Citizens Advice Response to House of Lords Environment and Climate Change Committee Call for Evidence: Dunkelflaute and the Risks of Electricity Intermittency
We welcome this inquiry into how the UK can maintain secure, affordable and low-carbon electricity supply during dunkelflaute events. In this response, we focus on whether current policy frameworks, ultimately paid for by consumers, are sufficient to deliver the required capacity and flexibility, and the allocation of risk between consumers, developers, and investors in such frameworks. We respond to questions 1, 2, 7, 8, 9 and 10.
We emphasise that securing investment in flexible capacity at least cost to consumers is just one part of the challenge. Crucially, policymakers must also ensure that once built, flexible technologies face effective incentives to respond to dunkelflaute events.
We recognize the need for low-carbon dispatchable technologies such as long-duration electricity storage (LDES). As these technologies have low variable costs, they can tackle the market power of gas, especially at times of high demand and low wind output. This can benefit energy consumers by reducing energy bills. However, we argue that a policy focus on securing investment in these technologies is not enough. The Government and Ofgem must also ensure that the right incentives are in place for flexible technologies with low variable costs to reduce price spikes by reliably operating under dunkelflaute conditions. We discuss this in relation to recent Ofgem consultations on the proposed cap and floor scheme for LDES. We also note the potential utility of policies implemented in international contexts to prevent the abuse of market power by marginal generators under scarcity conditions.