Scottish Renewables and Renewable UK response to Ofgem's SCR on Electricity Balancing
24 October 2012
On 24 October 2012, Scottish Renewables and Renewables UK jointly responded to Ofgem's SCR on Electricity Balancing. Renewable UK and ScottishRenewables felt that the consultation paper helpfully set out a wide range of ideas for improvements in energy balancing, and acknowledges many interlinkages - which we welcome. However, we have a number of practical concerns over the proposed approach:
- There is a need for a timeline for the future development of any proposals on energy balancing, identifying more clearly and with evidence the upcoming challenges and changes to the whole energy market, and the points at which intervention is required.
- The required evidence would include a demonstration of significant increases in the amount of energy subject to cash-out, which we have not seen to date; and explanations from the System Operator as to why the tools and incentives currently at its disposal are insufficient.
- In the event that the need for intervention is identified, a more measured process is appropriate, whereby initial thinking is developed with industry engagement, rather than jumping straight to a “draft policy decision” and impact assessment.
- In order to be able to input into negotiations on the European Target Model, it is appropriate for Ofgem to consider stakeholder responses to the current consultation, but this does not mean making hasty policy decisions.
- In the meantime, there is scope for the development of softer measures to facilitate energy balancing, for instance: better wind forecasting and information provision.
- A separate, centrally balanced market for renewables, maintaining some incentive for individual windfarms to be in balance, has its merits, but the market for commercial aggregation should be explored first, encouraged, and monitored in the context of the introduction of EMR policies.
If you have any questions, please contact:
Senior Policy Manager: Grid & Markets
0141 353 4000