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UK energy watchdog Ofgem on Tuesday said it plans to shorten its price cap implementation period, in a bid to better weather volatile wholesale markets.
Ofgem plans to shorten the implementation period to one month from two months. It means forward prices closer to the price cap period will determine its level.
‘This would mean that, absent any other policy decisions on the cap mechanism, the price observation window would be from March 1 to August 31 for the winter period, one month later than the current observation window. The other policy decisions currently under consideration would push the observation window even later in the year,’ Ofgem explained.
The UK energy watchdog in February lifted its annual price cap by more than 50% to £1,971 from £1,277, as wholesale prices continue to surge. The cap affects 22 million customers and is effective from April.
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