Tag Archives: electricity market reform

What will Brexit mean for the UK’s trade in electricity with Europe?

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26954793856_a891ff7d7f_h (1)This post is by Jonathan Bosch, research postgraduate at the Grantham Institute, Imperial College London.

The internal electricity market (IEM) is one of the major achievements of the European single market, allowing electricity to be traded and transmitted seamlessly across national borders. The UK has played a crucial role in the IEM’s development, working with EU energy regulatory agencies to help achieve ‘market coupling’, whereby power station operation and interconnection capacity are allocated simultaneously to achieve more efficient outcomes. The IEM relies on the physical interconnection infrastructure across the continent, and current plans see an expansion of interconnection between the UK and the European mainland in the coming years.

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Avoiding an energy civil war

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Stromleitung mit SonneThis essay, by Michael Liebreich, CEO of Bloomberg New Energy Finance, also appears in Green conservatism: protecting the environment through open market, published last week by Green Alliance. There are similar collections under ‘Green social democracy’ and ‘Green liberalism’ projects as part of Green Alliance’s Green Roots programme, which aims to stimulate green thinking within the three dominant political traditions in the UK. This has also been published on BusinessGreen.

As things stand, energy risks becoming the most divisive issue within the Conservative Party, the place usually held by Europe. On one side are the Roundheads, determinedly modern, concerned about climate change and convinced renewable energy holds the key to future prosperity and environmental nirvana. On the other, the Cavaliers, dismissive of climate change and convinced that the right combination of tax relief and shale gas will enable the UK to reclaim its glory days as an energy exporter. Read more

Green conservatism: move over Big 6, we need the Big 60,000

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greg300This post is by the Rt Hon Greg Barker MP, minister of state for energy and climate change. An extract first appeared on The Guardian. The piece is from a forthcoming collection of essays: Green conservatism: protecting the environment through open markets. Similar collections are being published under ‘Green social democracy’ and ‘Green liberalism’ projects as part of Green Alliance’s Green Roots programme, which aims to stimulate green thinking within the three dominant political traditions in the UK.

Choice, competition and a dynamic market are all a recipe for success. When the UK electricity sector was privatised in the 1990s, one vast state run monopoly became a teeming market of fourteen new firms, competing for the business of the British consumer.

Thirteen years of Labour government took a different approach to the electricity market. For my money, we ended up with the worst of both worlds. Competition dried up and the sector drifted away from dynamic pluralism to domination by a small number of big companies. By 2010, just six energy firms controlled over 90 per cent of the UK sector. Read more

Will the UK’s electricity market reform deliver investment?

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davey event 030Around 100 representatives from across the energy policy field joined Ed Davey, at a Green Alliance debate on Monday, to discuss the final stages of the somewhat tortuous process of reforming the UK’s electricity sector. The main question asked was whether the process, now going into its third year, will actually result in much needed investment in both low carbon supply and energy efficiency. Read more

Why the UK should introduce payments for electricity ‘negawatts’

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British energy efficiency policy to date has mainly focused on domestic insulation, and rightly so: we have a particularly leaky housing stock and heating costs form the bulk of most household energy bills. But we also need to ensure we use electricity efficiently.

This is particularly important since electricity bills are predicted to rise as we replace our aging electricity system, and as the fossil fuels we use in power stations become more expensive. The UK’s service and industrial sectors are increasingly reliant on electricity and we need to make sure they are as lean as possible so they can emerge successfully from the current recession. Read more

Why a low carbon transition can’t be brought about by stealth

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This post is by Green Alliance’s director, Matthew Spencer. A version of this article first appeared in the ENDS report.

When Clement Atlee was asked how Churchill won the war he said ‘talking about it’. He imbued confidence in a nation by laying out a narrative and making it stick through repetition and reinforcement. In contrast the Coalition government is attempting to deliver the biggest transformation of our energy system since the Victorian age by talking about it as little as possible. Read more

The energy bill must provide certainty for investors

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A version of this article by Green Alliance director Matthew Spencer first appeared on BusinessGreen.

The energy bill maintains the government’s track record of private enthusiasm and public reticence on its low carbon reform agenda. The Coalition appears to have maintained interdepartmental and cross-party support for electricity market reform, but has missed the opportunity to be clear about its low carbon ambitions. As a result it is losing support for reforms which had widespread acceptance two years ago, and the debate has deteriorated into hand to hand fighting between lobbies for renewables, nuclear and unabated gas.

Officials and ministers have spent two years wrestling with the complexity of the new contracting and institutional arrangements, but the draft bill shows that they do not yet have an answer to the most basic question: ‘What is the bill supposed to deliver, and by when?’ Read more