United Kingdom

United Kingdom

Regulator's new responsibility

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Environmental responsibilities are to be given a higher priority by Britain's energy regulatory office, OFGEM, with the launch of initial proposals for an Environmental Action Plan. It is the first time environmental issues have been dealt with by the Office of Gas and Electricity Markets.

OFGEM claims that increased emphasis on environmental and social issues is the first of its priority projects for 2000/01. This change of focus reflects the new set of objectives for OFGEM under the recently passed Utilities Act. It will have responsibility for administering the percentage obligation for renewables (the minimum standard for their contribution to the national supply portfolio), promoting trade of green power certificates and power station emissions, administering the Climate Change Levy, promoting energy efficiency, and working on the design of new electricity trading arrangements (NETA).

Environmental considerations in the past have tended to lag far behind the regulatory imperative to keep down costs to the consumer. While the initiative is welcome, its proposed actions hold out little promise of any of the wind lobby's desired changes. OFGEM proposes continuing to investigate potential barriers to electricity from renewables, CHP and embedded (distributed) sources; considering quickly how to act on recommendations of the Embedded Generation Working Group; continuing to monitor the impact of NETA on renewables; and introducing transparent billing to make customers aware of any extra charges for energy efficiency and energy generated from renewable sources.

Callum McCarthy, director general for gas and electricity, says: "This consultation attempts to identify clearly what OFGEM can and should do and, equally important, which environmental issues are more properly dealt with by other parts of government." He adds that environmental issues often involve balancing different priorities between social, economic and environment objectives requiring difficult judgements. Many of these judgements are the responsibility of government rather than OFGEM.

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