Response to government consultation regarding the Review of Electricity Market Arrangements (REMA)

Response to government consultation regarding the Review of Electricity Market Arrangements (REMA) 282 KB

We welcome this consultation. It is important for consumers that this review progresses. We agree that the status quo is not an option and reform is necessary.

Electricity market reform is important for consumers as:

● It can allow consumers to access cheaper renewable energy - a key part of the longer-term path to improving affordability

● It can protect consumers from volatile wholesale prices

● It can reduce energy system costs, and so energy bills, by tens of billions

● It can further improve affordability by allowing consumers to be properly rewarded for being flexible with electricity use

However, to achieve this we believe that analysis and decisions around REMA need to be undertaken within the wider context of other changes that will impact price signals and the overall affordability of bills. The introduction of Market-wide Half-Hourly Settlements (MHHS), and the subsequent impact of default tariffs in the energy retail market, will fundamentally change the baseline against which REMA needs to be assessed.

Also, as Ofgem has recognised , the introduction of targeted bill support could ensure that all consumers are better off if considered as part of a package with locational pricing. Additionally, the ability of consumers to react to pricing signals should not be considered to be static. Improving the information and advice available to consumers, as part of wider engagement strategy to broaden accessibility to the benefits of being able to use energy flexibly, has the potential to assist with affordability.

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