurement The North East Procurement Organisation (NEPO) has been responsible for energy procurement for member organisations since the phased

More information

International comparison of electricity and gas prices for commerce and industry

International comparison of electricity and gas prices for commerce and industry International comparison of electricity and gas prices for commerce and industry FINAL REPORT ON A STUDY PREPARED FOR CREG October 2011 Frontier Economics Ltd, London. October 2011 Frontier Economics

More information

Generating a Return. July 2008 BHA SEMINAR

Generating a Return. July 2008 BHA SEMINAR Generating a Return July 2008 BHA SEMINAR Why invest in renewable generation? Reduces CO 2 emissions and climate change Reduces cost of electricity at the site as not paying for transmission of electricity

More information

The Social Effects of Energy Liberalisation

The Social Effects of Energy Liberalisation The Social Effects of Energy Liberalisation The UK Experience Launching a Common European Energy Market Lisbon 5/6 June 2000 Social Effects of Energy Liberalisation The UK Experience Summary A high degree

More information

Domestic Customer Tariff Breakdown - RoI Note this is approximate due to tariff and consumption variations

Domestic Customer Tariff Breakdown - RoI Note this is approximate due to tariff and consumption variations Guide to Electricity price formation in Ireland and Northern Ireland The numbers The average household consumes 4,300 kwh 1 of electricity per annum in Ireland and 4,100 in Northern Ireland. At an average

More information

Online Fixed Energy A Guaranteed Deal

Online Fixed Energy A Guaranteed Deal Online Fixed Energy A Guaranteed Deal Online Fixed Price Energy September 2016 Prices effective from 27th August 2015 Subject to availability and may be withdrawn from sale at any time. Online Fixed Price

More information

A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM)

A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM) A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM) Non-technical summary High level design Draft Decision Paper SEM -14-047 June 2014 1 INTRODUCTION

More information

Case No COMP/M.7228 - CENTRICA/ BORD GAIS ENERGY

Case No COMP/M.7228 - CENTRICA/ BORD GAIS ENERGY EN Case No COMP/M.7228 - CENTRICA/ BORD GAIS ENERGY Only the English text is available and authentic. REGULATION (EC) No 139/2004 MERGER PROCEDURE Article 6(1)(b) NON-OPPOSITION Date: 13/06/2014 In electronic

More information

Investing in renewable technologies CfD contract terms and strike prices

Investing in renewable technologies CfD contract terms and strike prices Investing in renewable technologies CfD contract terms and strike prices December 2013 Crown copyright 2013 You may re-use this information (not including logos) free of charge in any format or medium,

More information

THE CHANGING COST OF UK ENERGY THE CHANGING COST

THE CHANGING COST OF UK ENERGY THE CHANGING COST THE CHANGING COST OF UK ENERGY THE CHANGING COST OF UK ENERGY 0b THE CHANGING COST OF UK ENERGY 0c RWE NPOWER ENERGY EXPLAINED CONTENTS 01 Introduction 02 CEO foreword 04 Energy bill for an average UK

More information

ESRI Research Note. The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch

ESRI Research Note. The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch ESRI Research Note The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch Research Notes are short papers on focused research issues. They are subject

More information

RWE npower Simon Stacey Retail Finance Director

RWE npower Simon Stacey Retail Finance Director RWE npower Simon Stacey Retail Finance Director THE FINANCIAL CHALLENGES FACING THE ENERGY INDUSTRY RWE npower PAGE 1 THE FINANCIAL CHALLENGES FACING THE ENERGY INDUSTRY Contents RWEnpower Background Information

More information

Ofgem Corporate Strategy 2003-2006

Ofgem Corporate Strategy 2003-2006 March 2003 Ofgem Corporate Strategy 2003-2006 Promoting choice and value for all gas and electricity customers Foreword Everything Ofgem does is designed to protect and advance the interests of consumers,

More information

Section 5 Electricity

Section 5 Electricity Section 5 Electricity Key results show: In 2015 Q3, total electricity generated fell by 0.5 per cent, from 76.4 TWh a year earlier to 75.9 TWh. (Chart 5.1). Renewables share of electricity generation was

More information

Scottish and Southern Energy plc s proposed acquisition of Midlands Electricity plc A consultation paper

Scottish and Southern Energy plc s proposed acquisition of Midlands Electricity plc A consultation paper Scottish and Southern Energy plc s proposed acquisition of Midlands Electricity plc A consultation paper June 2003 Table of contents 1. Introduction...1 2. Details of the proposed acquisition...2 3. Merger

More information

Conclusion of the Utility Regulator s Review of the firmus energy (Supply) Ltd Maximum Average Price in the Ten Towns area

