Sector movers: SSE buys stake in ground source heating firm

09.04.2008

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The electricity sector is still weighed down by yesterday's announcement that energy regulator Ofgem has launched an investigation into Scottish and Southern Energy and Scottish Power following a complaint alleging abuse of dominant market positions.

The industry regulator said it has launched the inquiry under section 18 of the European Commission's Competition Act.

"This decision was based on a formal complaint alleging abuse of a dominant position in the electricity generation sector arising from constrained capacity on the transmission network, as well as informal enquiries," Ofgem said in a statement.

Ofgem did not comment on the origin of the complaint, but added that the investigation is completely separate from the probe into the energy supply markets which it launched in February.

"No specific allegations have yet been put to SSE, but we are confident that our actions in the electricity generation market have always been justifiable in economic terms and consistent with the operation of a competitive market," said SSE.

"With any Competition Act investigation there is a process to be followed and we will cooperate fully with Ofgem throughout this process in order to bring it to a speedy conclusion," the group added.

Meanwhile, Scottish & Southern Energy has been beefing up its ground source heating activities through the £15m acquisition of a 20% stake in Geothermal International.

Geothermal is the UK's leading supplier of ground source heating and cooling systems and also has a small presence in Europe.

Reaction to the change at the top at BT has been generally favourable, with many pundits happy at the appointment of Ian Livingston as chief executive even if others are disappointed at the timing of the departure of Ben Verwaayen.

Verwaayen will step down as chief executive on 31 May and will leave the board at the end of June after six years at the company.

Livingston's role will be filled by Gavin Patterson, who is currently group managing director of BT's consumer division.

The Financial Times reported today that Livingston is considering strengthening BT's wireless portfolio, and may deploy a WiMAX network in the UK. WiMAX is a wireless technology that can provide data over long distances in a variety of ways, from point-to-point links to full mobile cellular type access.

Livingston told the FT that the company had achieved a lot of success with its Wi-Fi offerings and would look at evolving that strategy.