Energy Group takes price blame

ENERGY GROUP, the US-owned electricity generator, has been responsible for nearly half the price spikes in the UK electricity pool over the past year, according to figures circulating within the industry.

An analysis of price movements in the pool between last April and the start of this month shows that Energy Group has been responsible in 44 per cent of cases where the price has exceeded pounds 70 a megawatt hour.

Last month the energy regulator, Callum McCarthy, accused the three big coal-fired generators - National Power, PowerGen and Energy Group - of rigging the market to maximise prices and their own profits. The day after he made his comments, the system marginal price - the amount that all bidders into the pool receive for their electricity - was the highest for that day of the week since the pool began in 1990 and the fourth highest on record for any day. Mr McCarthy, who has said that the price spiking is unfair to customers, has threatened to amend the generators' licences unless they stop "gaming" in the pool for their own commercial advantage.

The leaked industry figures also show that in 34 per cent of cases over the past 10 months, high system marginal prices have been set by a tiny generating plant in Brigg, South Humberside, run by the Finnish company IVO. Both Energy Group and IVO have bid fairly into the pool in line with the pool rules. But critics of the system say IVO's disproportionate influence on prices shows why the pool needs urgent reform.

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