The UK Electricity Market Reform and the Capacity Market

Size: px
Start display at page:

Download "The UK Electricity Market Reform and the Capacity Market"

Transcription

1 The UK Electricity Market Reform and the Capacity Market Neil Bush, Head Energy Economist University Paris-Dauphine Tuesday 16 th April, 2013

2 Overview 1 Rationale for Electricity Market Reform 2 Why have we favoured a Capacity Market? 3 Key design considerations and current positions 4 Next steps 5 Q&A 2

3 1 Rationale for EMR The UK electricity market faces significant challenges Fifth of plant closing by 2020 Long run electricity demand could double by 2050 Weak signals in the pure wholesale market for low carbon generation Creating right incentives for low carbon and back-up generation 3

4 1 Rationale for EMR EMR introduces a package of measures to provide investor certainty Carbon Price Floor (CPF) The Carbon Price Floor will provide long-term certainty about the cost of carbon in the UK electricity generation sector Contract for Difference (CfD) Feed-in Tariff with Contracts for Difference (CfD) will provide long-term revenue certainty and reduced revenue volatility Emissions Performance Standard (EPS) An Emissions Performance Standard will provide further certainty on the regulatory environment for fossil fuel plant by providing clarity on the emissions cap from new non-abated thermal plants Capacity Market (CM) Capacity market legislated for. Designed to provide investors with the certainty they need to put adequate reliable capacity in place, and protect consumers against the risk of supply shortages 4

5 Overview 1 Rationale for Electricity Market Reform 2 Why have we favoured a Capacity Market? 3 Key design considerations and current positions 4 Next steps 5 Q&A 5

6 2 Capacity Market rationale Where is increasing pressure for action on security of supply coming from? What is security of supply? Where is the pressure? Means a variety of things now Minimise expected level of unserved energy/loss of load expectation Diverse fuel mix and sourcing of supply Diverse technology mix Sufficient supply to balance supply and demand in medium/long term build Sufficient supply to balance supply and demand in real time availability and dispatch Social pressure if lights to go out Concern of massive spikes and volatility in wholesale prices and consumer bills; increasing risk of missing money problem Increasing intermittency on system (wind and solar); traditional generation playing different role Increasing retirements on system environmental regulation and coal plants; nuclear in certain countries Consumer bill concern heightened by current household/business balance sheet pressures Increasing reliance on intermittent and less flexible generation accentuates pressure 6

7 2 Capacity Market rationale Incentivising new build flexible generation case of CCGTs/OCGTs 1. Spark spreads 2. Licensing and permitting 3. Envisioned role in supply mix Electricity demand Capacity margins Gas price Current and future estimates Difficulty of obtaining license? Current and future requirements Where will siting be? Baseload, mid merit, peakeror back up generation? What are decarbonisation objectives? What are prospects for storage and interconnection? Key drivers 4. Cost of capital and portfolio considerations Any reasons why different from other technologies? Players in the sector State of financial sector 5. Policy and regulatory What is expected carbon price? Any emission performance standards for new build? Separate mechanism for ensuring security of supply? Revenue from balancing/ancillary service markets 6. Construction costs of playing envisioned role in supply mix What are costs of becoming more flexible/faster ramp up times? What are costs of becoming CCR? Is the necessary gas supply infrastructure (pipelines, LNG import terminals, etc.) in place? 7

8 2 Capacity Market rationale What are the options and why are capacity markets being favoured? A Energy only market Missing money and implicit price cap concern Arguable whether will rise to VoLL; what is the socially acceptable level? Conditions for movement to capacity markets Options B C D E Strategic reserve/generator of last resort/direct tender Procure but stay out of wholesale market; dispatch when needed at trigger point Would have to be at high level still acceptable? Slippery slope concerns Greater role for balancing markets Role will arguably increase over time with intermittents Different product real time balancing vs. incentivising new build Same pressures as energy only market on prices Demand response Ensure responsive demand side; need to aggregate customers + smart metering/price responsive consumer Useful, but takes time and still issue of missing money Increasing interconnection Social pressure on prices Growing acceptance of missing money problem from energy only market Belief not mitigated by balancing services, interconnection or demand response alone Increasing intermittency on system creating further pressure Conditions of movement to capacity market increasingly being met Allow for sharing of capacity margins across jurisdictions Economically effective idea, but does not solve missing money problem F Capacity market (either through price or volume setting) Capacity market sits alongside wholesale market Used in Ireland, Spain, PJM, ISO-NE, etc. 8

