news archive: electricity market reform

DECC announce Technical Update on Electricity Market Reform proposals - 15/12/2011

On 15th December, the Department of Energy and Climate Change announced a Technical Update on Electricity Market Reform proposals. In the update DECC have expressed the view that the System Operator best meets their criteria for the delivery of both the Feed-in Tariff with Contracts for Difference (FiT CfD) and capacity mechanism. Alongside the System Operator, there may be a role for an organisation such as Elexon, which has much of the information and skills necessary to manage the payments.

The update further outlines that a capacity mechanism in the form of a Capacity Market will be implemented. The mechanism will be market-wide and based on ensuring a required volume of capacity. As per the costs of other environmental schemes, it is anticipated that the costs of meeting the FiT CfD will be borne by suppliers which, in turn, are free to pass these costs to consumers. A more detailed design of the payment models for the FiT CfD will be set out in early 2012

> Read the full Technical Update

Chancellor announces Autumn Statement and releases 2011 National Infrastructure Plan - 29/11/2011

On 29th November 2011, Chancellor George Osborne announced this year’s Autumn Statement to Parliament. Included in the statement was a £250mn rebate for energy intensive industries to allow for the relief from the Climate Change Levy for Climate Change Agreement to increase to 90% and to counteract the knock-on costs of the Carbon Price Floor and the EU Emissions Trading Scheme. The statement has also allocated £30bn for investment in new infrastructure projects and a further £200mn to encourage uptake of the green deal scheme.

This announcement comes on the same day that the National Infrastructure Plan 2011 is published. The plan has identified an infrastructure pipeline of 500 projects in the next decade worth around £250bn. A significant amount of the investment will be concentrated on large projects including nuclear and offshore wind.

> Read the Full Autumn Statement

> Read the full National Infrastructure Plan 2011

SmartestEnergy response to EMR Capacity Mechanism options – 4/10/2011

Consultation on these options closed on 4/10/2011. SmartestEnergy reviewed the options presented in depth and have proposed an alternative approach - an extension to the STOR mechanism. We are awaiting the publication of other stakeholders’ views on this consultation. DECC are expected to make a decision by the end of the year.

> Read the press release

> View the full DECC consultation

SmartestEnergy response to EMR White Paper – 14/07/2011

SmartestEnergy has highlighted a number of concerns in response to the Government’s detailed proposals for the biggest shake-up of the energy market since privatisation.

Although SmartestEnergy broadly supports the moves to promote renewables whilst ensuring security of supply, it urged the Government to take a “market-friendly approach” as it looks to finalise its plans.

> Read the press release

EMR White Paper published – 12/07/2011

Proposed measures including a Carbon Price Floor, new long-term contracts (Feed-in Tariff with Contracts for Difference) and a Capacity Mechanism were announced in the Government’s ERM White paper.

> Read the press notice from DECC

SmartestEnergy response to EMR consultation - 15/03/2011

SmartestEnergy has released a full response to the Electricity Market Reform consultation. In its response to the Electricity Market Reform consultation, SmartestEnergy said it “broadly supports” the proposed package of measures which aim to promote renewables whilst ensuring security of supply.

> View the full response

> View the accompanying press release

Launch of EMR consultation – 16/12/2010

This is a statutory consultation on the government's preferred electricity market framework.