Title page
Contents
Ministerial foreword 3
General information 6
Why we are consulting 6
Consultation details 6
How to respond 7
Confidentiality and data protection 7
Quality assurance 7
Executive summary 8
Chapter 1. Context, vision, and objectives for electricity market design 13
Context 13
Vision for our future market arrangements 15
REMA Objectives 17
REMA Scope 18
Chapter 2. The case for change 23
Current Electricity Market Arrangements 23
What the current market has delivered 24
Future Challenges 25
Assessment of future market arrangements 38
Conclusion 43
Chapter 3. Our Approach 45
Purpose 45
Stakeholder engagement 45
Approach to options assessment - criteria 46
Approach to options assessment - organising options 47
Approach to options assessment - packaging 49
Chapter 4. Cross-cutting questions 51
Chapter 5. A net zero wholesale market 63
Chapter 6. Mass low-carbon power 77
Chapter 7. Flexibility 85
Chapter 8. Capacity Adequacy 93
Chapter 9. Operability 103
Chapter 10. Options across multiple market elements 109
Consultation questions 113
Glossary 119
Annex: Quantitative Analysis Methodology and Assumptions 126
Modelling Approach 126
Uncertainty 128
Figure 1. Illustrative Capacity Mix, 2020-2050, GW, BEIS Higher Demand Scenario 27
Figure 2. Flexible Capacity Average Annual Load Factors for Each Additional Units of Flexible Capacity, %, BEIS Higher Demand Scenario 30
Figure 3. Residual Demand Distribution, GW, BEIS Higher Demand Scenario 31
Figure 4. Network Constraint Costs, £billion (real, 2020), ESO FES Scenarios 33
Figure 5. Total Inertia, Frequency Response, and Reserve Ancillary Services Market Size, £million (real, 2020), BEIS Higher Demand Scenario 36
Figure 6. Cumulative Distribution of Wholesale Price, £ (real, 2020)/MWh, BEIS Higher Demand Scenario 38
Figure 7. Installed Capacity by Low-Carbon Technology Support Type until 2035 in GB, GW, Net Zero High Scenario 43
Figure 8. Options under consideration 49
Boxes
BOX 1. The interactions between reforms to electricity and retail markets 21