9 2 Capacity Market rationale If properly designed, Capacity Markets should lead to equivalent revenues to energy-only markets Equivalence of revenues: for eligible resources, overall revenue should be equivalent to revenues for selling electricity in an efficient electricity market. Capacity markets will provide the residual missing money that would exist in a perfect energy-only market. OECD quote: In the future, dispatchabletechnologies.will require that a portion of their revenues be derived from other sources than energy-only electricity markets if they are to stay in the market and provide the necessary back-up services. Capacity payments or markets with capacity obligations will play an important part in addressing this issue (OECD Nuclear Energy Agency, Nuclear Energy and Renewables ). Paymentsbetween electricity suppliers and capacityproviders: we anticipate a settlement agency will administer payments, but payments themselves will be between suppliers and capacity providers What are exitoptions? combination of allowing more responsivedemand side to develop through DSR, smart metering, etc. and cash out reform 9

10 Overview 1 Rationale for Electricity Market Reform 2 Why have we favoured a Capacity Market? 3 Key design considerations and current positions 4 Next steps 5 Q&A 10

11 3 Key design considerations in a capacity market What are the key design considerations in a capacity market? 1. Eligibility 1. Product 2. Eligibility 3. Incentives to be available What are we wanting to buy with a capacity market? Availability (able to deliver energy) at times of system stress Different from capacity providers declaring themselves available at particular times Demand side response? Imports? Low carbon? Electricity demand reduction? New vs. existing plant? Retrofitting of existing units? How do you define a system stress warning? Should it be ex ante or ex post? What should penalties be based upon? What is the appropriate relationship with VoLL? Which VoLL? Should there be a penalty cap? Should you have spot tests? Should obligation occur on plant level or portfolio level? Key design considerations 4. Procuring optimal amount and in right location What does the demand curve look like? How do you define the various points? How do you avoid overpayment? How do you incentivise capacity where needed? Is it important to take into account system constraints? 5. Length of contract and frequency of auctions How long should capacity contracts be? Should they be different for new and existing? For existing should they be different for those wanting retrofit? How long in advance should auctions be run? Should there be residual auctions? 6. Consistency with other market arrangements, secondary trading and payment Do you want to encourage secondary trading? Who holds the physical obligation? How does CM interact with wholesale market and balancing/ancillary service markets? What is the appropriate payment model? 11

12 3 Key design considerations in a capacity market Capacity market high level design Capacity to procure Auction Secondary trading Delivery Payment Forecast of peak demand translated into a capacity requirement Timing of first capacity auction Total MW capacity contracted from willing providers through central auction Includes DSR, storage etc. as well as generation Lead time between auction and delivery year; Arrangement to enhance role of DSR Capacity providers may hedge their risk by trading financial products in private markets Providers of capacity commit to be available when needed or face penalties in delivery year Capacity Market coexists with wholesale market Choice of penalty model balance certainty vs. effective incentives Costs of capacity shared between suppliers (probably in proportion to their market share) Choice of payment model 12

13 3 Key design considerations in a capacity market Capacity market development what are we legislating for in the Energy Bill? Legislating for introduction of a Capacity Market -Government minded to run first auction in 2014, for delivery of capacity in the year beginning in the winter of 2018/19. A final decision will be taken subject to evidence of need. This will be informed by updated advice from Ofgemand National Grid which will consider economic growth, recent investment decisions, the role of interconnection and energy efficiency, as well as consideration of the outcome of the review of the 4th Carbon Budget. Delivery at times of system stress: In return for a predictable revenue stream, capacity providers will be obliged to deliver energy at times of system stress (rather than simply declaring themselves available at particular times). They will be penalised if they fail to deliver energy at times of system stress. Capacityto contract to ensure new capacity is able to participate in the first capacity auction, the lead time between the auction and the delivery year will be four years 13

14 3 Key design considerations in a capacity market Capacity market development what are we legislating for in the Energy Bill? Eligibility low carbon plants receivingsupport through CfDs will notbe able to participate in the Capacity Market, at least whilst CfD strike prices are set administratively. If rules make any differentiation between new and existing plants, those plants built between May 2012 and the first capacity auction will have the option to be treated as new. This will ensure no disincentive to invest now. Pilot auctions if Capacity Market is implemented, the Government also intends to run pilot auctions for delivery of DSR and storage from Length of agreements - We expect existing capacity to have access to 1 year agreements, but longer (around 10 year availability) to new build plants and for existing plants in need of a certain level of capacity payment to enable access to longer term agreements (e.g. to undergo refurbishment). 14

15 Overview 1 Rationale for Electricity Market Reform 2 Why have we favoured a Capacity Market? 3 Key design considerations and current positions 4 Next steps 5 Q&A 15

