• Natural Gas News

    Britain's Emissions Cuts Lessen: Ofgem


With the low-hanging fruit of power generation picked, transport is now a sticking-point.

by: William Powell

Posted in:

Natural Gas & LNG News, Europe, Corporate, Political, Environment, COP24, Regulation, Intergovernmental agreements, News By Country, United Kingdom

Britain's Emissions Cuts Lessen: Ofgem

Great Britain continues to be a global leader in cutting greenhouse gas emissions, according to British energy regulator Ofgem’s annual State of the Market report published October 3, but progress is slowing.

Greenhouse gas emissions have fallen by 42% since 1990, more than any other large advanced economy, owing largely to the decarbonisation of electricity generation. This has been driven by government policies, such as the carbon price which penalises coal plants in particular, and the huge growth in wind and solar power, which last year accounted for a third of the total.

Progress is slowing however, with last year seeing the smallest reduction in emissions since 2012, down 2.5% this year, down from a 3% fall the previous year.

Transport continued to be the largest single source of carbon emissions, although emissions fell 3% last year partly down to an increase in the number of alternative fuel vehicles, which now account for 2% of the licensed cars on the road.

A priority of Ofgem’s new corporate strategy is helping decarbonise the economy at the lowest cost to consumers. Ofgem will set out more details on this early next year, it said.

Separately, competition in Great Britain’s retail energy market continued to develop in 2018-19. Medium suppliers benefited the most from record switching rates – just over 20% in June 2019, up from 19% the previous year – which swelled their market share by 7 percentage points in electricity and 5 percentage points in gas to over 20% of consumers overall. 

They also gained customers who were transferred to them under Ofgem’s safety net after many suppliers failed and exited the market. Since January 2018, 13 have had to exit the market.

At the same time, the market dominance of the six larger suppliers continued to weaken as they lost 1.3mn customers and saw market share fall to around 70% of consumers, compared to around 75% the year before. Small suppliers for the first time saw their market share fall to 9% of consumers, down from 10% the year before. 

Price transparency has improved in general for business customers. However microbusinesses still lose out and pay on average twice as much for gas and 30% more for electricity than the average across all business customer segments, often because they are on expensive default tariffs.