Present Market Arrangements for electricity are unsuited to a rapid and cost effective transition to a Net Zero energy system.
"The current market arrangements are not working and that they continue to reward fossil fuel consumption and disadvantage renewable production. The current marginal cost based approach to pricing is based on the physics of 20th century generation technology, where increasing output is associated with increasing cost.
Fixing these issues requires a comprehensive review of all the market mechanisms and a review in parallel of arrangements for gas and hydrogen storage are much needed.
We are concerned that the ownership of the electricity and gas network is not included in the review.
We also believe the effective price cap introduced until the next election should be maintained.
We also believe that the price of energy in the producer parts of the country, particularly Scotland, should be lower to reflect them being closer to low cost units of production and to reflect the lower use of transmission infrastructure."