Five things we learnt from Energy Spectrum | 657

An increasing number of interventions, including new mutualisation events, are likely to cause shocks in energy third party charges in the coming years. That is the conclusion of this week’s Energy Perspective, in which we explore the current level of these costs for policy and networks, focussing on changes for the 2019-20 financial year.

As part of the Offshore Wind Sector Deal, BEIS announced measures designed to deliver one-third of UK electricity being generated from wind by 2030. In this week’s Policy section, we look at the deal and see what impact it could have on the sector. While reaffirming the government’s previous commitments to the sector, there was little new here offered that would drive much-needed renewables investment.

BEIS and Ofgem launched their joint retail market review, looking at how to support effective competition once the price cap comes to an end. However, the mood from Ofgem and BEIS on the day of the launch event suggested that price caps will remain until at least 2023.

Trade associations have concerns about the impact Ofgem’s proposed Targeted Charging Review could have on flexibility and storage. In this week’s Regulation section, we agree that Ofgem needs to look much more closely at the distributional impacts of its proposals on different technologies and types of participant in the long term.

Digital banking innovations could open up a new space for energy intermediaries, with digital bank Monzo’s partnership with Octopus Energy the latest in a series of developments. In this week’s Industry section, we start with the Monzo-Octopus Energy partnership and go from there to see how bill management and automated switching have the potential to radically alter the relationship between customers, suppliers, and the energy market in general.

Related thinking

Regulation and policy

What’s going on with REGOs?

Renewable Energy Guarantees of Origin, more commonly referred to as REGOs, are certificates issued to accredited renewable generators for every MWh of electricity they produce over a year period. The initial intentions of these certificates were to provide suppliers a means to prove the level of renewable generation they received...

Home supply and services

Ofgem strives to improve consumer experiences across both the domestic and non-domestic sectors

Over the last week, a number of anticipated publications were issued by Ofgem that hold the potential to make a significant change to the requirements on both domestic and non-domestic suppliers. The findings of Ofgem’s non-domestic market review were revealed, alongside a policy consultation on the options available to address...

Energy storage and flexibility

Waiting to connect: the problems and solutions for network connection queues (Part 2)

Network connection queues continue to be a notable topic of interest as many generators face significant delays to project development – an issue that is directly conflicting with net zero ambitions and recent focuses on strengthening domestic energy supplies. In Part 1 of our two-part series on connection queues we...

Home supply and services

Addressing consumer harms in the non-domestic market

In recent months, Ofgem has shone a light on areas across both the domestic and non-domestic market where suppliers could improve their practices for customers and go beyond what they are obligated to do in the licence conditions. In a time of significant and extended volatility, the regulator has brought...

Energy storage and flexibility

Waiting to connect: the problems and solutions for network connection queues

The number of grid applications has risen significantly in recent years, resulting in increased pressure on the electricity networks to facilitate new connections. In its Energy Security Strategy, the UK government set out ambitions for 95% of electricity to be sourced from low carbon generation by 2030, and for the...

Net zero corporates and ESG

Long-term regulatory and policy changes needed to avoid stalls to business decarbonisation

In light of the financial pressures faced by businesses from rising inflation and interest rates, tight supply chains and labour markets, alongside high energy bills, there is a high chance corporate investment in decarbonisation could be in trouble. In Cornwall Insight's latest Insight paper “Business net zero: Making progress in...

Commercial and market outlook

Winter 2023-24 price cap forecasts fall further below 2022-23 EPG, but long-term prospects remain uncertain

The predictions for the Default Tariff Cap in this piece are out of date, please click here to find our latest forecasts and commentary on the cap. Our latest forecasts for the Default Tariff Cap (price cap) have shown energy bill predictions for a typical household1 have fallen to £3,208...

Energy Market Design

Are prices going to rise in Contracts for Difference Allocation Round 5?

A number of factors may be about to put an end to the trend for falling energy prices in the Contracts For Difference (CfD) scheme. The CfD scheme has provided strong subsidy support whilst also providing consumers robust levels of protection. High investor confidence and steady reductions in capital costs...