REA welcomes Energy and Climate Change Committee EMR Report

The REA provided both written and oral evidence to the report, which outlines the risk that the CfD and Capacity Market risk pursuing competing aims and the latter locking the UK into higher carbon sources of energy.

Commenting on the release of the Energy and Climate Change Committee (ECCC)'s report on EMR published today (4th March 2015) the REA welcomed the committee's conclusions and called for energy storage to be given the same priority in the Capacity Market as the committee calls for on Demand Side Response (DSR).


The REA provided both written and oral evidence to the report, which outlines the risk that the CfD and Capacity Market risk pursuing competing aims and the latter locking the UK into higher carbon sources of energy.

Other recommendations that the REA supports include:

- Engaging more with and considering the impact of EMR policy on smaller players in the market

- Providing greater visibility for investors and industry by clarifying the available funds in the LCF beyond 2020/21 and the frequency of allocation rounds. The REA believe a minimum of two allocation rounds per year are essential to minimise risks to industry

- Re-examining National Grid's role regarding potential conflicts of interest regarding developing new interconnector projects, which will now be eligible for CM support, and their role as Delivery Body for EMR policy

The REA's Chief Executive, Dr Nina Skorupska, said:

"I am encouraged the committee share the concerns I highlighted at the hearing regarding CfD policy and the Capacity Market. The Capacity Market is only designed to deliver one aim of Government energy policy: capacity, whereas value for money and emissions are not a consideration.

This is in contrast to renewables procured through CfDs, which can deliver significant extra low carbon capacity, with value for money as one of the scheme's key aims.

We echo the committee's concluding statement that the overarching message to Government that industry needs a stable policy framework in the coming years and clarity on Levy Control Framework funding."

Large scale power policy analyst Frank Gordon, commented:

"The Committee identifies DSR as a missed opportunity for the Capacity Market and we believe that energy storage can provide similar benefits for the country while avoiding network reinforcement costs and therefore should also be given an enlarged role in future Capacity Market policy.

The review of CfD and CM policy DECC is currently undertaking is welcome and we hope all stakeholders' views will be taken into account and meaningful changes made."

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