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on Sep 17, 19 • posted by rhoggett •

Submission: BEIS / Ofgem Consultation on Flexible & Responsive Energy Retail Markets

Submission to BEIS / Ofgem Consultation on Flexible and Responsive Energy Retail Markets

Exeter Energy Policy Group, University of Exeter

Catherine Mitchell, Richard Hoggett and Rebecca Willis

Section 1: Introduction

We, the Energy Policy Group (EPG) of the University of Exeter, welcome this opportunity to make comments on the Flexible and Responsible Energy Retail Markets (FRERM) consultation document Consultation. EPG members have been working on this issue for several years. One of the EPG projects in particular, Innovation and Governance for a Future Energy System (IGov), has been focusing on this issue since 2012.

The EPG agrees that flexible and responsive energy retail markets are a central component of a rapid, just and decarbonised energy system transformation. And we are pleased that Ofgem and BEIS are thinking about how to best deliver them.

However, we find that this Consultation has overly concentrated on price. It seems to be saying if only it can get retail price down, then GB will manage to deliver a flexible and responsive retail market. In our view, this misses out on the many aspects which impact on customer price, and their importance to bills, and why people do (or do not do) the things they do.

On the other hand, we are very pleased to see on page 25 of the Consultation a discussion about developing a new overarching regulatory framework: a ‘modular’ approach to regulatory reform. We think that the issues facing the energy system are so different from those at play when the current energy system framework was put in place in 1986 and 1990 that there is a need to overhaul the current GB energy governance framework. We would support a new modular approach to regulatory reform.

IGov has set out its framework (ie its modular approach) for delivering an agile, equitable, customer focused, cost effective energy system – capable of also meeting our net zero targets on time.

This submission is set out in the following way. Section 2 provides a brief review of our differences as set out in the Consultation. Section 3 provides a brief overview of the IGov arguments for modular regulatory reform, if GB is to have flexible and responsive retail markets – and this includes the need for market design change. Section 4 concludes.

You can read the full submission here: EPG submission to BEIS-Ofgem Flexible & reposnsive energy retail markets consultation 16-09-19