Morning, Tuesday, 8th September 2020
***Full-scale policy conference taking place online***
This conference will assess the future of Electricity Market Reform in the UK, and what is needed from policy to further support, develop and protect UK energy markets.
Key areas for discussion:
The Capacity Market (CM)
- How best to ensure that the CM is fit for purpose, and can deliver reliable, cost effective, and decarbonised power supplies to the UK energy system;
- Lessons from the EU Commission investigation, and how improvements might be designed and implemented, including:
- amended auction rules and increasing the participation of non-generation technologies like demand side response, and the opportunities this can present for:
- supporting smart energy business models, and
- reduced energy costs for consumers.
- options for lowering the capacity threshold for auctions and prospects for greater participation and more competition,
- simplifying the rules and regulations of engagement, and
- reducing barriers to entry by making the process more transparent.
- The COVID-19 health emergency, and how the disruption for energy sector and CM contract stakeholders can be minimised, including:
- maintaining capacity during disruption,
- latest thinking on how generation units can be operated to protect security of supply,
- dealing with the risk of CM participants missing obligations, and
- how the fine system might be reformed to avoid unfair fees, non-compliance penalties, and widen the appeals process during this time.
Contracts for Difference (CfD)
- Steps for ensuring CfDs continue to scale up clean and emerging generation technologies, as well as reduce technology costs and bills for consumers, looking at:
- possible extension of the scheme to 2030, and what this might mean for:
- further reducing commercialisation costs,
- expanding onshore and offshore clean energy capacity, and
- supporting business development.
- utilising CfDs to further innovate clean generation, and support the development of technology such as floating offshore wind and tidal; and
- ensuring the pricing system is fit for purpose - including:
- keeping strike prices low through widening participation and competition, and
- reforming negative pricing rules, so that excess capacity is not subsidised unnecessarily.
Energy system infrastructure, regulation and codes
- Steps for modernising electricity network infrastructure, looking at:
- ensuring it can meet pressures around supply and demand, and integrating clean generation, and
- how the regulatory system might be reformed to support the EMR programme and market growth.
- Ensuring the electricity grid is flexible, can balance supply, and procure capacity and distributed generation at the lowest costs for network users; and
- Energy system regulation, and reform that can:
- reduce barriers to entry,
- harness smart and flexible technologies, and
- support competition among technology developers and energy suppliers.
Developments that are relevant to the discussion:
- Commitments in the Budget and the Government’s manifesto for supporting the development of new energy technologies and their contribution to national decarbonisation goals, including:
- plans to at least double the size of the Energy Innovation Programme by the end of this Parliament,
- delivering 40GW of UK offshore wind power capacity by 2030,
- increasing public research and development funding to £22bn a year by 2024-2025, and
- continuing to reduce the costs of wind and solar power while increasing its presence in the UK energy system, as well as keeping costs low for consumers.
- The Capacity Market (CM):
- publication of the Five-Year Review, which outlined a roadmap for how the scheme can reduce barriers to entry going forward,
- the Government’s response to closed consultation on proposals for improvements to the CM
- the in-depth investigation coordinated by the European Commission in 2019, with consent eventually granted to the UK Government - which sought to determine:
- whether the CM violated state aid regulations, and
- if it discriminated against certain technology types.
- Contracts for Difference (CfD):
- ongoing consultation on proposed amendments to the CfD scheme - including around changes to system design, pricing, and maximising low-carbon potential for net-zero, and
- the recent announcement that the ban on Pot 1 technologies like onshore wind and solar power will now be lifted for CfDs; and
- The ongoing Energy Network Codes Review and its consultation on stakeholder views - which seek to make regulation and codes governing the energy system fit for new participants, smart technologies, and supporting competition.
- Electricity Market Reform and priorities for development a year on from the EU Commission investigation;
- Ensuring Capacity Market design is fit for purpose and addressing key challenges - expanding auction participation and protecting contract holders from COVID-19 disruption;
- Incorporating non-generation technologies and lessons from the Commission study - widening market access, maximising distributed assets, and enhancing flexibility;
- Ensuring power supplies are stable, meet consumer demand, and maintain generation capacity during COVID-19 disruption;
- Navigating through the CM process in disruptive times - protecting the generator business case, developing new generation capacity, and best practice for requesting appeals; and
- Decarbonising energy supply and keeping costs affordable for consumers.
- Preparing the transmission network for diverse technologies, the net-zero target, and keeping procurement costs low;
- Ensuring the regulation system supports market growth, supplier and technology competition, and reduces barriers;
- Next steps for Contracts for Difference auctions and the return of Pot 1 participants - incorporating onshore technologies, fostering innovation, and accelerating strike price reductions; and
- The future of EMR in the UK and policy priorities for widening participation and supporting stakeholder operations through challenging conditions.
Policy officials attending:
Our forums are known for attracting strong interest from policymakers and stake holders.
Overall, we expect speakers and attendees to be a senior and informed group including Members of both Houses of Parliament, senior government and regulatory officials involved in this area of policy, along with businesses across the electricity market, their suppliers, advisors and partners; legal and financial experts; consumer organisations and other advocacy groups; academics and commentators; and reporters from the national and specialist media.
This is a full-scale conference taking place online***
- full, four-hour programme including comfort breaks - you’ll also get a full recording to refer back to
- information-rich discussion involving key policymakers and stakeholders
- conference materials provided in advance, including speaker biographies
- speakers presenting via webcam, accompanied by slides if they wish, using the Cisco WebEx professional online conference platform (easy for delegates - we’ll provide full details)
- opportunities for live delegate questions and comments with all speakers
- a recording of the addresses, all slides cleared by speakers, and further materials, is made available to all delegates afterwards as a permanent record of the proceedings
- delegates are able to add their own written comments and articles following the conference, to be distributed to all attendees and more widely
- networking too - there will be opportunities for delegates to e-meet and interact - we’ll tell you how!
Full information and guidance on how to take part will be sent to delegates before the conference