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United Kingdom

United Kingdom

New role for energy regulator

An independent government watchdog in Britain is calling for a new remit for energy regulator Ofgem that would make reducing greenhouse gases its prime focus. Today, Ofgem gives more weight to the affordability and availability of energy supplies than to sustainability, points out the Sustainable Development Commission (SDC).

In "Lost in Transmission -- The Role of Ofgem in a Changing Climate," SDC calls for an overhaul of energy market regulation in the UK to meet the challenges of climate change and renewables targets. "The potential for Ofgem to contribute to re-shaping the UK energy system for a sustainable future is huge," says Bernie Bulkin, the SDC's commissioner for energy. Ofgem's primary focus should be "on creating a sustainable system which costs as little as possible, rather than making a low cost system as sustainable as possible." The report notes that current electricity trading arrangements and use-of-network charges disadvantage renewables compared with other generation.

The SDC recommends introducing a package of incentives to reduce greenhouse gases into the process for approving new investment in the wires and changing market arrangements to make it easier for smaller low-carbon generators to compete. It also supports the British Wind Energy Association (BWEA) in its call for a "connect then manage" approach to getting wind power online, instead of waiting for grid upgrades (Windpower Monthly, February 2007). "If we are going to achieve our renewable energy targets on time then we need to see a cultural change at Ofgem," says BWEA's Maria McCaffery. "This report is right on track."

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