Flexible energy firms laud Ofgem’s net zero action plan

A group of more than 20 energy companies and trade associations have written a letter to the new chief executive of Ofgem to welcome its recent publication of a nine point action plan for meeting the UK’s net zero emissions target.

The signatories are all members of the Flexibility First Forum created by Ovo and include its smart energy subsidiary Kaluza as well as Centrica, Octopus Energy and Flexitricity.

Ofgem’s action plan features commitments to ensure energy markets adequately award flexibility, amend regulatory requirements to support innovation and experimentation, and form a net-zero advisory group.

“We welcome the steps Ofgem has taken in the publication of its decarbonisation action plan,” the letter responds.

“For a cost-efficient decarbonised system, consumers should be directly incentivised for intelligent and efficient energy and network use. This can only be achieved if customers are rewarded for shifting demand away from peak times and providing flexibility to the networks to help manage system stability and constraints.”

It continues: “The decarbonisation action plan is a clear statement of intent to support flexibility. To turn that intent into action and to provide industry with the confidence it needs to evolve rapidly and invest in innovation, it’s crucial we see the detail of the commitments outlined in the plan and their timings as soon as possible.

“We look forward to working with you to address the obstacles that might otherwise prevent customers from being empowered to drive the energy system transformation and benefit from that change.”

The full list of signatories is below:

• The Association for Decentralised Energy (ADE)
• Centrica
• Chameleon Technology
• Eco2Solar
• Electron
• Eon
• Flexitricity
• Geo
• Glen Dimplex Heating & Ventilation
• Kaluza
• Kiwi Power
• Solarcentury
• Solo Energy
• Moixa
• Octopus Energy
• Ovo
• PassivSystems
• Powervault
• The Association for Renewable Energy and Clean Technology (REA)
• RenewableUK
• techUK

The net-zero action plan was released on the same day that Jonathan Brearley replaced Dermot Nolan as the new chief executive of Ofgem. He had previously served as its executive director for systems and networks.

Although not one of the nine main actions, the plan also includes a commitment to address concerns over the “greenwashing” of energy tariffs by some suppliers.

Tom Steward, policy expert for Good Energy, said: “We have never seen a clearer intent from the regulator to crack down on greenwashed energy tariffs. It is brilliant to see Ofgem acknowledge that some suppliers are overstating their environmental impact and that it plans to put a stop to consumers being misled.

“As with much of the programme, how Ofgem intends to achieve this goal will be crucial. The REGO system was originally intended to provide transparency but left open a loophole for unscrupulous suppliers to exploit.

“We need a watertight new approach to ensure customers wanting to play a role in tackling climate change can choose a green energy tariff that does what it says on the tin.”