Energy News

Scottish Dominance Probed by Ofgem

Tuesday 08 April, 2008

By Dan Drage

The Scottish powerhouses, dominant in the energy market last year, are under investigation for abusing their leading positions in the energy market.

The official Ofgem statement reads:

‘This decision was based on a formal complaint alleging abuse of a dominant position in the electricity generation sector arising from constrained capacity on the transmission network, as well as informal enquiries.’

Between them, Scottish Power (www.scottishpower.co.uk) and Scottish and Southern Energy (www.scottish-southern.com) own the Scottish transmission system and run nearly all the power stations in Scotland. National Grid has to pay the pair for use of the transmission system north of the border.

This agreement allows the two Scottish providers license to charge more for the use of their high voltage transmission lines when power has to be imported across the border from one country to the other.

A Scottish and Southern Energy spokesperson was quick to distance the provider from any allegations of anti-competitive behavior:

'No specific allegations have yet been put to SSE, but we are confident that our actions in the electricity generation market have always been justifiable in economic terms and consistent with the operation of a competitive market’

They continue:

‘With any Competition Act investigation there is a process to be followed and we will cooperate fully with Ofgem throughout this process in order to bring it to a speedy conclusion.’

Chris Eagle, Commercial Manager at Energy Choices, recognises it’s the big six suppliers who dominate the UK market:

‘The power exerted by the two Scottish companies over energy operations both north of the border and beyond is immense. With the infrastructure they’ve built up, it’ll be almost impossible for Ofgem or anyone to infiltrate the monopoly that these two suppliers hold on Scottish energy supplies.’

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