August 2009 meeting discusses the low carbon transition plan and market liquidity

Following the publication of the Government’s low carbon transition plan much of the August Energy Supplier Forum meeting was taken up with discussions on the raft of proposed policies to move the economy towards the 2020 targets.

Of particular interest was the fundamental changes to the operation of the RO which, if implemented, would effectively transform the mechanism into a type of variable feed-in tariff through the introduction of a headroom-only target. The proposals for the introduction of feed-in tariffs and the renewable heat incentive, although welcome in principle, caused some debate over the indicated costs and what impacts these market interventions (along with other mooted obligations, such as the CCS levy) would have on competition over the next decade.

Other areas of discussion included:

• the publication by Ofgem of two further consultations related to the code governance review;
• the ongoing transmission access review and action DECC may take following the announcement the department would intervene to resolve the issues;
• electricity wholesale market liquidity and potential solutions to improve the situation;
• BSC Panel update; and
• the audit of supplier compliance with the complaint handling standards.

The next meeting of the forum will be held on 1 September. For queries and comments, please contact us.