- The UK government is set to review Britain’s electricity market design
- The government suggests several measures to address gas volatility and increase clean energy use.
The UK government launched a review of Britain’s electricity market design on Monday. The goal is to reduce consumers’ exposure to volatile gas prices and ensure they benefit from cheaper renewables. The Review of Electricity Market Arrangements (REMA) is seeking input until October 10 on a wide range of options to address the challenges of rising global energy prices, the need for improved energy security, and the transition to a low-carbon energy system.
Business and Energy Secretary Kwasi Kwarteng said this could be the most prominent 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 added.
The government is currently suggesting several measures, including;
- changes to the wholesale electricity market to ensure that the increasing share of cheaper electricity from renewable energy determines the price more frequently rather than volatile gas prices;
- incentives for consumers to use grid power when demand is low, or it is very sunny and windy;
- reforming the capacity market to increase the participation of low-carbon flexibility technologies such as electricity storage.
Existing schemes such as the Capacity Market and Contracts for Difference will be evolved and expanded as part of the consultation.