Review of Market Arrangements: Second Consultation

Consultation Response

Credits — Gordon Morgan

Overview

A response to the second consultation on the UK Government’s Review of Electricity Market Arrangements (REMA).

Common Weal welcomes the further consultation on Reform of Electricity Market Arrangements (REMA) and in particular the focus on what changes are necessary as electricity becomes de-carbonised.

The policy options paper and its counterfactual scenario sets out fairly well the problems with the current system, amongst which are that high gas prices set the marginal rate of the whole market leading to high consumer energy costs and endangering energy security. Changing this requires rapid decarbonisation and investment in the grid in addition to altered market arrangements.

Common Weal is deeply concerned that the government’s legal obligations to meet its 2025 and 2050 decarbonisation targets are not being sufficiently addressed as evidenced by the High Court judgement of 3rd May 2024 (High Court rules Tory net zero plan unlawful – again – Good Law Project). The background to these failures were set out in our preamble to our response to the the REMA 1 consultation (Review Of Electricity Market Arrangements – Common Weal ).

We are pleased that some of our suggestions have been adopted by the Government e.g allowing onshore windfarms in England. Others such as the public ownership of the electricity and gas networks have not been advanced as yet.

We have answered only those questions for which we have strong views.