Energy stocks hold firm despite Ofgem 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.
Trading boost: Power station group Drax could benefit from changes
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.
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% 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% to £224m but shares fell 34.6p to 440.5p, after it reported delays to several projects.
Most watched Money videos
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- Blue Whale fund manager on the best of the Magnificent 7
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Land Rover unveil newest all-electric Range Rover SUV
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Anglo American to restructure operations as it rejects...
- How refreshing that Anglo has chosen not to grab the...
- AJ Bell launches 'ready-made pension' to help savers find...
- Why 16 to 24-year-olds are putting their parents to shame...
- MARKET REPORT: Vodafone shares rally as investors cheer...
- De Beers eyes £4bn London float as Anglo bids to fend off...
- The new 5.05% limited access account that savers are...
- Currys shares surge after profit guidance upgrade as...
- Marston's losses narrow amid hopes of summer sporting...
- Greggs sales soar as baker's expansion plans roll on with...
- Hundreds of jobs at risk as Anglo slashes funding for...
- Royal Mail's future hanging in the balance as bid...
- Axe stamp duty on British shares, says Flutter boss as...
- Tesco boss pockets £10m in biggest ever pay deal at a UK...
- Santander offers £175 to switch your current account -...
- Virgin Money UK warns of pressure on profits ahead of...
- Investors ramp up bets against BT as new boss prepares to...
- I don't want smart meters, so Eon is charging me £316 to...