- Press Releases
July 19 (Renewables Now) - The UK government on Monday launched a review into Britain’s electricity market design intended to reduce exposure to volatile gas prices and ensure that consumers benefit from cheaper renewables.
Until October 10, the Review of Electricity Market Arrangements (REMA) is seeking views on a breadth of options to meet the challenges of higher global energy costs, the need for improved energy security and the transition to a decarbonised energy system.
Business and Energy Secretary Kwasi Kwarteng said this could be the biggest electricity market shake-up in decades.
“We’ve just seen the price of offshore UK wind power fall to an all-time low and gas is a shrinking portion of our electricity generating mix, so we need to explore ways of ensuring the electricity market is adapting to the times,” he explained.
“That includes ensuring the cost benefits of our increasing supply of cheaper energy trickle down to consumers, but also that our system is fit for the future – especially with electricity demand set to double by 2035,” Kwarteng further said.
The government’s suggestions include changes to the wholesale electricity market to ensure that the increasing share of cheaper electricity from renewable energy will determine the price more often instead of volatile gas prices; incentives for consumers to use grid power when demand is low or it is very sunny and windy; and reforming the capacity market to increase the participation of low-carbon flexibility technologies such as electricity storage.
The consultation will include the evolution and expansion of existing schemes such as the Capacity Market and Contracts for Difference.
The Department for Business, Energy & Industrial Strategy (BEIS) will use the consultation to further develop options during 2022-2023 before coming up with proposed reforms.
The REMA was first announced in the British Energy Security Strategy in April.