Market-friendly approach urged as EMR moves forward
SmartestEnergy has highlighted a number of concerns in response to the Government’s detailed proposals for the biggest shake-up of the energy market since privatisation.
The Electricity Market Reform White Paper published on Tuesday sets out key measures which the Department of Energy & Climate Change said would attract investment, reduce bill increases and create a secure mix of electricity sources including gas, new nuclear and renewables.
Although SmartestEnergy broadly supports the moves to promote renewables whilst ensuring security of supply, Head of Regulation Colin Prestwich urged the government to take a “market-friendly approach” as it looks to finalise its plans.
“The growth of companies such as SmartestEnergy shows that market solutions can develop without the need for wholesale restructuring of the market and we believe that a proliferation of auctions and government agencies would be a backward step,” he said.
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 is the UK’s leading purchaser and supplier of independently generated electricity.
It purchases power from 600 independent power producers from across the UK ranging from sub 1-MW to 420MW, and including blue chip industrial companies such as Atkins Power, British Sugar and Viridor Waste Management.
SmartestEnergy supplies half hourly metered companies with renewable and good quality CHP at prices competitive with traditional power supply. Customers include Marks and Spencer, Toyota and L’Oreal. It is able to deliver renewable power from a variety of technologies, and track this from source to supply using renewable energy certification. It currently purchases more than 10 per cent of all renewable electricity generated in the UK.
SmartestEnergy was founded in 2001 and is wholly owned by the Marubeni Corporation, one of Japan’s largest trading houses.
It has more than 90 employees based in its Headquarters in London and office in Ipswich.