Posted on: 29/05/2018
Industry body Energy UK has urged a number of changes to the Electricity Market Reform mechanisms to “provide a level playing field for all participants and technologies”.
Energy UK said it continued to support for the programme’s two major elements - the Contracts for Difference (CfD) and Capacity Market auctions - but makes a number of recommendations to ensure “they remain fit for purpose in future” and enabling investment at lowest cost.
The vision paper’s recommendations include that there should be a revenue stabilisation CfD to reflect substantial cost reductions in a number of low carbon technologies.
It also says there needs to be greater clarity on timing and rules for future CfD auctions in order to help generators develop supply chains and plan more effectively for future investment.
The Capacity Market should allow renewables to participate in future and should also look to see how innovative new models such as hybrid and aggregated sites can take part.
Energy UK said that by drastically reducing costs and incentivising billions of pounds of investments, the EMR policy has driven growth and established the UK as an international leader in the technologies involved.
The latest CfD auction in September 2017 saw the cost of offshore wind projects nearly halved whilst the latest Capacity Market auction resulted in the lowest clearing price ever.
EMR has been 'success story'
Lawrence Slade, chief executive of Energy UK, said:
“EMR has been a success story and shows that with the right framework and incentives, low carbon energy can be delivered at an ever-reducing cost to customers, whilst ensuring we keep the lights on.
“By stimulating billions of pounds of investment and innovation, it has helped the UK become a world leader in green technology - creating jobs and economic growth across the country. It has also benefited the environment by helping the energy sector to continue to reduce emissions, which have halved since 1990, to a point where low carbon sources now frequently account for the majority of total generation.
“However it is essential that we not only keep up the pace of decarbonisation in future but go further and faster. That’s why we are making recommendations which can make EMR deliver even more effectively in future.”