Conclusion of the Utility Regulator s Review of the firmus energy (Supply) Ltd Maximum Average Price in the Ten Towns area Conclusion of the Utility Regulator s Review of the firmus energy (Supply) Ltd Maximum Average Price in the Ten Towns area 5 March 2015 About the Utility Regulator The Utility Regulator is the independent

More information

EAST AYRSHIRE COUNCIL CABINET 21 OCTOBER 2009 TREASURY MANAGEMENT ANNUAL REPORT FOR 2008/2009 AND UPDATE ON 2009/10 STRATEGY

EAST AYRSHIRE COUNCIL CABINET 21 OCTOBER 2009 TREASURY MANAGEMENT ANNUAL REPORT FOR 2008/2009 AND UPDATE ON 2009/10 STRATEGY EAST AYRSHIRE COUNCIL CABINET 21 OCTOBER 2009 TREASURY MANAGEMENT ANNUAL REPORT FOR 2008/2009 AND UPDATE ON 2009/10 STRATEGY Report by Executive Head of Finance and Asset Management 1 PURPOSE OF REPORT

More information

THE TRADABLE VALUE OF DISTRIBUTED GENERATION

THE TRADABLE VALUE OF DISTRIBUTED GENERATION THE TRADABLE VALUE OF DISTRIBUTED GENERATION CONTRACT NUMBER: DG/DTI/00047 URN NUMBER: 05/1228 1 The DTI drives our ambition of prosperity for all by working to create the best environment for business

More information

Offtake arrangements and market access for small-scale distributed energy generators. A Report for Ofgem. June 2008

Offtake arrangements and market access for small-scale distributed energy generators. A Report for Ofgem. June 2008 Offtake arrangements and market access for small-scale distributed energy generators A Report for Ofgem by Nigel Cornwall 1 and Stephen Littlechild 2 June 2008 1 Cornwall Energy 2 Emeritus Professor, University

More information

ICIS Power Index Q1 2015 Global gas oversupply pushes down prices

ICIS Power Index Q1 2015 Global gas oversupply pushes down prices Highlights l UK wholesale electricity market prices hit their lowest levels since the IPI has been calculated, because of global gas oversupply. l UK markets are now much more influenced by global gas

More information

Fixed + Protect Electricity supply contracts explained for large business customers

Fixed + Protect Electricity supply contracts explained for large business customers Fixed + Protect Electricity supply contracts explained for large business customers 2/7 Fixed + Protect explained We fix your unit price, with a generous tolerance on how much your electricity use can

More information

Energy White Paper at a glance

Energy White Paper at a glance and Science Energy White Paper at a glance WWW. i Energy White Paper at a glance The Australian Government made an election commitment to deliver an Energy White Paper to give industry and consumers certainty

More information

Downstream Gas Statistics data sources and methodologies

Downstream Gas Statistics data sources and methodologies Downstream Gas Statistics data sources and methodologies 1. Introduction The UK s gas markets can be separated into two sections: upstream (gas supply) and downstream (gas demand). The Department of Energy

More information

Online Fixed Energy A Guaranteed Deal

Online Fixed Energy A Guaranteed Deal Online Fixed Energy A Guaranteed Deal Online Fixed Price Energy March 2015 Offer WithFreedom Prices effective from 14th October 2013 Limited Offer subject to availability and may be withdrawn from sale

More information

DISCLOSURE NOTES. How the accounts are presented. Generation

DISCLOSURE NOTES. How the accounts are presented. Generation DISCLOSURE NOTES As a result of changes in SSE s management and reporting structure in 2011/12 and in the interests of improved transparency, SSE s financial statements for the year ending March 2012 were

More information

Industry Example: The European Market for Electricity

Industry Example: The European Market for Electricity Industry Example: The European Market for Electricity Professur für BWL, insb. Internationale Wirtschaft Folie 1 Agenda 1. Some theory 2. The National Markets for Electricity 3. EU Liberalization Policy

More information

GDF SUEZ. Introduction. Jean-François Cirelli

GDF SUEZ. Introduction. Jean-François Cirelli GDF SUEZ Introduction Jean-François Cirelli Content 1. Focus on gas market dynamics 2. Focus on electricity market dynamics 3. Focus on P&L resilience and sensitivities 4. Focus on synergies and performance

More information

Fixed Price Energy A Guaranteed Deal

Fixed Price Energy A Guaranteed Deal Fixed Price Energy A Guaranteed Deal EnergySure COLLECTIVE MARK Fixed Price Energy January 2015 Prices effective from 7th June 2011 No price rises until January 2015 with our Fixed Price Energy January

More information

Chapter 5 Electricity

Chapter 5 Electricity ELECTRICITY Key points Chapter 5 Electricity UK electricity generation (including pumped storage) in the UK fell by 3.7 per cent, from 382 TWh in 2010 to 368 TWh in 2011. Total electricity supply (including

More information

Business bills for both electricity and gas are made up of two main parts - Non - Energy Costs

