Greg Clark looks to the energy market future

Print this page Email a link to this page
twitterlinkedintwitterlinkedin

Greg Clark, Minister for Business, Energy and Industrial Strategy (BEIS) has claimed that the
energy ‘trilemma’ policy conundrum of providing electricity that is ‘green’, cheap and secure, is coming to an end.

As electricity generated from renewable sources becomes cheaper, Clark has aired his views in a
speech that reflected on Professor Dieter Helm’s 2017 report – the ‘Cost of Energy’.

Energy auctions

On firm power auctions, Clark agrees with the idea of Ministers setting the overall goal,
businesses making offers to deliver low carbon electricity and the government’s designated experts
securing supplies appropriately for consumers. Clark goes on to suggest the simplification in
market mechanisms he has in mind will be progressive, not instant, and involve a gradual transition
to a more integrated market.

Regarding independent system operator and network regulation, Clark believes greater independence
between operator and regulation is the “right long-term approach”. He suggests regulation must be
agile and responsive to be able to maximise the opportunities created by the move to a smarter,
digital economy.

Greg Clark, Minister for Business, Energy and Industrial Strategy (BEIS) has claimed that the
energy ‘trilemma’ policy conundrum of providing electricity that is ‘green’, cheap and secure, is coming to an end.

As electricity generated from renewable sources becomes cheaper, Clark has aired his views in a
speech that reflected on Professor Dieter Helm’s 2017 report – the ‘Cost of Energy’.

Energy auctions

On firm power auctions, Clark agrees with the idea of Ministers setting the overall goal,
businesses making offers to deliver low carbon electricity and the government’s designated experts
securing supplies appropriately for consumers. Clark goes on to suggest the simplification in
market mechanisms he has in mind will be progressive, not instant, and involve a gradual transition
to a more integrated market.

Regarding independent system operator and network regulation, Clark believes greater independence
between operator and regulation is the “right long-term approach”. He suggests regulation must be
agile and responsive to be able to maximise the opportunities created by the move to a smarter,
digital economy.

4 for the future

Finishing up Clark outlined four key principles for the power sector for further ongoing
discussion.:

  1.  The market principle – we must wherever possible use market mechanisms that take full
    advantage of innovation and competition.
  2.  The insurance principle – given intrinsic uncertainty about the future, government must
    be prepared to intervene to provide insurance and preserve optionality.
  3.  The agility principle – energy regulation must be agile and responsive if it is to reap
    the great opportunities of the smart, digital economy, and finally.
  4.  The “no free-riding principle”: consumers of all types should pay a fair share of system
    costs.

Energy expert view

“Great news about the energy ‘trilemma’ if it proves to be the case, but achieving a fairer
distribution of system costs to consumers may prove challenging and does need attention.” Alastair
Fells MEI, Incorporated Eng, PG Dip Fuel Tech, BSc Hons

To find out how our energy law specialists can help your business, please contact Andrew Davisonon 0191 211 7950 or to read more click here.