Government launches consultation to assist renewables

Industry and Energy Minister Brian Wilson has announced a government consultation on measures to help smaller power generators operate under the New Electricity Trading Arrangements (NETA).

The launch of the consultation on 1 November comes days after Wilson has admitted in Parliament that NETA  are hampering suppliers of renewable energy by resulting in lower prices being paid to them, and announced a forthcoming consultation to address the concerns of small generators.

The consultation forms the Government’s response to the energy market regulator, Ofgem’s report, reviewing NETA’s first three months, which found that renewable electricity is likely to require additional Government support if current environmental targets and wider environmental objectives are to be met. The deadline for responses to the consultation is 1 December.

The Government’s key proposals for NETA are to ensure imbalance prices are genuinely cost reflective, especially reducing the risk for smaller and unpredictable generators, and also to make sure that effective consolidation services emerge, therefore further reducing the risks for smaller generators. The Government has proposed a working group to look urgently at obstacles to market driven consolidation, including the possible need for encouraging consolidation.

“NETA has been a big success,” Wilson said, launching the consultation. “Under the old Pool arrangements, prices were kept artificially high. The introduction of a more transparent, inclusive and efficient pricing system has meant that wholesale electricity prices are up to 25% lower. But we must act to address the issues faced by smaller generators under NETA. The Government remains strongly committed to renewable and combined heat and power generation in particular.”

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