Decarbonisation progress slowing, Ofgem report shows
Ofgem has launched its annual State of the Market report, which shows that the UK continues to be a global leader in cutting greenhouse gas emissions, although progress is slowing.
4th October 2019 by Networks
Greenhouse gas emissions have fallen by 42% since 1990, more than any other large advanced economy, due largely to the decarbonisation of electricity generation. This has been driven by Government policies, such as the carbon price which penalises coal plants in particular, and the huge growth in wind and solar power. In fact, renewables generated a record 33% of our electricity last year.
Progress is slowing however, with last year seeing the smallest reduction in emissions since 2012 (2.5% this year, down from a 3% fall the previous year).
Transport continued to be the largest single source of carbon emissions, although emissions fell slightly last year (3%), partly down to an increase in the number of alternative fuel vehicles, which now account for 2% of the licenced cars on the road in GB.
In June, the Government passed legislation requiring the UK to reduce carbon emissions to net zero by 2050 following calls from the Committee on Climate Change (CCC). To meet this target, significant investment is required, particularly in renewables, as well as policies aiding the roll-out of new low carbon technologies and supporting innovation to decarbonise how we heat our homes and businesses.
A priority of Ofgem’s new corporate strategy is helping decarbonise the economy at the lowest cost to consumers. Ofgem will set out more details on this early next year.
Separately, competition in Great Britain’s retail energy market continued to develop in 2018-19. Medium suppliers benefited the most from record switching rates (just over 20% in June 2019, up from 19% the previous year), which swelled their market share by 7 percentage points in electricity and 5 percentage points in gas to over 20% of consumers overall.
In January Ofgem implemented a cap on the price of default tariffs to protect consumers from overpaying for their energy.
The majority of customers on these deals are with the six larger suppliers who charged at the upper limit of the cap. In contrast, medium and small suppliers priced at £43 and £78 below the cap (January – June 2019).
Energy prices have a direct impact on the welfare of consumers, leading to rationing and even self-disconnection of energy by customers who cannot afford to pay their bills. Ofgem is publishing its updated Consumer Vulnerability Strategy this Autumn.
Joe Perkins, chief economist at Ofgem, said: “Ofgem’s latest state of the market report shows the progress made so far to decarbonise the economy but much more needs to be done.
“We want the UK to remain a global leader in bringing down greenhouse gas emissions, and our major objective is to help the country rise to the challenge of cutting emissions to net zero by 2050 at the lowest possible price to consumers.
“As well as protecting consumers in the future, our duty is also to protect those today. We will continue to enable competition and innovation which benefits consumers, whilst protecting those who need it, as we help build an energy market which works for all consumers.”
Login on register to comment
Cadent backs launch of major bio-CNG HGV refuelling station
Gas network’s £250,000 infrastructure investment ensures supplies to existing connected customers have not been impacted
Editor’s blog: The biggest tests of resilience are yet to come
Network content director Jane Gray reflects on the industry's coronavirus response to date and the challenges still to come.
From the front line: Chris Garside and Andy Simcoe, Northern Gas Networks
Key workers across the power and gas networks are playing a critical role in the national response to Coronavirus. Network has committed to profiling their stories.
Related supplier content
People & Skills
‘Learning by doing’ on the road to net zero [test product]
DSO director Andrew Roper discusses 'Learning by doing'
Load patterns and lockdown: how Covid-19 is impacting electricity networks
Insights into dynamics on the low voltage network as the outbreak unfolds
Protect electrical equipment from insulation failure
Insulation faults are a major cause leading to the eventual failure of electrical equipment. Partial discharge (PD) is a very reliable indicator of developing insulation faults. Regular PD testing allows users to detect and analyze PD activity