§ Mr. KeyTo ask the Secretary of State for Trade and Industry if she will make a statement on the new electricity trading arrangements. [10646]
§ Mr. Wilson[holding answer 30 October 2001]Ofgem published on 31 August a review of NETA's performance over the first three months. Their key findings were that
Wholesale electricity prices are 20–25 per cent. below prices that would have been produced under the pool.Market liquidity has been established with a threefold increase in the volume of trades, and a doubling of the number of contracts struck compared to this time last year under the pool.The National Grid Company is working well to keep the electricity system in balance. Its daily costs of balancing the system have halved, which will also benefit customers.In a competitive market, we expect changes in wholesale prices to feed through to final customers. Domestic customers are seeing lower electricity prices with prices down by around three per cent. as are industrial customers with prices down around 11 per cent. We expect that further prices reductions will take place as wholesale prices feed through fully.
756WThe impact of NETA on smaller generators continues to be a concern. Ofgem also published a report on the impact of NETA on smaller generators in the first two months of its operation. This report highlighted the areas where further action was needed to assist smaller generators. A consultation document was issued on 1 November 2001 aimed at addressing these concerns.