The Department of Energy and Climate Change (Decc) has committed to making energy policy changes more predictable and will set out its intentions a year in advance.
The move, which will be welcomed by investors, comes as the government published findings of its red tape review into the energy sector.
It promises better market signals and engagement around energy policy changes, and to better define the respective roles of Decc and Ofgem. However, the drive towards a single energy tax and reporting framework for businesses, replacing the current ‘alphabet soup’ of energy taxes, will not be completed until Spring.
Among a raft of pledges to simplify reporting requirements for energy suppliers and project developers, and to give them more clear guidance and support, Decc has also committed to consulting on rule changes for energy storage in spring.
Currently, energy storage is classified as generation, meaning energy networks are not permitted to own and operate energy storage assets. Meanwhile, larger storage assets can face duplicate costs under the current market set up.
As well, the government has promised to make it easier for smaller suppliers to enter the market – noting that local authorities may benefit from a less onerous type of supply licence. It touts Ofgem’s brainchild, ‘Licence Lite’, as the way forward, although so far, only the Greater London Authority has taken the Licence Lite route. It has been inching toward becoming an energy supplier for the last five years.
Other local authorities such as Bristol and Nottingham have since launched using ‘supplier in a box’ type solutions, which many feel have overtaken the more burdensome Licence Lite approach.
See the full Red Tape Review document here.