The UK government has today launched what is described as the biggest electricity market reform in a generation.
The Review of Electricity Market Arrangements (REMA) seeks views on a wide range of proposals aimed at responding to skyrocketing energy costs.
The proposals that will be examined and potentially implemented soon include the introduction of incentives for consumers to draw energy from the grid at cheaper rates when demand is low or it’s particularly sunny and windy.
A few days ago, National Grid launched a scheme designed to enable families with smart meters to choose to use less energy when energy supplies are low.
Households could reportedly be paid up to £6 a kilowatt-hour in credit instead of paying 28.34p a kilowatt-hour.
The REMA also consults on decoupling gas prices from electricity produced by renewables, a step that is expected to reduce customers’ bills.
The UK government had previously hinted that this change could soon happen.
The UK government will also look to reform the capacity market so that it brings to the energy system more electricity storage technologies.
Business and Energy Secretary Kwasi Kwarteng said: “We’ve just seen the price of offshore UK wind power fall to an all-time low and gas is a shrinking portion of our electricity generating mix, so we need to explore ways of ensuring the electricity generating mix, so we need to explore ways of ensuring the electricity market is adapting to the times.
“That includes ensuring the cost benefits of our increasing supply of cheaper energy trickle down to consumers, but also that our system is fit for future – especially with electricity demand set to double by 2035.
“In what could be the biggest electricity market shake up in decades, I am confident that this review will significantly enhance GB’s energy security and supply for generations to come.”