This is a submission to the Targeted Charging Review: minded to decision and draft impact assessment from Catherine Mitchell of the University of Exeter’s Energy Policy Group and its Innovation and Governance (IGov) project. Ofgem’s Minded To document comes to two preferred options: one related to fixed charges (the preferred outcome), and the other related to some form of capacity charge. Much has been written about delivering an energy system transformation in the most cost effective way, which is also equitable and secure. And it is very clear that what a regulatory system should not do if it cares about equity or sustainability is put a generalised fixed charge in place. By putting in place a fixed charge, it would be dis-incentivising those which have endeavoured to have an energy efficient home, with energy efficient electricity appliances and decarbonised heat; it would be undermining the necessary investment for a flexible energy system (electric vehicles, storage, solar pv); it would be undermining of business models which can provide more flexibility (demand side response); it would be undermining those technologies which can bring down total peak capacity needs, and therefore bring down the overall average price of electricity, as well as peak price of electricity; and it would be undermining innovation, vital for energy system transformation.
IGov 7th Feb 2019 read more »