Background
The UK government's Electricity Market Reform (EMR) programme represents the single biggest change to this country's electricity market in a generation.
It has very significant implications for generators, suppliers, developers and consumers of electricity from both traditional (fossil) and renewable fuel sources, as well as for those considering financing some of the estimated £110 billion worth of new generation, transmission and other assets envisaged by EMR.
The development of EMR has been underway for nearly three years. Even so, considerable uncertainty remains as to the precise scope and impact of the reforms, most of which will not be implemented before at least 2014.
Indeed, this has tended to exacerbate some of the very problems EMR is designed to address (such as falling generation capacity margins and the inadequate pace of decarbonisation). Continuing uncertainty is tending to deter new investment until greater clarity exists, in turn rendering the reforms all the more urgent.
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