BEAMA responds to BEIS ofgem consultation  - flexible and responsive retail markets

16 Sep 2019

Is this providing the clarity our sector needs for the net-zero transition?   

Today BEAMA has responded to the BEIS Ofgem Consultation on Flexible Responsive Retail Markets. Feedback from our members indicate the current proposals set out in this consultation are not indicative of creating the market clarity needed to drive investment at the level needed to meet net-zero by 2050. 

Overall BEAMA is disappointed to see BEIS and Ofgem suggest that the key aspects of the current regulatory system will remain unchanged in the medium term and that more radical change to the regulatory framework will be deferred for a longer-term reform of the market. As an industry we have been discussing the need for regulatory reform with BEIS and Ofgem for a number of years now, and we believe it is commonly recognised the regulatory framework that exists today is not suitable for a future DSR and flexibility market.

We believe retail reform is essential to help drive delivery of the net-zero 2050 target.  Ofgem and all regulators need to have legal responsibility to uphold the requirements of this target in the regulatory system,  only then can long-term trajectories be set for the market and the ambition level of regulatory reform be elevated. 

Companies are unlikely to invest in innovations that at the moment won’t be commercially viable under the existing regulatory framework. We therefore believe moving to the modular approach outlined in this consultation will help drive more R&D investment into the UK. Action to deliver this needs to be brought forward.

As set out in the BEAMA net-zero by design report the current investment landscape for our sector is wavering,  specifically for products essential to delivering the net-zero target (e.g. heat pumps,  storage).  Our members have called for urgent action in order to set long term regulatory certainty for the market that will drive our transition to net-zero.  We therefore call for the proposed modular approach to  regulating energy services to be brought forward as this will ensure innovation in market services over time.

Key actions are therefore necessary as next steps: 

  • Complete GB smart meter rollout
  • Bring forward the modular approach to regulating energy services 
  • Outline this in a clear long-term market framework alongside a trajectory for energy prices and the introduction of a carbon price for heat
  • Ensure Ofgem has legal responsibility to uphold the net-zero target 

Download the BEAMA response here

Read our net-zero by design report here.