Breaking the marginal price link gets widespread backing

Staff
By Staff
4 Min Read

Energy reforms to break the link between electricity and gas prices have drawn broad backing from industry and campaign groups but also exposed tensions over timing costs and delivery.

The Government’s push to overhaul pricing accelerate renewables and expand electrification, has been framed as a response to repeated fossil fuel shocks with ministers arguing the current system leaves consumers exposed to global volatility.

Reactions suggest strong support for the direction of travel but sharper debate on how quickly benefits will reach households and how reforms are implemented.

Simone Rossi, CEO of EDF in the UK commented: “Using electricity from wind, solar and nuclear to power our homes, transport and businesses is key to Britain’s energy security and household finances. But we can’t have a two-tier system where only homeowners with a driveway and large roof can access the savings electricity can offer.

“We welcome Government’s focus on this. In addition, we welcome streamlining of planning and connection processes to bring down the cost of building the infrastructure Britain needs.”

Rachel Solomon Williams Executive Director of the Aldersgate Group said: “Continued investment in clean power since the last energy crisis has helped shield the UK from the worst impacts of recent shocks.”

She added: “We support the government’s ambition for a rapid transition… measures to reform planning accelerate grid connections strengthen electrification and delink gas and electricity prices are all important steps forward.”

That support reflects a growing consensus that structural reform is needed. The marginal pricing model has tied electricity costs to gas markets even as renewables expand, leaving businesses and households vulnerable to geopolitical shocks.

But for consumer groups the immediate issue is affordability.

With bills expected to rise again from July there are warnings that long term reform will not be enough on its own.

Simon Francis, Coordinator of the End Fuel Poverty Coalition said: “Moves to delink the cost of gas from electricity bills can’t come soon enough.”

He added: “Households most exposed to that increase need support now not just long term structural change.”

That highlights a key challenge for ministers. While pricing reform and electrification could reduce costs over time there is a gap between policy ambition and short term relief particularly for vulnerable households and those off the gas grid.

There are also concerns about how the infrastructure needed to deliver the transition will be rolled out.

Plans to expand renewables across public land and speed up grid connections have been welcomed but questions remain over planning and local impact.

Roger Mortlock Chief Executive of CPRE said: “If we harness rooftops to generate solar energy we can accelerate the transition without placing more pressure on our countryside.”

He added: “Rushing through sweeping changes to planning risks letting developers bypass scrutiny and the loss of countryside.”

The tension between speed and consent is likely to grow as the UK looks to scale up clean energy infrastructure quickly while maintaining public support.

Campaigners focused on the wider energy system argue the reforms are long overdue. The volatility of fossil fuel markets has repeatedly fed through into UK bills reinforcing the case for change.

Angharad Hopkinson Political Campaigner at Greenpeace UK said: “Britain is sick and tired of an energy system where bills go up and down based on global events.”

She added: “The government is right to look at every possible solution to cut dependence on volatile fossil fuels.”

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