Utility Week

UTILITY WEEK | JUNE 2022 | 19 Energy Bill timescales for such projects, would require primary legislation, says Whitehead. Other measures that may require legisla- tion are provisions to create Contract for Dif- ference allocation rounds for green hydrogen and amendments to the licensing regimes to develop long duration storage, he adds. Market reform absent The Labour MP is also concerned that reform of current wholesale market arrangements, which was also trailed in the security strat- egy, is missing from the bill "There's no sign of that happening at the moment and, that's going to be pretty impor- tant to get us o- gas," he says. Jess Ralston, senior analyst at the Energy and Climate Intelligence Unit, expresses sur- prise that there were no references to elec- tricity market reform in the Queen's Speech. "We thought that electricity markets might be a major focus of the Energy Bill," she says. Moving away from the current system, whereby the marginal cost of gas sets the wholesale price of electricity because it tends to the most ‹ exible source of supply, is key, she says: "We need to change aspects of it [the wholesale market] to make it more suit- able for renewables. "There needs to be a step change so that consumers can access the full bene' ts of renewables. It's one of the steps that needs to happen for us to be able to make most of the renewables out there." Sarah Honan, ‹ exibility policy o" cer at the Association of Decentralised Energy, is more relaxed about the omission of whole- sale market reform from the bill. She says Ofgem has started work on the Review of Electricity Market Arrangements, which was unveiled in the Energy Security Strategy, and is already engaging with stake- holders on the exercise. The chief step forward in the bill in terms of this wider market reform is the inclusion of measures to set up a Future System Opera- tor (FSO), which Honan describes as a "mas- sive step forward". She says: "The FSO will be very important in bringing about a system that can deal with the level of low-carbon ‹ exibility we need, which basically means lots of small assets working across the system on the demand side, as opposed to the energy genera- tion side, to help keep the system safe and secure as long as we move to intermittent renewables." However, Ralston worries that the bill, like the security strategy, shows the gov- ernment risks being distracted by "costly" options like nuclear and hydrogen, which will take years to deliver secure supplies. Instead it could be using this time to focus on steps that will give more immediate help on energy bills. Pointing to the bill's support for hydro- gen heat trials and business model, she says: "It's attractive for government because it's big, shiny infrastructure but it's just not real- istic to think that we're going to have hydro- gen and heating at any point in the near future. "Particularly at the moment, what the public wants to see is help with their energy bills and immediate steps that will help them within the next few months, not things that might help in ' ve or ten years' time." What about energy e ciency? This points to what many see once again as the biggest missing element in the bill: energy e" ciency. While heat pumps received a ' llip through the legislation via provision for a new market standard for the technology, energy e" ciency was "completely missing", says Honan. Chancellor Rishi Sunak has copped most of the ‹ ak on energy e" ciency by not bringing forward cash to support the roll- out of such measures in his recent Spring Statement. But Stuart Dossett, senior pol- icy adviser at the Green Alliance, points to absent legislative steps in the Energy Bill, like the future homes standard that will require new homes to be zero emission but only from 2025. He says: "The ' rst thing that could be done on energy e" ciency is bringing forward the future homes standard so that it comes into force as soon as possible to avoid addi- tional housing stock being built that's going to require costly retro' t." The government should also increase its target for the number of homes achieving the Energy Performance Certi' cate Band C by 2035. Improving from Band D to Band C cuts the typical household's gas consumption by 20%, he says. "Insulating homes is the sim- plest route to reducing our reliance on natu- ral gas markets that are pushing up costs for consumers." These ' rm, legally binding targets would be a "huge step forward", says Ralston, who points out there is "absolutely no mention" of energy e" ciency in the whole Queen's Speech document. In fact the only reference to insulation are measures to crack down on the Insulate Britain protest group. She says: "They're just completely miss- ing the main point of insulation, which is to reduce the demand in the ' rst place." David Blackman, policy correspondent "They're just completely missing the main point of insulation, which is to reduce the demand in the fi rst place." Jess Ralston, senior analyst,Energy and Climate Intelligence Unit "The fi rst thing that could be done on energy effi ciency is bringing forward the future homes standard so that it comes into force as soon aspossible." Stuart Dossett, senior policy adviser, Green Alliance "A lot of those [commitments] need primary legislation to bring them through and they're largely absent from what we can see in the headlines of thebill." Alan Whitehead MP, Labour shadow energy minister

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