Beis seeks views on creating energy efficiency markets


Government is consulting on how to better incentivise energy efficiency and seeks input to inform market-based approaches.

It wants views on how current markets can be leveraged and how new markets might be created.

The consultation highlights key challenges around rewarding energy efficiency via current market approaches. The Capacity Market, for example, pays for generation or load reduction over winter to be ready to respond to a system stress event. It is not designed to reward permanent demand reduction.

National Grid’s ancillary services also tend to require specific short-term actions to help balance the system.

Similarly, distribution network operators are starting to procure alternatives to network reinforcement, but they are largely paying for services that can help manage constraints at specific locations at certain times of day.

Government asks how those flexibility-based markets might be used to facilitate energy efficiency, but also seeks views on new market models, and on potential benefits of combining energy efficiency with flexibility.

The consultation requests evidence on whether behaviour change should be rewarded in the same way as measures that require installation of equipment/investment.

See the consultation here.

Related stories:

How to balance the grid using energy efficiency as a tradable resource

Make energy efficiency a national infrastructure priority, say MPs

What’s stopping industry investing in energy efficiency, asks government

Government mulls energy efficiency auction scheme

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  1. Over the past ten years the government has run at least three public consultations , under various guises, on precisely this subject, It seems to have paid little or no attention to anything previously submitted. My suspicion is that, because three years ago, the Department of Energy and Climate Change was abolished, nobody in the civil service now has access to all that Department’s electronic files.


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