Brussels thumbs up for UK electricity reforms

Government reforms aimed at ensuring the security of UK electricity supplies have been given the seal of approval by the European Commission (EC).

Commissioners concluded that the proposed UK Capacity Market, part of the government’s electricity market reform programme, is in line with EU state aid rules.

The Capacity Market includes the Contracts for Difference scheme, a mechanism for providing long-term price certainty for low-carbon electricity generation.

Energy and Climate Change Secretary Ed Davey said: “This is great news, and shows that our major reforms to the electricity markets are urgent and needed to turn around the historic neglect of the sector.

“We are the world leader in investment for low-carbon energy and energy security. The average annual investment in renewables has doubled since 2010 – with a record-breaking £8 billion worth in 2013. And we’ll continue to lead in building a low-carbon electricity sector based on homegrown energy sources, reducing our reliance on polluting fuels and volatile energy markets at the lowest possible cost to consumers.”

Joaquín Almunia, Commission vice-president in charge of competition policy, said: “The UK Capacity Market embraces the principles of technology neutrality and competitive bidding to ensure generation adequacy at the lowest possible cost for consumers, in line with EU state aid rules.”