BEIS power market review welcome news, says IEA analyst
13 June 2022
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Commenting on reports the Department for Business, Energy and Industrial Strategy will bring forward proposals for energy market reform as part of its energy security strategy, Andy Mayer, energy analyst and chief operating officer at free market think tank the Institute of Economic Affairs, said:
“It is welcome news that the government has heeded calls for a fundamental review of the structure of power markets. The current system means most renewable energy generators are being paid windfall profits in excess of 100 per cent for no better reason than having their prices linked to the price of gas, to which a further subsidy is then added. Both elements are contributing to the cost-of-living crisis and need to change.
“It is right to further consult on reform. Rumours about guarantees for renewables, and a market for everyone else, do not look wise. Secure, affordable supply requires a technology-neutral level-playing field, no subsidies, and social goals like decarbonisation should be addressed through carbon pricing. Ministers picking winners and setting prices undermines competition, and means cycles of boom and bust in investment as the government reacts to the latest crisis caused by the last bad decision. The IEA will contribute to the review.”
ENDS
Notes to editors
Contact:
IEA spokespeople are available for interview and further comment.
Link to report: https://www.thetimes.co.uk/article/energy-market-reform-will-cut-fuel-bills-dpvr79hcl
“It is welcome news that the government has heeded calls for a fundamental review of the structure of power markets. The current system means most renewable energy generators are being paid windfall profits in excess of 100 per cent for no better reason than having their prices linked to the price of gas, to which a further subsidy is then added. Both elements are contributing to the cost-of-living crisis and need to change.
“It is right to further consult on reform. Rumours about guarantees for renewables, and a market for everyone else, do not look wise. Secure, affordable supply requires a technology-neutral level-playing field, no subsidies, and social goals like decarbonisation should be addressed through carbon pricing. Ministers picking winners and setting prices undermines competition, and means cycles of boom and bust in investment as the government reacts to the latest crisis caused by the last bad decision. The IEA will contribute to the review.”
ENDS
Notes to editors
Contact:
IEA spokespeople are available for interview and further comment.
Link to report: https://www.thetimes.co.uk/article/energy-market-reform-will-cut-fuel-bills-dpvr79hcl
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