Ofgem should introduce a new ‘low-carbon gas obligation’ in the next price control framework from April 2021. This would enable the UK to decarbonise its heating sectorat the lowest possible cost.
The gaps it potentially addresses and the interest shown abroad suggests it at least merits consideration here ias a complement to renewable power generation and electric vehicles.
A ‘relative’ cap on the difference between standard variable tariffs and acquisition tariffs could untie Adam Smith’s ‘invisible hand’ in the retail energy market.
Imposing an obligation on suppliers and shippers to hold a certain proportion of their gas in store ahead of every winter would be the most cost-effective solution.