2021’s most exciting ‘Charts of the week’

Some of our team have looked back throughout 2021 and picked their most exciting ‘Chart of the week’. Read about their choices and click through to read the full ‘Chart of the week’. To do so, you need a free Cornwall Insight account which is easy to create here.

It was a little tricky to choose a ‘Chart of the week’ for 2021. When I look back at what’s happened in the market over the last year, the supply markets have faced challenge after challenge, much of it with a gloomy outcome.

However, I thought the sentiment captured in our June ‘Chart of the week’ about the uptake of green tariffs supported a broader positive message in meeting sustainability targets. While it is true to say the rising proportion of consumers choosing green electricity tariffs over the last few years have primarily sought out competitively priced, REGO backed tariffs, I’m not convinced this entirely removes the underlying interest in renewable energy from household and small business consumers. It has also raised interesting questions about decarbonised energy services in the future – are there any lessons learned from the decarbonisation of power over the years that could now be translated into future decarbonisation of heat and transport?

This issue will be tackled again by BEIS “in due course” through the Retail Market Strategy, as it looks further into transparency around green products and services. In the meantime, we will continue to track market developments as they unfold.

This ‘Chart of the week’ showed a tough outlook for winter. High summer gas prices were the early warning sign of hard times ahead. But little did we know just how hard – our commentary includes the fabulous understatement “gas and power prices in the near term will remain supported”. Indeed they did, to reach the record highs seen over recent months.

Sadly, a likely future chart showing the fall-out from supplier failures driven by the gas price crisis will be bleak for consumers. The increases in the price cap we have been forecasting will likely be only the tip of the iceberg once the Supplier of Last Resort costs are fully known.

This is my top ‘Chart of the week’ of 2021 because it provides an update on the Market-wide Half Hourly Settlement programme. Looking forward to 2022 we are expecting the design baseline around May, which is basically the detailed design arrangements building on the Target Operating Model and following this, it will be a very active time in regulation as we anticipate a lot of modifications being raised as a result.

It should also be noted that the programme timeline is due to be reviewed in the spring.

With the long-awaited return of Pot 1, or “established”, renewable technologies into the upcoming Contracts for Difference (CfD) Allocation Round 4 (AR4) auction, the energy market analysed the government’s draft budget notice and draft Allocation Framework with fine toothcomb in September. The budget and Allocation Framework will ultimately determine how much renewables capacity will be able to secure contracts in CfD AR4, which will be pivotal in meeting both the UK’s 40GW offshore wind target by 2030 and wider Carbon Budgets as we aim to achieve net zero emissions by 2050. This ‘Chart of the week’ looked at the range of potential capacity levels that could secure contracts based on the auction parameters set, and varying strike price bid levels from developers.

I picked this ‘Chart of the week’ as my favourite for this year as I believe the issue of where the policy costs fall and how they are recouped is really important. Whether costs should continue to fall on the electricity and gas bills or move onto general taxation is a very important area of discussion which needs to be had and agreed on as part of the net zero transition. This ‘Chart of the week’ covers a range of options that could occur and the outcomes. I hope that as we move in 2022, these discussions continue and we see concrete decisions regarding the way forward.