The CBI responds to the Review of Electricity Market Arrangements consultation, which kick-starts reforms that will enable a low carbon electricity system.
Overview of the Review of Electricity Market Arrangements
The business community welcomed the publication of the British Energy Security Strategy in April 2022 which set a bold ambition for key low carbon technologies and the intention to undertake market reform to deliver a net zero electricity system by 2035.
The Review of Electricity Market Arrangements, or REMA, aims to establish enduring market arrangements that can deliver a high renewable, low carbon electricity system in a cost-efficient way.
The UK government have set a legally binding target to achieve net zero by 2050, underpinning this target is the delivery of a resilient and affordable net zero electricity system by 2035. The energy transition will require a once-in-a-generation change, a shift from a high carbon, dispatchable system to an increasingly low carbon system. Delivering a secure, cost-effective transition will require significant volumes of private investment in infrastructure at pace and scale over the next decade.
The UK has previously undertaken significant changes through the Energy Market Reform (EMR). EMR was developed with care over several years, successfully delivering mechanisms that have shaped the current energy market, including the Contract for Difference and Capacity Market. Through REMA, the UK has an opportunity to build on previous successes and carefully develop an enduring electricity market. Business welcomes the opportunity to support government throughout the REMA process and ensure that there is due consideration of the impact of changes on ongoing and future investments, as well the interactions with the wider energy system.
Why electricity market reform is important for your business
The current energy cost crisis has uncovered vulnerabilities across the energy system and increased the urgency to accelerate the energy transition. Building a resilient, secure electricity system will reduce the UK’s reliance on fossil-fuel derived generation, reducing the UK’s exposure to volatile wholesale gas prices. A low carbon system built from homegrown g
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