Push for clear grandfathering rules in government’s electricity market review

By Staff
2 Min Read

Energy UK has expressed its support for the government‘s consultation on the Review of Electricity Market Arrangements (REMA), emphasising the importance of clarity for existing investments and the need for robust carbon pricing to drive decarbonisation efforts.

Members of Energy UK believe that full grandfathering is crucial for existing assets, such as Contracts for Difference (CfDs), Capacity Market (CM) agreements and Corporate Power Purchase Agreements (CPPAs), where investment decisions were based on national pricing and lacked certainty regarding future reforms.

They urge the government to promptly clarify the grandfathering process to maintain investor confidence, especially in potential zonal pricing arrangements.

Energy UK highlights the risks associated with uncertainty and emphasises the importance of detailed consultation and analysis to inform decision-making and mitigate adverse effects on future investments.

Additionally, Energy UK underscores the significance of carbon pricing in electricity market reform, advocating for stronger UK Emissions Trading Scheme (ETS) prices to incentivise investment in low carbon generation and reduce reliance on support mechanisms like the Capacity Market.

The trade association calls on the government to advance policies to strengthen the UK’s carbon price and to work towards linking the UK ETS with the EU ETS to align economic incentives with decarbonisation goals.

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