Energy industry trade group Energy UK has penned a letter to the UK prime minister Keir Starmer, urging the government to ensure reforms to energy industry regulations boost growth and productivity in the sector.
The letter, written in response to Starmer’s call for the UK’s main energy regulators to create ideas for reform that could boost economic growth, outlines five key areas to unlock growth through energy industry regulation.
Energy UK states that a new regulatory settlement for the energy market should meet five key criteria in order to boost growth, these being clarity, unlocking investment, increased access and operation, strong delivery of services, and efficiency.
Regarding clarity, the trade group is asking the government to ensure it consults on new regulations in a “deliberate, cooperative way” to give industry stakeholders greater confidence. It adds that this clarity will also boost consumer confidence and bring more investment into the sector. Furthermore, the letter notes that the current regulatory settlement for some parts of the energy sector “actively discourages” investment, something which is harmful to the UK government’s ambitious 2030 decarbonisation goals.
Additionally, Energy UK notes that the use of digital tools should be increased in order to lower the costs of regulatory compliance, with a focus on “simplified, proportionate” regulation and governance. Increased digitalization could also bring other benefits, the letter notes, including the reduction of barriers to entry to the market which could encourage competition and innovation.
The trade group notes that regulators have a “crucial role” in the planning process for new energy projects, adding that streamlining regulatory processes is key to achieving growth, as is ensuring that planning functions are granted sufficient resources. The letter also states that uncertainty and delays in business and clean generation connections to the energy grid are holding back growth, noting that regulators must be supported in their role of rationalizing and accelerating grid connections, as well as applying sufficient focus to emerging strategic system planning.
In the letter, Dhara Vyas, chief executive of Energy UK commented: “Energy is an essential service: the balance of economic regulation and consumer protection is crucial. Rethinking the current regulatory settlement in energy is crucial if we are to truly seize the moment and achieve the government’s missions. Energy UK welcomes the opportunity to consider how regulation can deliver economic growth, and we look forward to engaging with this process.”
