The Business and Enterprise Committee, comprising 11 MPs from around the country, has released its latest report, Energy Policy – Future Challenges.
The report has taken a hard-line on potentially inept practices by energy suppliers and has urged the market regulator Ofgem to take action to protect businesses and private consumers.
This will be the last time the BEC reports on energy related affairs; from January 2009 the area will fall under the jurisdiction of the recently created Energy and Climate Change Committee.
The following points were highlighted by the Committee as suggested principal concerns:
• The need for intervention to ensure rapid investment in gas storage;
• The likelihood of timely investment in new electricity generating capacity and network
• Interventions to improve liquidity in the wholesale gas and electricity markets;
• The development of new initiatives to promote small and large-scale renewables;
• The Government’s framework for managing its current nuclear liabilities and those arising from new nuclear build;
• Implementation of Ofgem’s supply probe recommendations to ensure domestic and
small business customers are treated fairly;
• The Government’s future strategy on fuel poverty; and
• The effectiveness of the current energy market regulatory framework.
The report was welcomed by trade organisations. Roger Salomone, Energy adviser for EEF, The Manufacturer’s Organisation, said:
“This is a damning report on energy market policy for which the Committee should be applauded. It is now essential that the regulator takes responsibility and acts quickly to address the market failures which are hurting consumers and undermining the competitiveness of UK industry.
“If it fails to do so, then its ability to protect consumers should be the subject of an urgent review as this is too important an issue to be left idling.”
EEF’s release said they held particular affinity with the Committee’s recommendations on gas storage, market liquidity, and new electricity generation capacity.
The report praised Ofgem’s adoption of many of the directives that BEC had suggested in one of its previous reports. However, “We hope that in 2009 and onwards, the new Energy and Climate Change Committee will not have to take the lead in setting the regulator’s (Ofgem’s) agenda as we have found ourselves doing on too many occasions,” it said.
BEC also urged the government to review Ofgem’s role and ensure that it has the necessary power to properly regulate the market.
The report is available in PDF form here.