SSE makes energy sourcing more transparent
'Big Six' energy giant SSE is to source all its energy in the day ahead market and auction all of its electricity supply.
While the move is unlikely to affect prices for consumers it could be a huge bonus to smaller renewable producers who could compete more evenly with big international fossil fuel suppliers.
And while the move is good for renewables producers the transparency the move brings to the market should, according to Consumer Focus, at least bring reassurance to customers if not cheaper bills.
From this Friday (October 14) SSE will begin phasing in the new scheme by trading a ‘proportion’ of its total electricity supply and demand with the aim of hitting 25% during November.
Currently the British day ahead electricity market trades volumes of around 40GWh a day – with a further 200GWh through brokered markets.
SSE is also the second largest electricity generator in the UK and last year generated over 47,500 GWh of electricity, which represents almost 15% of the UK electricity demand.
SSE’s generation and supply director, Alistair Phillips-Davies, said: “This commitment from SSE will significantly improve the liquidity in the wholesale electricity market and help to address one of the perceived barriers to entry into the electricity supply market.
“If other energy companies adopt a similar approach, this commitment could lead to a transformation in the wholesale electricity market in Great Britain.
“We believe this commitment represents the most significant change to the GB electricity market since the market arrangements were amended in 2005, to form the current market arrangements known as BETTA.
“Customers have demanded greater transparency around how we operate in the wholesale market.
“As well as improving liquidity, this approach will also improve the transparency of SSE’s activity in the wholesale market.”
Consumer Focus director of external affairs, Adam Scorer, said: “The opening up of the day-ahead market is unlikely to make much difference to prices across the big suppliers in the short-term, as they purchase most of their energy well in advance.
“But it should make it easier for new players to enter the energy supply business and help existing small suppliers to grow.
“More open trading will help to increase transparency over the prices suppliers pay and increase competitive pressure in the market – which will help to keep pricing fair for consumers.”