Smaller generators get a voice in the new electricity market

Brian Wilson, Minister for Energy, today announced a new ‘Consolidation Working Group’ to consider how smaller generators can co-operate together better in order to compete in new electricity markets.

Brian Wilson, the UK’s Minister for Energy, today announced a new ‘Consolidation Working Group’ to consider how smaller generators can co-operate together better in order to compete in new electricity markets.

The Consolidation Working Group will be made up of smaller generators, National Grid, Balancing and settlement code participants, Ofgem, the DTI (Department of Trade and Industry) and DEFRA (Department for Environment, Food & Rural Affairs). Ofgem will facilitate the group and publish the interim and final reports.

‘NETA (new electricity trading arrangements) has been a big success. Under the old Pool arrangements, prices were kept artificially high. The introduction of a more transparent, inclusive and efficient pricing system has meant that wholesale electricity prices are up to 25% lower,’ said Mr Wilson.

‘But we must act to address the issues faced by smaller generators under NETA. The Government remains strongly committed to renewable and combined heat and power generation in particular,’ he added.

The DTI has also asked consultants ILEX to attend meetings of the Consolidation Working Group and provide a report to DTI identifying and addressing wider structural and regulatory developments that may impact on obstacles to consolidation.

This could include transmission access and losses arrangements, the extension of England and Wales electricity trading arrangements to Scotland, and measures to encourage embedded generation.