Big Six energy firm's dominance to be broken
Ideas including smashing the dominance of the Big Six energy providers and radically reforming power subsidies have been put forward.
The plans, launched this morning (May 16), are in the latest report by the Energy and Climate Change Committee and are the conclusion of months of questioning of ministers, NGOs and industry figures.
Its report calls for 'fundamental' reform of the wholesale energy market to 'break up' the dominance of the Big Six energy companies.
The committee, chaired by Tim yeo MP, believe this overall will encourage new business to invest in the UK and improve the 'liquidity' of the market.
In its Electricity Market Reform report the committee also look at the future of the Feed-In Tariffs (FITs), which are currently being reviewed by the Government.
According to the report Government proposals for Electricity Market Reform (EMR) are supposed to 'encourage' power companies to deliver clean affordable energy, even when there are more inflexible and intermittent sources of electricity in the mix.
However, the committee is concerned the current EMR proposals are 'over-complex' and could fail to attract the estimated £110 billion investment needed in the electricity generation alone by 2020.
The committee demands the Government simplify its package of reforms to provide a more certain framework for investors.
The starting point for EMR should be a clearly defined objective to reduce the carbon intensity of electricity generation in the UK to 50g of CO2 per kilowatt hour (KWh) by 2030.
The Chair of the Committee, Tim Yeo MP, said: "The Government must go back to the drawing board and come up with a more straightforward and coherent set of plans to reform the electricity market."
"Radical reform of the wholesale energy market is needed to stop the Big Six from stitching it up, but at the moment Ministers are only tinkering at the margins.
"Cleaning up our power sector will cost money, but the long term benefits for the UK of having a secure, reliable and low-carbon electricity system are clear.
"In the short to medium term bills will rise, but in the long term people will see savings--ministers should be open about that."