A leading Westminster think tank is today calling for a “radical overhaul” of energy regulation ahead of the government’s Comprehensive Spending Review (CSR) later this month.
In a new report out today, Policy Exchange says that by consolidating the 30 different bodies that are responsible for energy policy, regulations and rules, the government could save “hundreds of millions of pounds”.
According to Policy Exchange, the 30 bodies often carry out overlapping functions, adding costs and red tape to energy companies, all the while costing an estimated £600m to run each year.
“The sheer complexity of the system means that energy companies are now employing hundreds of people in their policy, regulatory and government affairs teams,” the think tank said, adding, “This cost acts an obstacle for new energy companies looking to enter the market with new and innovative products to help households already struggling to pay their gas and electricity bills.”
Policy Exchange is urging the government to instead restructure the administrative groups into three more-centralised bodies: an energy delivery group, an industry codes group and an independent systems operator.
The report’s author, Richard Howard, said: “There are now over 30 organisations actively involved in the administration of the energy industry. They often perform similar functions, pushing up costs, and creating complexity for energy companies.”
“This unnecessary red tape risks deterring new entrants and stifling growth and innovation,” Howard added. “It is time for the government to consider consolidating a large number of these bodies.”