The British Institute of Energy Economics (BIEE) held a one day conference on 21 September at the Department of Business, Energy and Industrial Strategy (BEIS) somewhat cheekily titled: “Is There a Plan? UK Energy Policy for the 2020s”, coming as it did ahead of the Government’s publication of the Clean Growth Strategy While there was much acknowledgement of failings in UK energy policy and the enormous challenges ahead, particularly when it comes to decarbonising heat, there was palpable optimism in the room when looking to the future. One of the key messages was that the traditional “trilemma” is no more. Several experts said that the three dimensions of low costs, security of supply and reduction in carbon emissions no longer represent a challenge. Instead, according to one expert, we are now facing a 3D challenge: Digitisation, Decentralisation and Decarbonisation. Another expert went further and suggested that the energy sector is actually facing a 5-dimensional challenge: Decarbonisation, Decentralisation, Digitisation, Democratisation, and Disintermediation. Yet another suggested that Diversity should also be added to the list. In this brave new “D” world, issues of low cost and security of supply are sure to remain. For example, it is unlikely that the annual press obsession with winter blackouts will disappear. Yet at the heart of the shift in the thinking on future challenges is the potential that can be harnessed from “smart” systems. This conference also demonstrated this shift by focusing on how “smart” systems could change the way energy is generated, supplied and consumed.
SPRU 26th Oct 2017 read more »
Energy price caps have been an important part of the political landscape ever since Ed Milliband announced he would freeze prices in 2013, if the Labour Party was elected at the next election. This ultimately led to a Competition and Mergers Authority Investigation into the Energy Market, and the degree to which it is competitive (please see the IGov website for our multiple submissions to the CMA investigation, kicking off with our first submission and oral evidence here and here). The CMA Final Report was published in 2016, but the argument about how the uncompetitive energy market allows customers to be ‘ripped off’ has rumbled on in the press, becoming ever more political in its nature. A prepayment safeguard tariff was introduced for customers eligible for prepayment meters (about 4 million), coming into effect in 2017 -2020, with a review due in 2019. However, this did not satisfy those involved in the discussion. The Labour Party announced at the 2017 Labour conference that they would cap the average house dual-fuel bill at £1000 (see Table 1 and Figure 1 for its impact). Theresa May announced at the Conservative Party 2017 conference that there would be an extension of the Safeguard price cap, quickly followed by an Ofgem announcement of a Safeguard tariff for about 1 million of those eligible for a Warm House Discount . In parallel, Dieter Helm was asked to undertake an independent cost of energy review, just published and this will be focus of another blog.
IGov 26th Oct 2017 read more »
