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News Article

Another bid from "Big Six" to influence the energy market

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The "˜Big Six' electricity suppliers are attempting to influence the energy market in their favour, it has been claimed.
 
The Flexible Generation Group, which represents the UK's fast-growing, small scale, flexible power generation industry, has accused the "˜Big Six' of acting "like the mafia" and "ganging up" against smaller competitors.
 
The group, formed this year and comprising six firms, expect an Ofgem ruling after the General Election that will "decimate" their growing industry and consolidate the dominance of the Big Six to the detriment of consumers.
 
They believe Ofgem's current governance structures give large energy firms undue influence over the reform process and changes in regulation, making it more difficult for new market entrants to compete, increasing prices to consumers and threatening security of supply.
 
The decision makers on Ofgem's Connection and Use of System Code (CUSC) panel overwhelmingly represent companies, including EdF, SSE, Scottish Power and EoN, which will benefit from what is being proposed. It is their recommendations which Ofgem has said it is "˜minded to' accept in its ruling.
 
The small new entrants have no representation on this panel, despite requests to have their voices heard and interests represented.
 
Mark Draper, Chairman of the Flexible Generation Group, commented:
 
"The Big Six energy suppliers have undue influence within the regulatory processes of Ofgem. They are acting like the mafia "“ and are evidently determined to decimate smaller suppliers who pose a threat to their market dominance.
 
"It has become abundantly clear that elements of the energy market are no longer fit for purpose. The big companies have been taking advantage of consumers "“ forcing even the traditionally free market Conservative Party to support a price cap.
 
"The new government that is formed on June 9th must take a close look at Ofgem's expected ruling that will hit flexible, smaller generators hard  "“ energy suppliers that play an increasingly vital role in keeping the lights on during periods of low renewable production.
 
"We would like politicians to step up. The Big Six cannot be allowed to use their excessive influence within Ofgem's processes to gang up on smaller competitors."

 
The Prime Minister has already pledged a new energy price cap, to be introduced if the Conservatives win the election. The business secretary, Greg Clark, said he wanted the energy market to treat people in a "fair and reasonable" manner, arguing that the Competition and Markets Authority finding that people had overpaid by £1.4bn a year and recent price hikes by companies showed the need to intervene.
 
The Government is now being urged to intervene once more to ensure the Big Six cannot wilfully impose stringent regulations on their competitors.
 
The smaller generators that make up the Flexible Generation Group started to spring up five years ago, in response to renewable energy taking up a greater slice of the UK energy market.
 
They play a critical role in rapidly providing rapid quantities of power when there are short-term periods of low renewable production "“ particularly from wind and solar power.
 
At present, they are delivering the lowest cost new generation capacity to Britain - and efficiently provide fast and flexible services to the grid. But the Big Six regard these new players as a serious threat to their longer-term market dominance.
 
This new and innovative group of companies owns and operates approximately 800 MW of generation on the UK electricity system. Its members include Alkane Energy, Eider Reserve Power, Oxford Capital, PeakGen Power, Prime Energy Ltd, and Welsh Power.
 
UK Power Reserve chief executive Tim Emrich has also accused the CUSC committee of acting in a "mafia-like" way "“ skewing on-going modifications to network-charging arrangements in favour of the large, established players.
 

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