The UK's energy market regulator Ofgem has approved changes intended to bring greater transparency to the wholesale gas market in a move that has angered upstream players.
Ofgem is reacting to pressure from the cosnumer body Energywatch that consumers – especially major energy users – be given better information about the quantity of supply to the UK gas market.
The UK has suffered from sustained high gas prices in recent months – and many would say years – and these spikes have recently been exacerbated by the closure of the largest storage platfrom in the North Sea, Centrica’s Rough facility.
Now Ofgem believes consumers need additional transparency to make the market function more efficiently.
Customers, many of whom are amongst the largest UK companies, have told us that their experience this winter shows there is still a need for more information on gas supplies to help them understand and respond to gas price movements on the day. Information is the lifeblood of an effective market and better information will help reduce uncertainty, Ofgem’s chief executive Alistair Buchanan was quoted as saying by the Independent.
Upstream players, represented by the UK Offshore Operators Association, are angry that moves will lead to the dissemination of commercially sensitive information.
We think that those who lobbied for the modification, believing it would secure more competitively priced gas, will be bitterly disappointed, says David Odling, UKOOA’s gas issues manager.
It will expose commercial positions when fields run into production difficulties and therefore risks creating even greater price volatility, he added.