Energy regulator Ofgem has unveiled proposals today for a major overhaul of the UK market including the “Big Six” auctioning up to 20 percent of their electricity generation output.
Ofgem’s review found that competition is being stifled by a combination of tariff complexity, poor supplier behaviour, and lack of transparency.
Ofgem is proposing a new licence condition that would require the Big Six - British Gas, EDF Energy, npower, Scottish Power, E.on, and Scottish and Southern Energy - to make available between 10% and 20% of their power generation into the market through a regular Mandatory Auction (MA).
Ofgem is also consulting on Mandatory Market Making Arrangements to ensure that smaller players in the energy market have access to a transparent and accessible platform that allows continuous trading.
Ofgem giving the industry until 1 June 2011 to engage and develop proposed interventions or to propose alternative arrangements to address its liquidity and contestability concerns.
Ofgem also announced a new investigation into Scottish Power’s standard credit prices.
This is in addition to an ongoing investigation into British Gas, EDF Energy and npower and into how they handle consumers’ complaints.
Ofgem is also continuing its investigations into misselling by EDF Energy, npower, Scottish Power, and Scottish and Southern Energy.