Recent market reforms leave consumers in an uncomfortable position facing painful rises and severe risk from subsidised energy firms. This was according to energy risk management professional, Andrew Hill, who said Government policy hadn’t helped ease the burden.
Mr Hill, Head of Analytics and Publications, EnergyQuote JHA said: “Currently, UKelectricity market arrangements are focused on the promotion of competitive markets, which means that the UK electricity market framework is not fit for purpose to deliver low carbon generation and achieve greater security of supply.
“This is compounded by the fact that unrealistic targets have been set. These targets include ensuring that the production of 30% of electricity, from renewable resources, is achieved by 2020.”
The new electricity market reforms intend to deliver the goals of a decarbonised economy and security of supply. But Mr Hill said this would affect consumers through big bills: “The reform entails a transfer from consumers and government to market players in the form of subsidies, and places more risk with consumers and government. It is expected that hefty bill increases will be needed to deliver this reform.”
On what the energy landscape would look like, Mr Hill said the reforms risked scaring off investors as the UK Government hadn’t provided enough certainty: “There is a possibility that CCS may be required for gas-fired plants in the future and is to be reviewed in 2015. This creates great uncertainty for gas generators going forward. Also there is an indication that retro-fitting may be required. All in all, the lack of clarity may discourage potential investors in gas generation.”