16 5 Next steps We will be publishing more details shortly on the design of the Capacity Market Forthcoming work (May 2013) Finalising auction design More detailed eligibility rules Developing reliability standard, in conjunction with National Grid Developing capacity agreements Finalising detail of penalty model Further development of the payment model Institutional and governance arrangements 16

17 4 Next steps Next steps Date May 2013 July 2013 Milestone Capacity market final design proposals published Contract for Differences (CfD) final contract published July 2013 October 2013 onwards By the end of 2013 By the end of 2013 Draft Delivery Plan, including draft reliability standard and renewable CfDstrike prices, published for consultation Government consultations on secondary legislation for Energy Bill Energy Bill receives Royal Assent subject to Parliamentary time and the will of Parliament First Delivery Plan, including final reliability standard and renewable CfDstrike prices published (subject to Royal Assent) 2014 EMR delivery mechanisms up and running (subject to Royal Assent), including first CfD signed in mid-2014 and capacity auction for delivery in winter 2018/19 17

ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW

ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW February 2014 ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL The Energy Bill is the government s flagship energy policy. There have

More information

Regulatory Briefing. Capital Markets Day. 17 October 2013

Regulatory Briefing. Capital Markets Day. 17 October 2013 Regulatory Briefing Capital Markets Day 17 October 2013 Agenda Andrew Koss Director of Strategy Damien Speight Head Trader Renewables Obligation Contracts for Difference Levy Control Framework Capacity

More information

npower EMR Explained Session The Energy Event 10 th & 11 th September 2013

npower EMR Explained Session The Energy Event 10 th & 11 th September 2013 npower EMR Explained Session The Energy Event 10 th & 11 th September 2013 Welcome Chris Billing, Head of Indirect Sales, npower Agenda > 13.30 Welcome & introduction Chris Billing EMR Pulse Survey Results

More information

Understanding the Capacity Market

Understanding the Capacity Market Understanding the Capacity Market The Capacity Market What is The Capacity Market? The Capacity Market is a mechanism introduced by the Government to ensure that electricity supply continues to meet demand

More information

Concepts and Experiences with Capacity Mechanisms

Concepts and Experiences with Capacity Mechanisms Concepts and Experiences with Capacity Mechanisms Manuel Baritaud, International Energy Agency Conference Capacity Mechanisms: Experiences in Various European Countries Bundesministerium fur Wirtschaft

More information

Electricity Market Reform: policy overview

Electricity Market Reform: policy overview Electricity Market Reform: policy overview November 2012 2 ELECTRICITY MARKET REFORM: POLICY OVERVIEW Presented to Parliament by the Secretary of State for Energy and Climate Change by Command of Her Majesty

More information

Foratom event 29 April 2015

Foratom event 29 April 2015 Foratom event 29 April 2015 New nuclear in the UK and Electricity Market Reform Colin Parker Head of European Liaison - EDF Energy 1 April 2015 EDF Energy plc. All rights reserved. EDF Energy A UK energy

More information

IMPACT OF GB S ELECTRICITY MARKET REFORM ON INTERCONNECTIONS, CONSEQUENCES ON NORDIC MARKET Michel Martin, 3 April 2014

IMPACT OF GB S ELECTRICITY MARKET REFORM ON INTERCONNECTIONS, CONSEQUENCES ON NORDIC MARKET Michel Martin, 3 April 2014 IMPACT OF GB S ELECTRICITY MARKET REFORM ON INTERCONNECTIONS, CONSEQUENCES ON NORDIC MARKET Michel Martin, 3 April 2014 PÖYRY MANAGEMENT CONSULTING ENERGY Pöyry offices (c) grafikdienst.com Pöyry Management

More information

Impact Assessment (IA)

Impact Assessment (IA) Title: Electricity Market Reform ensuring electricity security of supply and promoting investment in low-carbon generation IA No: DECC0104 Lead department or agency: DECC Impact Assessment (IA) Date: 26/11/2012

More information

ELECTRICITY MARKET REFORM SHAPING THE FUTURE GB POWER MARKET

ELECTRICITY MARKET REFORM SHAPING THE FUTURE GB POWER MARKET ELECTRICITY MARKET REFORM SHAPING THE FUTURE GB POWER MARKET A Pöyry briefing note Electricity Market Reform (EMR) proposals, intended to deliver the transition to a decarbonised electricity sector, have

More information

Electricity Market Reform. Consultation by DECC. Response by E.ON. Summary

Electricity Market Reform. Consultation by DECC. Response by E.ON. Summary Electricity Market Reform Consultation by DECC Response by E.ON Summary We recognise that Government needs to provide stronger incentives to build new low carbon generating capacity to meet the UK s specific

More information

Investing in renewable technologies CfD contract terms and strike prices

Investing in renewable technologies CfD contract terms and strike prices Investing in renewable technologies CfD contract terms and strike prices December 2013 Crown copyright 2013 You may re-use this information (not including logos) free of charge in any format or medium,

More information

This seeks to define Contracts for Difference (CfDs) and their relevance to energy related development in Copeland.