Business bills for both electricity and gas are made up of two main parts - Non - Energy Costs Business bills for both electricity and gas are made up of two main parts - Non - Energy Costs Non-energy costs pay for running the UK s gas and electricity networks and comprise a variety of obligations,

More information

Wind and solar reducing consumer bills An investigation into the Merit Order Effect

Wind and solar reducing consumer bills An investigation into the Merit Order Effect Switch for Good Wind and solar reducing consumer bills An investigation into the Merit Order Effect Executive summary Concerns over the cost of renewable subsidy schemes have led to significant policy

More information

Gas terminology for business. Gas Terminology. Simplifying energy management. www.businesscostconsultants.co.uk

Gas terminology for business. Gas Terminology. Simplifying energy management. www.businesscostconsultants.co.uk Gas Terminology Simplifying energy management AMR Automated Meter Reading - automatic collection of data from meters which is transferred to a central database for billing and/or analysis. AQ Annual quantity.

More information

Preparing for Changes in Market Design

Preparing for Changes in Market Design Preparing for Changes in Market Design EMART Conference Didier Lebout, Strategy and Development Director Gazprom Marketing and Trading France Amsterdam, 21 November 2012 In this presentation GM&T Ltd:

More information

Energy Supply Probe - Initial Findings Report

Energy Supply Probe - Initial Findings Report Energy Supply Probe - Initial Findings Report Document type: Consultation Ref: 140/08 Date of publication: 6 October 2008 Deadline for response: 1 December 2008 Target audience: Energy suppliers and generators,

More information

ICIS Power Index Q2 2015 UK energy prices hit five-year lows

ICIS Power Index Q2 2015 UK energy prices hit five-year lows Highlights l Wholesale UK gas and electricity market prices are at their lowest quarterly average in five years, according to the ICIS Power Index and the ICIS price for gas to be delivered over the next

More information

Cabinet Member for Business, Skills and Housing. Title: Purchase of Communal Electricity and Gas 2014/15

Cabinet Member for Business, Skills and Housing. Title: Purchase of Communal Electricity and Gas 2014/15 Decision Maker: Cabinet Member for Business, Skills and Housing Date: 13 January 2014 Classification: General Release Title: Purchase of Communal Electricity and Gas 2014/15 Wards Affected: Better City,

More information

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere 2. Executive Summary With the introduction of CO 2 emission constraints on power generators in the European Union, climate policy is starting to have notable effects on energy markets. This paper sheds

More information

Electricity Balancing Services

Electricity Balancing Services Briefing for the House of Commons Energy and Climate Change Select Committee Electricity Balancing Services MAY 2014 Our vision is to help the nation spend wisely. Our public audit perspective helps Parliament

More information

Poland must fully transpose the Third Energy Package Directives without further delay to liberalise the electricity and gas markets.

Poland must fully transpose the Third Energy Package Directives without further delay to liberalise the electricity and gas markets. Poland Key Issues + With regard to electricity, coal is still the main source of fuel for power generation. Poland's generating capacity is ageing, and the country needs better incentives for investment

More information

RE: Non-traditional business models: Supporting transformative change in the energy market

RE: Non-traditional business models: Supporting transformative change in the energy market Dr Jeffrey Hardy Ofgem/Ofgem E-Serve 9 Millbank London SW1P 3GE Natalie Smith npower Regulation Natalie.smith5@npower.com 20 th May 2015 RE: Non-traditional business models: Supporting transformative change

More information

Work package 3 Comparison of member state approaches

Work package 3 Comparison of member state approaches Work package 3 Comparison of member state approaches Country overview: United Kingdom Report produced within the CODE project www.code-project.eu January 2011 The sole responsibility for the content of

More information

Security of electricity supply

Security of electricity supply Security of electricity supply Definitions, roles & responsibilities and experiences within the EU Thomas Barth Chairman of Energy Policy & Generation Committee EURELECTRIC Outline Security of Supply a

More information

Energy Supply Margins: Commentary on Ofgem s SMI Prepared for Energy UK

Energy Supply Margins: Commentary on Ofgem s SMI Prepared for Energy UK Energy Supply Margins: Commentary on Ofgem s SMI Prepared for Energy UK 29 January 2015 Project Team George Anstey Matthew Mair Soren Christian NERA Economic Consulting Marble Arch House, 66 Seymour Street

More information

The Future of Renewables. Stuart Pocock Chief Operating Officer

The Future of Renewables. Stuart Pocock Chief Operating Officer The Future of Renewables Stuart Pocock Chief Operating Officer Who we are The REA was established in 2001 as a not-for-profit trade association, representing British renewable energy producers and promoting

More information

Date: 26/01/2004. MEETING NAME Executive Delegation of award of energy supply contracts

