Go greener, SDC tells Ofgem

Reducing greenhouse gas emissions should be made a central part of energy regulator Ofgem’s responsibilities, says the Sustainable Development Commission.

In its new report Lost in Transmission?, the commission, the independent government watchdog for sustainable development, said Ofgem had huge potential to help reshape the UK energy system for a sustainable future.

It said the government should make a reduction in UK carbon emissions through electricity generation, transmission, distribution and use central to Ofgem’s remit to meet the needs of future consumers.

Bernie Bulkin, commissioner of energy at the SDC, said: “We’d like to see Ofgem's primary duty changed so that its central focus is on creating a sustainable system which costs as little as possible, rather than making a low-cost system as sustainable as possible.”

The report, subtitled “The role of Ofgem in a changing climate”, published on 19 September, highlights some of the key ways Ofgem’s role could be changed.

The commission’s recommendations include:

• bringing energy and environmental policy together under one secretary of state
• changing Ofgem’s primary duty to reflect the compelling need to move to a decarbonised energy system
• providing consumers with better information through smart metering and billing to increase awareness of energy consumption
• changing the current market arrangements to make it easier for smaller, low-carbon generators and suppliers to compete in the markets
• introducing a greenhouse gas incentive package into the Price Control Reviews for the distribution and transmission networks to reduce losses and facilitate the connection of low carbon generation
• rethinking heat provision to move to low-carbon networks across towns and cities

The Renewable Energy Association (REA) welcomed the SDC’s proposals to amend Ofgem’s remit.

Philip Wolfe, chief executive of the REA, said: “Ofgem’s remit is controlled by government. If this remit is in conflict with achieving environmental targets, clearly the government must change it.”

Wolfe said the government’s reaction to the report would be a “critical test” of its commitment to tackling climate change and renewables, given that the first draft of the EU Renewable Energy Directive was due before the end of the year.