This seeks to define Contracts for Difference (CfDs) and their relevance to energy related development in Copeland. Contracts for Difference and Electricity Market Reform LEAD OFFICER: REPORT AUTHOR: John Groves Denice Gallen Summary and Recommendation: This seeks to define Contracts for Difference (CfDs) and their

More information

Environment and energy briefing from Burges Salmon published in the March 2014 issue of The In-House Lawyer:

Environment and energy briefing from Burges Salmon published in the March 2014 issue of The In-House Lawyer: Environment and energy briefing from Burges Salmon published in the March 2014 issue of The In-House Lawyer: Electricity market reform: an update on contracts for difference Electricity market reform:

More information

Consultation on the draft Electricity Market Reform Delivery Plan

Consultation on the draft Electricity Market Reform Delivery Plan Consultation on the draft Electricity Market Reform Delivery Plan July 2013 URN:13D/139 Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW Telephone: 0300 068 4000 Website: www.decc.gov.uk

More information

Electricity market reform: policy overview

Electricity market reform: policy overview Electricity market reform: policy overview May 2012 Contents Introduction... 3 Electricity Market Reform... 6 The Move to EMR... 21 Costs and Benefits of EMR... 24 EMR in the Devolved Administrations...

More information

A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM)

A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM) A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM) Non-technical summary High level design Draft Decision Paper SEM -14-047 June 2014 1 INTRODUCTION

More information

Implementing Electricity Market Reform (EMR)

Implementing Electricity Market Reform (EMR) Implementing Electricity Market Reform (EMR) Finalised policy positions for implementation of EMR June 2014 Crown copyright 2014 URN 14D/221 You may re-use this information (not including logos) free of

More information

Energy, Trade & Commodities Alert

Energy, Trade & Commodities Alert Energy, Trade & Commodities Alert If you have questions or would like additional information on the material covered in this Alert, please contact the author, or the Reed Smith lawyer with whom you regularly

More information

UK renewable energy an update

UK renewable energy an update UK renewable energy an update 30 October 2014 Robert Hull, Managing Director Renewable energy key challenges 1 2 3 Costs to Climate change: Risks to security consumers: decarbonising of supply: short affordability

More information

Disclaimer: All costs contained within this report are indicative and based on latest market information. 16 th March 2015

Disclaimer: All costs contained within this report are indicative and based on latest market information. 16 th March 2015 Disclaimer: All costs contained within this report are indicative and based on latest market information 16 th March 2015 FD SUMMARY The make up of the electricity bill is changing, with non-commodity

More information

Annex A Feed-in Tariff with Contracts for Difference: Operational Framework

Annex A Feed-in Tariff with Contracts for Difference: Operational Framework Annex A Feed-in Tariff with Contracts for Difference: Operational Framework November 2012 Contents Executive Summary... 5 Document Overview... 9 1. Introduction... 10 The Energy Bill: The Legal Framework

More information

Perspectives on CRMs from an Academic Point of View

Perspectives on CRMs from an Academic Point of View Perspectives on CRMs from an Academic Point of View Prof. Dr. Jan Horst Keppler Professor of economics, Université Paris-Dauphine Scientific Director, Chaire European Electricity Markets (CEEM) Conference

More information

Single Electricity Market (SEM) and interaction with EMIR. Central Bank of Ireland

Single Electricity Market (SEM) and interaction with EMIR. Central Bank of Ireland Single Electricity Market (SEM) and interaction with EMIR Central Bank of Ireland 11 th July 2014 About EAI Overview of SEM and its Participants The market is a gross mandatory pool and consists of generators

More information

DECENTRALISED RELIABILITY OPTIONS Securing European electricity markets Florence Forum, 5 June 2014 Stephen Woodhouse, Director

DECENTRALISED RELIABILITY OPTIONS Securing European electricity markets Florence Forum, 5 June 2014 Stephen Woodhouse, Director DECENTRALISED RELIABILITY OPTIONS Securing European electricity markets Florence Forum, 5 June 2014 Stephen Woodhouse, Director ENERGY MARKETS ARE BEING CHALLENGED Increasing levels of weather variable

