Sparks fly over plans for energy market overhaul
Britain's quoted energy firms shrugged off industry regulator Ofgem's plans for an overhaul of the gas and electricity market as City analysts warned the move carried a high risk of unintended consequences.
Ofgem yesterday announced changes including simpler pricing and the auctioning of a fifth of the energy produced by the so-called Big Six suppliers - British Gas-owner Centrica, Scottish & Southern Energy, Scottish Power, E.On, EDF Energy and Npower.
The companies must act before June 1 or face possible referral to the Competition Commission. But despite initial falls, the London-listed firms' share prices mostly recovered.
Trading boost? Power station group Drax
Centrica was down just 0.7p at 327.8p, SSE up 1p at 235p and network owner National Grid up 1p at 578p. Scottish Power is Spanish-owned, E.On and Npower are German and EDF is French.
Matrix analyst Adam Forsyth said the moves might mean a small increase in competition for Centrica and SSE.
'More concerning is the proposal to require the big six energy firms to auction up to 20 per cent of their electricity output,' he added. 'We think this sounds a little arbitrary and runs the risk of unintended consequences.' Companies with flexible generation and which are good at trading may see a benefit, Forsyth said, which could boost power station group Drax (down 4.6p at 415.4p).
Meanwhile, Indian power firm Essar Energy was the biggest faller of the day, but it vowed that growth plans would not be derailed by project delays. It said profits before tax rose 28 per cent to £224million but shares fell 34.6p to 440.5p, after it reported delays to several projects.
Most watched Money videos
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Blue Whale fund manager on the best of the Magnificent 7
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- How to invest for income and growth: SAINTS' James Dow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Don't try to be a super woman - build a dream team! The...
- The plant that can add £10,000 to the value of your home...
- Reckitt Benckiser under the cosh over baby formula, says...
- Stock market given a shot in the arm as Raspberry Pi and...
- Recruitment in private sector falls for tenth month in a row
- Business leaders call for flagship scheme to get young...
- Helium and hydrogen company set to join stock market in...
- Britain's nascent battery industry receives shot in the...
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- Where is Labour's 'white heat' revolution to revive...
- FTSE 100 hits an all-time high - but remember the stock...
- British businesses awash with 'accidental' bosses who...
- Shipping broker Clarksons on list of shame after...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- Virgin Money's biggest independent investor...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...
- TONY HETHERINGTON: Boss behind firms fined £340k for more...