Five things we learnt this week
Zonal pricing officially scrapped
The government has confirmed its widely trailed decision to reform the current national electricity market rather than splitting it into zones. The Department for Energy Security and Net Zero announced on Thursday (10 July) that reformed national pricing was the “right way to deliver a fair, affordable, secure, and efficient electricity system.”
Thames paid out bonuses to prevent top talent exodus
Thames Water’s board green-lighted bonus payments to prevent a senior management exodus, company chair Adrian Montague has revealed. The first of three payments under the management retention plan was made in April to 21 staff worth £2.46 million, despite concerns being raised by government over the payments.
NESO accepted just 50% of bids for winter DFS
The National Energy System Operator (NESO) accepted just 50% of bids in last winter’s Demand Flexibility Service (DFS). NESO’s latest update shows that last winter the total volume bid into the service was 21,677MW, with roughly 50% being accepted totalling 10,842MW. This equates to 10,983.5MWh of bids, with 5,449.6MWh accepted.
Electricity TOs given greater incentives to cover investment risk
Electricity transmission operators (TOs) will have the potential to earn far greater returns than their counterparts in gas, through incentives due to be introduced during the next five-year price control period. Senior Ofgem officials have told investors that it has changed approach for RIIO3 “to reflect the challenge” facing electricity TOs between 2026 and 2031.
Ofwat may accelerate AMP9 asset health spending
Ofwat could bring forward asset health spending earmarked for future asset management periods (AMPs) into the current period. The regulator said it was exploring whether it would be appropriate to accelerate AMP9 expenditure for certain types of assets depending on the scale of the work involved.
