An international energy broker has urged Ofgem to “cut the red tape” surrounding energy purchasing via exchanges in the UK, which it claims is “reducing competition in the power market”.
Independent experts at Bergen Energi UK believe exchange access is restricted by the costs of signing up to, and the ongoing management requirements of, the Balancing and Settlement Code (BSC) – the industry’s governance arrangement for electricity balancing in the UK.
Simon Firth, key account manager at Leeds-based Bergen Energi, said: “Without doubt the current bureaucracy surrounding the BSC is limiting the number of suppliers and end users directly purchasing energy on an exchange, and ultimately, is reducing competition in the UK power market.
“Simplification of this time-consuming and expensive process is needed. As energy guardian of the end consumer, Ofgem is certainly in a position to make changes, and we urge it to do so immediately.”
The request was put directly to Ofgem by Therese Gjerde, head of spot Management at Bergen Energi at a conference discussing the future of energy buying, hosted by the leading broker.
Mr Firth added that Ofgem had this year praised the NASDAQ OMX Commodities for its ability to aid market liquidity and bring stability and transparency to the market. “We completely agree with this assessment: N2EX is an outstanding and innovative exchange,” he said. “However, the requirements and paperwork involved in interacting with the exchange, such as signing up to the BSC, are clearly significantly reducing the number of companies looking to access this efficient trading environment.