Government updates energy pricing reforms - but hard decisions deferred
Energy transition Policy & regulation
The Government’s latest delivery plan for Reformed National Pricing sets out the next stage of electricity market reform, but more decisions are needed to give the industry clarity, according to experts at LCP Delta.
While the plan rules out a change to a deemed Contract for Difference and signals progress on investment and siting levers, balancing reform and constraint management, many commitments are limited to further consultation.
It has been four years since the Government announced the Review of Electricity Market Arrangements (REMA), and so far, there have been limited concrete developments at a time when constraint costs and operational pressures on the system remain high. The Government spent a long time considering Locational Marginal Pricing until it was discounted as a proposal. And while the sector will welcome the update on the Government’s thinking on market reform, especially on the investment and siting levers and setting out the measures to help reduce constraint costs, this doesn’t provide any more certainty in how the system will operate in the 2030s.
