SmartestEnergy, the leading purchaser and supplier of electricity from independent generators, has urged the Government to take a “market-friendly approach” as it finalises plans for reform of the electricity market.
Although the company broadly supports the aims of Electricity Market Reform to promote renewables whilst ensuring security of supply, it is concerned that some of the measures proposed could risk deterring new generation projects.
“The growth of companies such as SmartestEnergy shows that market solutions can develop without the need for wholesale restructuring and we believe that a proliferation of auctions and Government agencies would be a backward step,” pointed out SmartestEnergy’s Head of Regulation Colin Prestwich.
SmartestEnergy believes the Capacity Payments proposed in the White Paper should be market-based and either open to all or highly targeted to prevent distortion, with no advantages for large-scale players to ensure that local generation is encouraged.
“While extension of the Feed-in Tariff scheme is welcomed we are concerned that the proposed ‘CfD with auction’ proposal will lead to increased costs for suppliers and customers. There is a risk that many successful bidders under such a mechanism would find their projects not viable at the price struck”.
SmartestEnergy believes the most important initiative to support renewable electricity under the reforms is the Carbon Price Support mechanism.
“Under the new system it is vital that clear long-term signals are provided for investors along with as much notice as possible for definitive changes to the tax system,” stressed Colin.
SmartestEnergy will be exhibiting at The Energy Event (13-14 September at the NEC, Birmingham), which focuses on energy procurement, management and efficiency.
For further information, visit https://www.smartestenergy.com/ or call +44 (0)20 7195 1050.
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