More information

Electricity Market Reform: Consultation on Proposals for Implementation

Electricity Market Reform: Consultation on Proposals for Implementation Electricity Market Reform: Consultation on Proposals for Implementation October 2013 2 Electricity Market Reform: Consultation on Proposals for Implementation Presented to Parliament by the Secretary of

More information

4. Comparison with DECC (2014) Estimated impacts of energy and climate change policies on energy prices and bills

4. Comparison with DECC (2014) Estimated impacts of energy and climate change policies on energy prices and bills Energy prices and bills - supplementary tables Contents: 1. Energy prices and bills 2. Assumptions 3. Scenarios to 2030 4. Comparison with DECC (2014) Estimated impacts of energy and climate change policies

More information

POLICY FEEDING RENEWABLE. How the Energy Bill might affect green electricity suppliers and also renewable generators

POLICY FEEDING RENEWABLE. How the Energy Bill might affect green electricity suppliers and also renewable generators FEEDING RENEWABLE POLICY How the Energy Bill might affect green electricity suppliers and also renewable generators Holly Tomlinson Regulation and Compliance Analyst for Ecotricity 18 th January 2013 Contents

More information

Viewpoint. Insights and opinions from Baringa Partners. UK Contracts for Difference: Risks and opportunities

Viewpoint. Insights and opinions from Baringa Partners. UK Contracts for Difference: Risks and opportunities Viewpoint Insights and opinions from Baringa Partners UK Contracts for Difference: Risks and opportunities UK Contracts for Difference: Risks and opportunities The UK Government is set to introduce a

More information

EMR: Consultation on Balancing and Settlement Code subsidiary documents

EMR: Consultation on Balancing and Settlement Code subsidiary documents EMR: Consultation on Balancing and Settlement Code subsidiary documents URN: 14D/108 April 2014 Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW Telephone: 0300 068 4000 Website:

More information

Electricity Regulation in the United Kingdom

Electricity Regulation in the United Kingdom Electricity Regulation in the United Kingdom AIIFL Working Paper No. 10 April 2013 Asian Institute of International Financial Law Faculty of Law The University of Hong Kong www.aiifl.com April 2013 the

More information

ELECTRICITY DEMAND SIDE MEASURES

ELECTRICITY DEMAND SIDE MEASURES Ref: (S)978/hf 9 July 2014 IET evidence to the Energy and Climate Change Committee on ELECTRICITY DEMAND SIDE MEASURES EXECUTIVE SUMMARY 1. Permanent Electricity Demand Reduction (EDR) and Demand Side

More information

Planning our electric future: a White Paper for secure, affordable and low carbon electricity

Planning our electric future: a White Paper for secure, affordable and low carbon electricity Planning our electric future: a White Paper for secure, affordable and low carbon electricity July 2011 Planning our electric future: a White Paper for secure, affordable and low carbon electricity Presented

More information

Reliability Options in Ireland and Northern Ireland Obligations and Penalties

Reliability Options in Ireland and Northern Ireland Obligations and Penalties Reliability Options in Ireland and Northern Ireland Obligations and Penalties European Commission Technical Working Group on Energy: Subgroup on generation adequacy 14 April, Brussels Background Single

More information

ITALIAN EXPERIENCE WITH CAPACITY SUPPORT MECHANISMS

ITALIAN EXPERIENCE WITH CAPACITY SUPPORT MECHANISMS Forum ElCom 2014 Le marché de gros de l electricité en mouvement ITALIAN EXPERIENCE WITH CAPACITY SUPPORT MECHANISMS Guido Bortoni, President AEEGSI (Italy) Palais des Congres Biel/Bienne, November 14th

More information

Annex B: Strike price methodology July 2013

Annex B: Strike price methodology July 2013 July 2013 URN 13D/189 Contents Introduction... 3 Overview of methodology for deriving a CfD strike price... 3 Strike Prices during the cross-over period with the RO (2014/15 2016/17)... 4 Comparison of

More information

The Levy Control Framework

The Levy Control Framework Report by the Comptroller and Auditor General Department of Energy & Climate Change The Levy Control Framework HC 815 SESSION 2013-14 27 NOVEMBER 2013 4 Key facts The Levy Control Framework Key facts 2bn

More information

Demand Response Market Overview. Glossary of Demand Response Services

Demand Response Market Overview. Glossary of Demand Response Services Demand Response Market Overview Glossary of Demand Response Services Open Energi has partnered with Tarmac to provide Demand Response What s inside... Market Overview Balancing Electricity Supply and Demand

More information

The levy control framework (LCF) & contracts for difference (CfD) allocation what it means for the low-carbon generation mix