Date: 26/01/2004. MEETING NAME Executive Delegation of award of energy supply contracts Item No. Classification: Open Report title: Ward(s) or groups affected: From: Date: 26/01/2004 MEETING NAME Executive Delegation of award of energy supply contracts ALL Assistant Chief Executive Strategy

More information

Fixed + Protect Electricity supply contracts explained for large business customers

Fixed + Protect Electricity supply contracts explained for large business customers Fixed + Protect Electricity supply contracts explained for large business customers 2/7 Fixed + Protect explained We fix your unit price, with a generous tolerance on how much your electricity use can

More information

NATURAL GAS DEMAND AND SUPPLY Long Term Outlook to 2030

NATURAL GAS DEMAND AND SUPPLY Long Term Outlook to 2030 1. Background On different occasions, Eurogas is asked to present its views on the future of the European gas industry. The forecasts are mainly needed for conferences and bilateral discussions with European

More information

Energy Market Investigation Statement of Issue

Energy Market Investigation Statement of Issue Which?, 2 Marylebone Road, London, NW1 4DF Date: 14th August To: Project Manager Energy Investigation Team, CMA Response by: Fiona Cochrane Project Manager Energy Market Investigation Competition and Markets

More information

The participation of non-generation activities in the GB Capacity Market. Department for Energy & Climate Change

The participation of non-generation activities in the GB Capacity Market. Department for Energy & Climate Change The participation of non-generation activities in the GB Capacity Market Department for Energy & Climate Change 22 January 2015 Presentation today 1 Environmental & Energy Aid Guidelines and nongeneration

More information

Business and Enterprise Select Committee inquiry into the UK s energy market 2008 Centrica Response

Business and Enterprise Select Committee inquiry into the UK s energy market 2008 Centrica Response Business and Enterprise Select Committee inquiry into the UK s energy market 2008 Centrica Response Introduction Centrica plc (Centrica) was formed in February 1997 when the former British Gas plc was

More information

The British retail energy market: politicians and reregulation?

The British retail energy market: politicians and reregulation? The British retail energy market: politicians and reregulation? Professor Michael Harker ESRC Centre for Competition Policy and UEA Law School University of East Anglia m.harker@uea.ac.uk Privatisation,

More information

Electricity network services. Long-term trends in prices and costs

Electricity network services. Long-term trends in prices and costs Electricity network services Long-term trends in prices and costs Contents Executive summary 3 Background 4 Trends in network prices and service 6 Trends in underlying network costs 11 Executive summary

More information

Online Fixed Energy A Guaranteed Deal

Online Fixed Energy A Guaranteed Deal Online Fixed Energy A Guaranteed Deal Online Fixed Price Energy February 2015 Offer WithFreedom Prices effective from 24th October 2013 Limited Offer subject to availability and may be withdrawn from sale

More information

Higher prices, worse service and less choice: Why Consumers on Independent Gas Transporter (IGT) Networks are Losing Out!

Higher prices, worse service and less choice: Why Consumers on Independent Gas Transporter (IGT) Networks are Losing Out! Higher prices, worse service and less choice: Why Consumers on Independent Gas Transporter (IGT) Networks are Losing Out! energywatch June 2006 Higher Prices, Worse Service and Less Choice: Why Consumers

More information

Western Australia and the Northern Territory are not connected to the NEM, primarily due to the distance between networks.

Western Australia and the Northern Territory are not connected to the NEM, primarily due to the distance between networks. Australia has one of the world s longest alternating current (AC) systems, stretching from Port Douglas in Queensland to Port Lincoln in South Australia and across the Bass Strait to Tasmania a distance

More information

The Domestic Energy Market. Key Questions Answered

The Domestic Energy Market. Key Questions Answered The Domestic Energy Market Key Questions Answered Foreword 1. Energy market overview 2. Regulation 3. Billing and payment methods 4. Customer representation 5. Disconnection 6. Help for those in need 7.

More information

Corporate Procurement of the Council s Electricity and Gas Supplies

Corporate Procurement of the Council s Electricity and Gas Supplies POLICY & RESOURCES COMMITTEE Agenda Item 146 Brighton & Hove City Council Subject: Date of Meeting: 12 February 2015 Report of: Corporate Procurement of the Council s Electricity and Gas Supplies Interim

More information

Summary of the Impact assessment for a 2030 climate and energy policy framework

Summary of the Impact assessment for a 2030 climate and energy policy framework Summary of the Impact assessment for a 2030 climate and energy policy framework Contents Overview a. Drivers of electricity prices b. Jobs and growth c. Trade d. Energy dependence A. Impact assessment

More information

Standard conditions of the Electricity Distribution Licence

Standard conditions of the Electricity Distribution Licence Gas and Electricity Markets Authority ELECTRICITY ACT 1989 Standard conditions of the Electricity Distribution Licence Standard conditions of the Electricity Distribution Licence 30 October 2015 SECTION

More information