"We will watch with interest to see what impact SSE's sale of 100% of its power production into the day-ahead market has. However, this will do little to increase liquidity in the forward power market, where suppliers have been unable to procure all of the power they need to manage the risk that wholesale electricity prices may spike upwards in the future.
"Centrica already sells 80% of its power production into the wholesale market – much of that underpins the forward market. We support the proposals put forward by Ofgem for compulsory auctioning of around 15-20% of power generated into the forward markets. We are confident this would increase liquidity.
"If all power was traded on a day-ahead basis as SSE proposes, that may well increase volatility in electricity prices. If so, this could actually exacerbate the risks for suppliers and could lead to more price volatility for customers."