Ofgem publishes state of the market report
5th October 2019 | Commercial Energy
Greenhouse gases fell last year by 2.5%, the smallest reduction since 2012, according to the state of the market report by Ofgem. The energy watchdog said the UK continues to be a global leader in cutting greenhouse gas emissions by progress is slowing. Greenhouse gas emissions have fallen by 42% since 1990, more than any other large advances economy, due largely to the decarbonisation of electricity generation.
This fall has been driven by government policies, such as the carbon prices which penalises coal plants in particular, and the huge growth in wind and solar power. Renewables generated a record 33% of our electricity last year. However, progress is slowing with last year seeing the smallest reduction in emissions since 2012, 2.5% this year, down from a 3% fall the previous year.
Transport continues to be the largest single source of carbon emissions, although emissions fell slightly last year (3%), partly down to an increase in the number of alternative fuel vehicles, which now account for 2% of the licensed cars on the road in GB. In June, the government passed legislation requiring the UK to reduce carbon emissions to net-zero by 2050 following calls from the Committee on Climate Change (CCC).
To meet this target, significant investment is required, particularly in renewables, as well as policies aiding the roll-out of new low carbon technologies and supporting innovation to decarbonise how we heat out homes and businesses. Ofgem has said that a priority of its new corporate strategy is helping decarbonise the economy at the lowest costs to consumers. Ofgem will set out more details on this early next year.
Ofgem’s report has also revealed that competition in Great Britain’s retail energy market continued to develop in 2018-19. Medium suppliers benefited 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.
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