EnleashedEnleashed
Fix the energy market
Draft

Great Britain — Reformed National Market

A national wholesale market supported by balancing, constraint management, capacity procurement, Contracts for Difference, ancillary services, network charging and local flexibility mechanisms.

Solution section

Principles

The core design assumptions and principles embedded in the architecture.

Principles

The architecture broadly relies on the following principles:

  1. A national wholesale energy market can remain the main commercial trading layer.
  2. Physical deviations can be corrected closer to real time.
  3. Network constraints do not need to be fully represented in the wholesale price.
  4. Specialised system needs can be addressed through specialised products and mechanisms.
  5. Long-term investment support can be separated from short-run energy pricing.
  6. Networks can recover regulated costs through charging rather than through the wholesale energy price.
  7. Reform can be incremental rather than requiring wholesale replacement of the institutional architecture.

This produces a pragmatic architecture, but also one in which new physical or policy requirements can result in additional mechanisms being layered onto the system.