Energy Market Reform in Great Britain
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Energy Market Reform in Great Britain. The evolution of a market. The evolution of a market. The Electricity Pool NETA BETTA EMR. The Electricity Pool. Government-sponsored initiative - privatisation Mandatory pool – Pooling & Settlement Agreement Pool pricing and capacity price

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Energy Market Reform in Great Britain

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Energy market reform in great britain

Energy Market Reform in Great Britain

The evolution of a market


The evolution of a market

The evolution of a market

  • The Electricity Pool

  • NETA

  • BETTA

  • EMR


The electricity pool

The Electricity Pool

  • Government-sponsored initiative - privatisation

  • Mandatory pool – Pooling & Settlement Agreement

  • Pool pricing and capacity price

  • Contracts for difference

  • NFFO

  • E&W only – separate arrangements for Scotland and NI


From pool to neta

From Pool to NETA

  • RETA process

  • POOL successes

    • Security of supply

    • New investment

    • Retail supply competition

  • Pool failures

    • High prices

    • Gaming

    • Inflexible governance


Energy market reform in great britain

NETA

  • Bi-lateral contracts

    • OTC trading

    • Power exchanges

  • Balancing

    • Balancing & Settlement Code

    • Bids and offers

    • Imbalance charges

  • Renewable Obligation


Betta

BETTA

  • Extension of NETA to Scotland

  • Operation and development of GB Grid

    • NGC’s role

    • Scottish TOs


Need for further electricity market reform

Need for (further) Electricity Market Reform?

  • Twin challenges of climate change and energy security

    • Decarbonising the ESI

    • Diversifying energy supply

  • Incentivising investment

    • Step change in investment required

    • Inadequate incentives under NETA


Key features

Key Features

Contracts for Difference

The Capacity Mechanism

Insurance Policy

Contract Auction

A more integrated European Market

  • Replacement for the Renewable Obligation

  • “Price Certainty”

  • Role of the Counterparty


New limitations enhanced monitoring

New Limitations & Enhanced Monitoring

Emissions Performance Standard

New Institutional Framework

Administration and delivery of EMR

Role of National Grid

Role of Ofgem

  • Annual Limit

  • “Grandfathering”

  • Dash for gas?

    The Office of Nuclear Regulation

  • An independent body

  • Five areas of responsibility


Conclusions

Conclusions

  • Continual need for market intervention

  • Importance of price signals/incentives

  • Regulatory risk


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