Briefings

Driving down energy bills and security of supply: The case for demand side electricity market reform

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Driving down energy bills and security of supply: The case for demand side electricity market reform

Against the background of rising energy prices driven by volatile fossil fuel costs and investment requirements for new generation, activating the demand side of the power market will be essential in order to reduce consumer bills even if electricity unit costs increase.

The UK Government has recognised that reform of the electricity market is needed in order to attract sufficient levels of investment in energy infrastructure whilst maintaining current standards for security of supply, delivering the low carbon transition and keeping costs down. It is critical that new market structures and institutional arrangements result in the best value for investments across the electricity system. The best way for this to be achieved is for demand side resources (including demand management, demand response and distributed generation – referred to as D3) to be empowered to compete as low cost alternatives to supply side investment.

E3G’s briefing paper outlines the benefits of demand side management and the initiatives required (or already in place) to successfully deliver this.

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