The solution would seem to be that industry should anticipate political/ social hot spots. For example (m= market led solution, g= Government led solution) 1m) suppliers could work harder with social enterprises to reduce fuel poverty and debt issues 2m) generators to offer (via auction in particular) packaged profiles that directly meet the needs of small suppliers. 3m) A cap and floor product (similar to that offered by Ofgem to interconnectors see 4g below) should be developed to create a revenue stream for storage. 4m) A standard “market price” CfD or supply contract should be established to help develop “no subsidy” renewables.

Government and Regulators should try and limit intervention including ensuring that any mechanisms they establish transfer into the market sector. Some examples include 1g) Only offering nuclear and CCS CfDs at the same price as Offshore wind clears at. Longevity and technical risk probably justify additional protections but if they mean a higher £/MWh price – forget it. 2g) Ofgem should transfer supplier failure mutuality to the insurance market starting by forcing all suppliers to demonstrate that they are commercially viable. 3g) Both the CfD and the CM should be transferred to the market. So for CfDs government takes the risk during construction but once the project is generating the CfD (or its benefits and risks) should be auctioned off. The CM needs to become a contract and provide some benefits (see Ireland’s CM which includes a cap on €/MWh for those who have CM deals and thereby reduces consumer costs). 4g) The cap and floor protection for interconnectors should be widened and then market tested with a view to that also being transferred into the market.

Nic Rigby NRG Management Consultancy Ltd