The levy control framework (LCF) & contracts for difference (CfD) allocation what it means for the low-carbon generation mix The levy control framework (LCF) & contracts for difference (CfD) allocation what it means for the low-carbon generation mix Gareth Redmond 24 th September, 2014 Paid for through energy bills costs passed

More information

UK Electricity Market Reform:

UK Electricity Market Reform: UK Electricity Market Reform: EMR Update - Capacity Market and Strike Prices July 2013 www.allenovery.com UK Electricity Market Reform: EMR Update Capacity market and strike prices July 2013 Contents Introduction

More information

EMR: Consultation on industry code and licence modifications

EMR: Consultation on industry code and licence modifications EMR: Consultation on industry code and licence modifications January 2014 Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW Telephone: 0300 068 4000 Website: https://www.gov.uk/government/organisations/department-of-energy-climate-change

More information

Impact Assessment (IA) Summary: Intervention and Options. Title: Emissions Performance Standard DECC. Lead department or agency:

Impact Assessment (IA) Summary: Intervention and Options. Title: Emissions Performance Standard DECC. Lead department or agency: Title: Emissions Performance Standard Lead department or agency: DECC Other departments or agencies: Impact Assessment (IA) IA : DECC0064 Date: 12/07/2011 Stage: Consultation Source of intervention: Domestic

More information

Contracts for Difference - the new support regime for low carbon generation

Contracts for Difference - the new support regime for low carbon generation Contracts for Difference - the new support regime for low carbon generation James Taylor Raj Bavishi 11 November 2014 UK Incentive Regimes Small scale Feed in Tariffs and the Renewables Obligations have

More information

market design policy paper

market design policy paper market design policy paper 15 September 2014 1 introduction Ensuring economic growth, jobs, secure coverage of basic needs at an affordable and competitive price, and sustainable use of limited resources

More information

ANNEX D ELECTRICITY MARKET REFORM: UPDATE ON THE EMISSIONS PERFORMANCE STANDARD

ANNEX D ELECTRICITY MARKET REFORM: UPDATE ON THE EMISSIONS PERFORMANCE STANDARD ANNEX D ELECTRICITY MARKET REFORM: UPDATE ON THE EMISSIONS PERFORMANCE STANDARD Contents Excutive Summary... 3 Background... 3 Level and Compliance... 4 Administration - Monitoring and Enforcment arrangements...

More information

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere 2. Executive Summary With the introduction of CO 2 emission constraints on power generators in the European Union, climate policy is starting to have notable effects on energy markets. This paper sheds

More information

EXPLANATORY MEMORANDUM TO THE CONTRACTS FOR DIFFERENCE (ELECTRICITY SUPPLIER OBLIGATIONS) REGULATIONS 2014. 2014 No. [XXXX]

EXPLANATORY MEMORANDUM TO THE CONTRACTS FOR DIFFERENCE (ELECTRICITY SUPPLIER OBLIGATIONS) REGULATIONS 2014. 2014 No. [XXXX] EXPLANATORY MEMORANDUM TO THE CONTRACTS FOR DIFFERENCE (ELECTRICITY SUPPLIER OBLIGATIONS) REGULATIONS 2014 2014 No. [XXXX] 1. This explanatory memorandum has been prepared by the Department for Energy

More information

June 2015. Position Paper Contribution to the debate on electricity market design and capacity markets

June 2015. Position Paper Contribution to the debate on electricity market design and capacity markets June 2015 Position Paper Contribution to the debate on electricity market design and capacity markets Eurogas is the association representing the European gas wholesale, retail and distribution sectors.

More information

Electricity Market Reform Contract for Difference: Contract and Allocation Overview

Electricity Market Reform Contract for Difference: Contract and Allocation Overview Electricity Market Reform Contract for Difference: Contract and Allocation Overview August 2013 EMR: Contract for Difference: Contract and Allocation Overview Version 1.0 Contents Energy Market Reform

More information

ANNEX B FEED-IN TARIFF WITH CONTRACTS FOR DIFFERENCE: DRAFT OPERATIONAL FRAMEWORK

ANNEX B FEED-IN TARIFF WITH CONTRACTS FOR DIFFERENCE: DRAFT OPERATIONAL FRAMEWORK ANNEX B FEED-IN TARIFF WITH CONTRACTS FOR DIFFERENCE: DRAFT OPERATIONAL FRAMEWORK 1 CONTENTS Introduction...3 Section A Price Setting...8 Section B CfD Allocation... 18 Section C CfD Terms Pre Commissioning...

