UPDATE 1 — UK watchdog moves to protect energy market from wholesale price swings

(Adds details on the consultation throughout) Oct 16 (Reuters) — The British energy regulator Ofgem on Friday launched a consultation on activating its market stabilisation charge, to protect energy suppliers from wholesale price swings and continued market volatility during a possibly tough winter.

Here are some details from the regulator's statement: The mechanism protects suppliers from losses when energy prices fall sharply by compensating suppliers that bought energy in advance if customers switch to cheaper deals Ofgem reintroduced the mechanism in May, after wholesale energy prices soared due to the Iran conflict The consultation seeks views on the proposed activation and how it should operate, including trigger levels, notice periods and deactivation arrangements Ofgem said activating the mechanism would not automatically increase customer bills, with payments between suppliers only occurring if wholesale prices were to fall substantially "We're preparing for what is likely to be a difficult winter for many households," said Neil Kenward, interim director general of markets at Ofgem The mechanism previously operated between April 2022 and March 2024 to protect markets from price volatility triggered by the Russia-Ukraine war (Reporting by Prerna Bedi in Bengaluru; Editing by Janane Venkatraman) ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;)