The GB energy sector has changed significantly over the last 20 years. A market structure based on competition in generation and supply has evolved to one that is also rapidly delivering Government decarbonisation targets. Over time, not only has the number of generators and suppliers grown, but so has the number of industry administration organisations needed to support market and policy activities. There are now some 30 bodies involved in these activities, with costs of over £500 million pa1. Around half of these are involved in policy delivery for DECC. These policy delivery bodies include, for example, the Environment Agency, Ofgem E-Serve and the Low Carbon Contracts Company (LCCC), administering payments from Government schemes running into billions of pounds.
When policy delivery administration is performed by so many bodies, it can result in additional cost and complexity. This raises the question of whether the delivery of energy policy administration in GB can be streamlined, and whether alternative delivery models may be applicable.
This independent report considers the most appropriate way in which these services might be delivered in the future. The report examines in particular:
- The reasons why government policy may be better delivered by the private or public sector;
- Examples of situations where reform to provision has been applied; and
- How such private or public solutions might be applied to energy administration activities.
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