A Government consultation to reform the energy market will be ‘music to the ears’ of electric vehicle (EV) drivers, according to LeasePlan.
The Review of Electricity Market Arrangements (REMA) will seek views on a wide range of options to address the combined challenges of responding to higher global energy costs, the need to further boost energy security and move the UK to a cleaner energy system.
Some of the changes being consulted on include, introducing incentives for consumers to draw energy from the grid at cheaper rates when demand is low or it’s particularly sunny and windy, saving households money with cheaper rates.
Furthermore, it will look at reforming the capacity market so that it increases the participation of low carbon flexibility technologies, such as electricity storage, that enable a cleaner, lower cost system; and de-coupling costly global fossil fuel prices from electricity produced by cheaper renewables; a step to help ensure consumers are seeing cheaper prices as a result of lower-cost clean energy sources.
Under the current system, gas prices often end up setting the wholesale electricity price, because it is often the last source of supply to meet demand.
The ever-increasing participation of renewables in the system means over time, cheaper electricity produced by renewables energy will determine the price more often.
The consultation will explore ways of updating this pricing system to further reflect the rise in cheaper renewable.
Matthew Walters, head of consultancy services at LeasePlan UK: “The Government’s proposed plans will be music to the ears of many EV drivers and EV fleets, who will greatly benefit from the introduction of off-peak electrify incentives.
“Of course, there’s always going to be the question around how this works in practice. However, we’ve seen already seen just how quickly EV drivers can adapt their habits and routines to ensure they’re getting the most out of their vehicles.”
Walters believes off-peak charging will simply become second nature. “Companies will also look to build this into their business models where possible, particularly those with more flexible charging schedules,” he added.
“By reforming the UK’s energy market, we’ll see much more strategic usage across the country, which will not only help alleviate the pressure on the grid, but increase saving for businesses and individuals.”
The consultation forms part of the Government’s review of the electricity market, first announced in the British Energy Security Strategy (BESS).
The BESS raised ambitions for building low carbon and cheaper-to-run technologies such as offshore wind, solar and nuclear, as part of UK plans to deliver a clean and secure electricity system by 2035.
The UK is already making huge progress in accelerating the delivery of cheaper, home-grown renewable energy.
Earlier this month, the UK secured a record capacity of almost 11GW of clean energy at record low prices, through the Government’s renewables scheme - almost double the capacity achieved in the previous round, and enough to power around 12 million British homes.
With electricity demand set to at least double over the next 13 years, REMA will focus on establishing a fit-for-purpose market design, identifying and implementing the reforms needed to GB electricity markets that work for businesses, industry, and households.
This includes consulting on both the continued evolution and expansion of existing schemes, such as the Capacity Market and Contracts for Difference, and the introduction of more fundamental change where needed to guarantee uninterrupted supply during periods of no wind or sun at the lowest cost possible for consumers.
Business and energy secretary Kwasi Kwarteng said: “We’ve just seen the price of offshore UK wind power fall to an all-time low and gas is a shrinking portion of our electricity generating mix, so we need to explore ways of ensuring the electricity market is adapting to the times.
“That includes ensuring the cost benefits of our increasing supply of cheaper energy trickle down to consumers, but also that our system is fit for the future – especially with electricity demand set to double by 2035.
“In what could be the biggest electricity market shake up in decades, I am confident that this review will significantly enhance GB’s energy security and supply for generations to come.”
The consultation closes at 11.45pm on October 10, 2022.
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Gareth has more than 20 years’ experience as a journalist having started his career in local newspapers in the 1990s. Prior to joining Fleet News in 2008, he worked in the public sector as a media advisor and is currently news editor at Fleet News.
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