“Security of supply should be the first and most important consideration in energy policy,” the House of Lords Economic Affairs Committee says in its new report The Price of Power: Reforming the Electricity Market.

The committee says “Intervention by successive governments in the electricity sector has led to an opaque, complicated, and uncompetitive market that fails to deliver low cost and secure electricity.” It wants the government to “step back from the market and allow all generating technologies to compete against each other” and it called for an independent Energy Commission to ensure competitive auctions have independent oversight and are scrutinised carefully.

The committee said decarbonisation targets were “a given” but “Poorly-designed government interventions, in pursuit of  decarbonisation, have put unnecessary pressure on the electricity supply and left consumers and industry paying too high a price.”It should be achieved at the lowest possible cost to consumer, even if “This may mean waiting for the development of new technologies which can reduce emissions. The government should make sure that the pace of reductions is flexible and not a rigid path to be achieved at all costs.”

The competitive auctions should be technology-neutral, the peers said. In running them:

• the required capacity would be identified prior to the auction;
• the desired level of carbon emissions would be  fixed;
• all technologies would compete;
• an appropriate levy on intermittent generators woild reflect the cost of back-up generation;
• the cost of any updates to transmission networks would be reflected in bids;

The committee added: “Hinkley Point C is a good example of the way policy has become unbalanced and affordability neglected. It does not provide good value for money for consumers and there are substantial risks associated with the project.”

Responding to the report, Dai Hudd, Prospect union deputy general secretary,  said: “The key recommendation that the UK’s broken energy market can be fixed by introducing further competition is flawed because no government would sit back and watch the lights to go out.

“We welcome the suggestions to reform the capacity market, set up an energy commission and provide more funding for research, but the report contains little original thinking on how to improve the security of energy supply.”

The report’s conclusion that government intervention has ‘led to an opaque, complicated, and uncompetitive market that fails to deliver low cost and secure electricity’, is evident to everyone who works in the industry, said Hudd.