Speaking at Energy Live 2013, Jonathan Brearley, who was the principal architect of electricity market reform, said talk of a price freeze is “responding to popular feeling” and that ensuring a competitive market is “where the debate needs to be”.
He added that “it is certainly unproven that highly regulated prices necessarily leads to lower bills” and that either “the regulator struggles” with regulating the market, or “prices get regulated so low and suppliers begin to go bust”.
“What we really need is a competitive market,” he said.
Brearley added that the political debate surrounding between the government, Labour and the major energy suppliers is actually harming the market.
“At the moment we have politicians on one side and companies on the other, and each of them pointing the finger at each other.
“The problem with that is it does the industry no good as investors find it harder to invest and it does consumers no good as, ultimately, prices will rise.”
Despite the debate surrounding energy policy, and the impact on consumer bills, the former Decc employee added that “the policy is settled “and it’s now about getting it all done”.
Brearely told delegates that contracts for difference and the capacity market will deliver a mix of new generating capacity “at the lowest possible price” whilst ensuring there is sufficient generating capacity.