Five things we learnt from Energy Spectrum | 659

In this week’s Energy Perspective, we set out the main developments in the GB Capacity Market since the November 2018 ruling by the European Court of Justice that led to its suspension including, most recently, the European Commission’s confirmation it is to undertake a full investigation into the scheme.

The business case outlined by a new report on marine energy – funding innovation through corporate PPAs with offsetting tax credits for buyers and, as it becomes established, more standardised Contracts for Difference support – would be complex to administer and would require new transparency rules. In this week’s Policy section, we find some interesting ideas in the report, produced by the UK Marine Energy Council and Scottish Renewables, but there are clearly several hurdles to utilising the “world leading” UK wave and tidal power sectors it describes.

As the Balancing Services Use of System (BSUoS) Taskforce continues to investigate possible changes into balancing services charges we see little surprise in its conclusions that BSUoS is not a cost reflective charge. Not least because it’s an opinion consistent with previous industry workstreams that have considered the matter. This week, in our Regulation section, we analyse further the progress of the Taskforce.

Continuing our rundown of the annual results of the larger suppliers, this week’s Industry Structure section analyses E.ON’s numbers, published on 13 March. The business has been repositioning across Europe and looking to develop its more consumer-facing strategy and, in headline terms, it appears that networks and renewables are driving profit growth. However, we also find that, while E.ON’s retail businesses outside GB are also growing, the squeeze from increasing competition and the introduction of price caps look to be taking their toll in GB.

Cornwall Insight’s retail team reviews the way that white label energy suppliers have evolved in the market in this week’s Nutwood.  We are approaching 21 years since the official date originally slated for opening the domestic electricity market in GB (1 April) and the team finds that, while much has changed since, the white label model has remained relatively consistent.

Related thinking

Low carbon generation

Learning curves and the many moving parts of the CfD Auctions

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Energy storage and flexibility

Off-peak electricity use and home generation could cut billions off energy costs

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Energy Market Design

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

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Energy Market Design

Financing Net Zero: A (revenue) cap on UK merchant financing opportunities?

On 13 October 2022, we hosted the latest instalment of our ‘Financing Net Zero’ webinar series. The session, sponsored by Shoosmiths, focused on opportunities and challenges for merchant financed renewable projects amid the current wholesale price volatility.   In recent years, due to the increasing success-rate and profitability of renewable projects,...

Regulation and policy

Government to consult on the introduction of Cost-Plus-Revenue Limit

The government issued its Energy Prices Bill on 12 October. The bill will put in law a number of the already-announced mechanisms that will be used to support households and businesses this winter including the Energy Price Guarantee and the Energy Bill Relief Scheme. Also announced alongside this is the...

Energy Market Design

How does REMA impact energy generation, flexibility and consumers?

The Review of Electricity Market Arrangements (REMA) is the largest review programme of GB electricity market arrangements for a generation. It comes at a time when European energy markets are suffering extreme turmoil. Depending on the outcome there could be significant implications for generators, flexibility providers, and, indirectly, consumers. REMA...

Energy Market Design

REMA: electricity market design choices

Electricity markets will serve as the foundation for the future GB energy system.  This article examines some of the market design decisions that will be considered by the Review of Electricity Market Arrangements (REMA). Market design goals At its most simple, a well-functioning market will attract enough potential “buyers” and...