Electricity associations call for IT overhaul

NEWS The recent price hikes in the UK's electricity trading pool have reinforced the need for an overhaul of IT systems, leading electricity associations claimed yesterday. Following a report by power regulator, Ofgem into inflated July electricity prices, the Association of Electricity Producers (AEP) and the Electricity Association (EA) both claimed the proposed systems will not necessarily create a level trading market for all. AEP chief executive, David Porter, claimed the proposed system would eliminate some existing problems but "no doubt also introduce some new ones". He said: "The new mechanism will depend mostly on bilateral contracts, but to manage the physical supply of electricity on the day, there'll have to be a balancing mechanism. But the balancing mechanism may well be volatile, so some of the characteristics of the pool could well live on. "The review of the trading arrangements is still being worked out, and I hope it will deliver a level playing field for everyone. But I suspect if the balancing market is as volatile as the pool, we'll still have the occasional headline about price spikes," he added. A spokesman for the Electricity Association agreed. "One can change the market but not change the nature of the fluctuations in hour-by-hour electricity prices. There is a seasonable aspect to the way electricity markets work. The regulator himself (Stephen Littlechild) expects that the system will be volatile and expects price spikes in the market."