At the start of April, National Grid Electricity System Operator (ESO) became a separate legal entity within the National Grid group, separate from the transmission business and with its own licence. In this week’s Energy Perspective, we discuss the move, which marks a milestone in the development of the ESO. We consider how the new incentive arrangements and Ofgem’s proposed treatment of the ESO in the upcoming price control provide direction to future activities for the ESO.
At a Science and Technology Committee evidence session last week, Energy and Clean Growth Minister Claire Perry said she was confident that the UK can achieve its fourth and fifth carbon budgets. We discuss Perry’s comments – and the other events of the session – in this week’s Policy section, noting that government confidence may well face a test this week when the Committee on Climate Change updates its advice on the scale of the net zero challenge.
Ofgem Chair Martin Cave delivered a keynote speech to the Citizens Advice Consumers at the Heart of the Future Energy System conference last week, focusing on the regulator’s future plans to help protect consumers. It was, we suggest in our Regulation section, a spirited defence from Ofgem’s new Chair of intervening in the market on distributional grounds, including the price cap and a more ambitious new vulnerability strategy.
In Industry Structure, we discuss a report produced for National Grid Ventures on the contribution of interconnectors to GB security of supply. It’s an interesting read on an interesting, if rather technical issue, and one that BEIS will wish to consider as part of the five-year EMR review presently underway. We suspect that the current rules in this area will be changed anyway, as the interconnector-led model is replaced.
In this week’s Nutwood, Cornwall Insight’s wholesale analyst Alex McGregor looks at prices for front-year EU Allowances (EUAs) in the European Emissions Trading Scheme (EU ETS) reaching 11-year highs. He explains that the start of the Market Stability Reserve (MSR) in January, a compliance deadline on 30 April and Brexit uncertainty have all played their part.
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