Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Deferred
Review of Electricity Market Arrangements (REMA) has been ongoing for three years
Conclusion
Three years ago, in April 2022, the previous government launched its Review of Electricity Market Arrangements (REMA) as part of its British Energy Security Strategy. This was the government’s flagship policy to enable a net 59 Q 68; Department for Energy Security and Net Zero, Quarterly Energy Prices UK April to June 2024, September 2024 60 Committee of Public Accounts, Decarbonising home heating, Thirty-Seventh Report of Session 2023–24, HC 653, May 2024, paragraph 10; Qq 21, 22, 65 61 Q 21 62 Committee of Public Accounts, Decarbonising home heating, Thirty-Seventh Report of Session 2023–24, HC 653, May 2024, paragraph 11; Qq 21, 22 63 Q 21 64 Q 21 65 Q 22 14 zero power sector by 2035, subject to security of supply, while ensuring a fair deal for consumers.66 The Department aims to review how electricity prices are set for households so that they can benefit from cheaper rates if demand is low or when the weather means more energy is produced by intermittent renewable generation. The Department explained that decoupling electricity bills from fossil fuel prices would make them more stable and less exposed to international risks.67 The Department told us that it has “narrow[ed] down on a set of key decisions [it thinks] are important for shaping the market of the future”. The Department told us that it is committed to setting out its proposals “later this year”.68 Ensuring security of energy supply
Government Response Summary
The government will publish a decision on whether to adopt Zonal Pricing or Reformed National Pricing by mid-2025, and will provide the Committee with a timetable for implementing the proposals for change.
Government Response
Deferred
HM Government
Deferred
5.6 The government agrees with the Committee’s recommendation. Target implementation date: September 2025 5.7 No decision has been taken yet on whether to adopt Zonal Pricing or Reformed National Pricing. The Review of Electricity Market Arrangements (REMA) programme has committed to publish a decision by mid-2025, to align with the Contracts for Difference (CfD) Allocation Round 7 auction. Once Ministers have made decisions on market reform and policy design, the programme will progress work to prepare for future legislative requirements. The department will provide the Committee with a timetable for implementing the proposals for change.