Combined Heat & Power, District Heating & Cooling, Demand Side Services, Energy Efficiency

ADE: ‘Electricity market reform must support expansion of decentralised energy technologies’

8 April 2022

The Association for Decentralised Energy (ADE) welcomes the Prime Minister’s announcement that the Government will undertake a comprehensive Review of Electricity Market Arrangements (REMA). 

It is becoming increasingly clear that the UK’s current electricity markets cannot get the country to net zero. They cannot support the vast expansion of renewable electricity generation that is needed and they can’t bring forward the necessary levels of flexibility to help balance the accounts and arrive at the most cost-effective, zero carbon system.  

This review is a once in a generation opportunity to build a system that truly works for users and the planet. Whilst there will be difficult compromises to be made going forward, it is crucial that users and their contribution to the system are placed at the heart of these reforms.  

The UK should emerge from them with users, from households to industry, being able to provide flexibility to balance peaks and troughs in wind and solar generation, and be fairly remunerated for doing so. More than that, the system should drive towards efficiency at all levels – whether it be individuals reducing their own consumption or businesses investing in primary energy. Finally, as the nation decarbonises its heating, these reforms should ensure that households and businesses can make the right choice to electrify their heating, either through individual heat pumps or collective heat network systems.  

Lily Frencham, CEO of the ADE, said:

It’s time to design an energy system fit for the future – the upcoming review of how the electricity market is run is the chance to make sure this happens. The Government has just announced it would create a new Future System Operator (FSO) to oversee the UK energy system, we are happy to see this and look forward to seeing a stronger coordinating role across gas, electricity, heat networks and hydrogen networks.  

Now we want to see reforms actively support and accelerate the deployment of decentralised energy technologies, with a particular focus on flexibility to build a resilient, modern grid, and energy efficiency to reduce long-term energy demand. We look forward to working with Government to help shape the direction of future travel in this space.

Notes to editors: 

About Flexibility 

Flexibility is used to balance supply and demand across the energy system. It can include, for example, energy users responding to a signal to turn down their demand which helps balance supply and demand without the need for additional generation (e.g. power stations). Energy users can also be asked to use excess energy from the grid, for example on a windy day. 

About Energy Efficiency 

Energy efficiency in buildings reduces demand for the heating and power of the indoor space through a combination of measures, such as insulation, draught proofing, and LED lighting. The cheapest, safest and most secure form of energy is the energy we do not use. That is why energy efficiency must be allowed to compete on equal terms with new supply capacity. Energy efficiency means the construction of fewer new generating plants and reduced network infrastructure investment combined with greater resilience and lower carbon emissions.  

About the ADE 

The Association for Decentralised Energy (ADE) is the leading trade association for decentralised energy, representing more than 150 interested parties from across the industrial, commercial and public sectors. We engage with government and key decision makers to advocate for decentralised energy. We provide a conduit between the sector and government, providing members with insight into policy developments and government with insight based on our members’ experience. 

For further information please contact: 

Jonny Bairstow 

Head of External Affairs 

Association for Decentralised Energy 

Tel: +44 (0) 7305 049584 

[email protected] 

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