ANALYST VIEWS: WHAT DO OFGEM’S PLANS MEAN FOR THE BIG SIX?

KEITH BOWMAN | HARGREAVES LANSDOWN
The awkward balance between shareholders, customers and required asset investments continues to generate stresses in the UK, which are being magnified by the rising oil price. While power companies provide attraction for investors consensus opinion is for now, broadly neutral. Emerging markets are also increasing demand.

TINA COOK | CHARLES STANLEY
While the Big Six have demonstrated progress in some areas, there is further scope to reduce tariff complexity and improve electricity, market liquidity and transparency.
The challenge is to balance the needs of consumers with the heavy burden of investment on suppliers.

ANGELOS ANASTASIOU | INVESTEC SECURITIES
It is not clear how the 10-20 per cent auctioning of power will work in practice, but it would seem likely that companies will work towards some variation of the proposals. As a general observation, we believe that the government would not particularly want the supply industry to be sent to the Competition Commission for two years or so, at a time when it is encouraging many of the same companies to invest many billions of pounds over the next decade.