More information

UK Electricity Market Reform: The draft Energy Bill June 2012

UK Electricity Market Reform: The draft Energy Bill June 2012 UK Electricity Market Reform: The draft Energy Bill June 2012 2 UK Electricity Market Reform: The draft Energy Bill Contents Introduction 03 Synopsis 09 Electricity Market Reform 18 Contracts for Difference

More information

EMR Explained. Update 1. npower Pulse report on businesses views of Electricity Market Reform. August/September 2013.

EMR Explained. Update 1. npower Pulse report on businesses views of Electricity Market Reform. August/September 2013. EMR Explained Update 1 npower Pulse report on businesses views of Electricity Market Reform August/September 2013 01 02 EMR explained overview Executive summary npower has been giving businesses a voice

More information

SCOTTISHPOWER CONSULTATION RESPONSE ELECTRICITY MARKET REFORM

SCOTTISHPOWER CONSULTATION RESPONSE ELECTRICITY MARKET REFORM SCOTTISHPOWER CONSULTATION RESPONSE ELECTRICITY MARKET REFORM Introduction ScottishPower is a major UK energy company with networks, generation and retail interests. It is part of the Iberdrola group,

More information

Briefing. Electricity Market Reform

Briefing. Electricity Market Reform Updated April 2012 Briefing Electricity Market Reform The Government s aspirations for Electricity Market Reform decarbonisation, security and affordability are sound. But the policies proposed in the

More information

Electricity Market Reform: Amendment to Contracts for Difference (Definition of Eligible Generator) Regulations

Electricity Market Reform: Amendment to Contracts for Difference (Definition of Eligible Generator) Regulations Electricity Market Reform: Amendment to Contracts for Difference (Definition of Eligible Generator) Regulations Consultation on a proposed amendment to enable retrofit Carbon Capture and Storage projects

More information

National Grid EMR Electricity Capacity Report

National Grid EMR Electricity Capacity Report National Grid National Grid EMR Electricity Capacity Report 1 June 2015 Report with results from work undertaken by National Grid for DECC in order to support the development of Capacity Market volume

More information

Energy Productivity & Pricing

Energy Productivity & Pricing Energy Productivity & Pricing Markets for energy, renewable energy and carbon Dr Jenny Riesz February 2014 2 Average electricity retail prices Electricity price rises CSIRO Future Grid (2013) Change and

More information

Electricity Market Reform

Electricity Market Reform e-factsheet Electricity Market Reform Making sure your business is ready 2/9 Electricity Market Reform is here The UK s energy policy is no longer in debate: it s now reality. On 1 August, the Capacity

More information

Government response: EMR consultation on industry code and licence modifications

Government response: EMR consultation on industry code and licence modifications Government response: EMR consultation on industry code and licence modifications June 2014 Crown copyright 2014 Copyright in the typographical arrangement and design rests with the Crown. This publication

More information

Levelized Cost of New Electricity Generating Technologies

Levelized Cost of New Electricity Generating Technologies Levelized Cost of New Electricity Generating Technologies The Energy Information Administration (EIA) produces forecasts of energy supply and demand for the next 20 years using the National Energy Modeling

More information

External Review of Ofgem s Gas Security of Supply Further Interventions

External Review of Ofgem s Gas Security of Supply Further Interventions External Review of Ofgem s Gas Security of Supply Further Interventions A REPORT PREPARED FOR CENTRICA October 2012 Frontier Economics Ltd, London. October 2012 Frontier Economics i External Review of

More information

17 October 2013. Update on EMR. Chris Andrew and Mark Walker

17 October 2013. Update on EMR. Chris Andrew and Mark Walker 17 October 2013 Update on EMR Chris Andrew and Mark Walker Allen & Overy 2013 The UK Energy Policy Trilemma Security of Supply In the next decade a fifth of existing UK generating capacity will come off-line.

More information

Below are our responses to the questions included in Appendix 4 of the consultation document.

Below are our responses to the questions included in Appendix 4 of the consultation document. Electricity Market Reform (EMR): Potential synergies and conflicts of interest arising from the designation of the Great Britain (GB) System Operator (National Grid Electricity Transmission plc) as delivery

More information

Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured Electricity Markets. Jared Moore and Jay Apt.

Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured Electricity Markets. Jared Moore and Jay Apt. Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured Electricity Markets Jared Moore and Jay Apt Supporting Data Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured

More information

ESRI Research Note. The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch

ESRI Research Note. The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch ESRI Research Note The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch Research Notes are short papers on focused research issues. They are subject

More information

4 DAY Course Outline. Power Purchase Agreements. for Emerging Countries

4 DAY Course Outline. Power Purchase Agreements. for Emerging Countries 4 DAY Course Outline Power Purchase Agreements for Emerging Countries Overview This intensive and highly interactive four day hands-on course will provide a comprehensive analysis of issues associated

More information

The participation of non-generation activities in the GB Capacity Market. Department for Energy & Climate Change

The participation of non-generation activities in the GB Capacity Market. Department for Energy & Climate Change The participation of non-generation activities in the GB Capacity Market Department for Energy & Climate Change 22 January 2015 Presentation today 1 Environmental & Energy Aid Guidelines and nongeneration

More information

EMR Update Hedging Your Bets

EMR Update Hedging Your Bets New Balls Please The UK Government s overarching energy policy intent centres on the need to decarbonise the economy in an affordable manner while maintaining a sufficient degree of energy security. The

More information

Progress on market reform: EMR, the I-SEM and the TEM

Progress on market reform: EMR, the I-SEM and the TEM Progress on market reform: EMR, the I-SEM and the TEM David Newbery Electricity Market Reform Belfast 28 th March 2014 http://www.eprg.group.cam.ac.uk 1 Disclaimer Although I am an independent member of

More information

Wind and solar reducing consumer bills An investigation into the Merit Order Effect

Wind and solar reducing consumer bills An investigation into the Merit Order Effect Switch for Good Wind and solar reducing consumer bills An investigation into the Merit Order Effect Executive summary Concerns over the cost of renewable subsidy schemes have led to significant policy

More information

EMR Capacity Market Implementation Coordination Workshop

EMR Capacity Market Implementation Coordination Workshop EMR Capacity Market Implementation Coordination Workshop Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight

More information

Investment risks in a decarbonising electricity market

Investment risks in a decarbonising electricity market Investment risks in a decarbonising electricity market Dr William Blyth, Oxford Energy Associates International Energy Agency Emissions Trading Workshop Paris, September 2013 Investment challenges Uncertain

More information

Government response to the CFD Counterparty and Electricity Settlements Company operational costs 2014/15 consultation

Government response to the CFD Counterparty and Electricity Settlements Company operational costs 2014/15 consultation Government response to the CFD Counterparty and Electricity Settlements Company operational costs 2014/15 consultation Consultation on the operational cost levies June 2014 Crown copyright 2014 URN 14D/182

More information

Cost of Preferred (or more likely) Option Net cost to business per year. prices)

Cost of Preferred (or more likely) Option Net cost to business per year. prices) Title: Electricity Market Reform (EMR) Final Investment Decision (FID) Enabling IA No: DECC0083 Lead department or agency: DECC Other departments or agencies: HM Treasury Summary: Intervention and Options

More information

EMR and FID Enabling for Renewables Evaluations: Government Response

EMR and FID Enabling for Renewables Evaluations: Government Response EMR and FID Enabling for Renewables Evaluations: Government Response 13 October 2015 15D/487 EMR and FID Enabling for Renewables Evaluations: Government Response Department of Energy and Climate Change

More information

Customers and Other Interested Parties Direct Dial: 020 7901 7000 Email: gb.markets@ofgem.gov.uk

Customers and Other Interested Parties Direct Dial: 020 7901 7000 Email: gb.markets@ofgem.gov.uk System Operators, Transmission System Owners, Promoting choice and value for Generators, Suppliers, Traders, all gas and electricity customers Customers and Other Interested Parties Direct Dial: 020 7901

More information

Future Energy Systems in the UK. Hergen Haye

Future Energy Systems in the UK. Hergen Haye Future Energy Systems in the UK Hergen Haye The Context for Electricity Market Reform (EMR) The UK s electricity market faces big challenges Fifth of plant closing by 2020 Long run electricity demand could

More information

Response by NIE Energy (PPB)

Response by NIE Energy (PPB) NIE Energy Limited Power Procurement Business (PPB) Review of K factors & Supply Margins and Tariff Structure Review Consultation Paper CER-09-093 Response by NIE Energy (PPB) 11 September 2009. Introduction

More information

CAPACITY MECHANISMS IN EU POWER MARKETS

CAPACITY MECHANISMS IN EU POWER MARKETS CAPACITY MECHANISMS IN EU POWER MARKETS Can we progress to bilateral energy options? Simon Bradbury Ultimately, European renewable targets mean that prices and dispatch patterns will be dictated by wind

More information

Response to the Energy White Paper Issues Paper PREPARED BY EMC ENGINEERING FOR THE AUSTRALIAN GOVERNMENT DEPARTMENT OF INDUSTRY

Response to the Energy White Paper Issues Paper PREPARED BY EMC ENGINEERING FOR THE AUSTRALIAN GOVERNMENT DEPARTMENT OF INDUSTRY Response to the Energy White Paper Issues Paper PREPARED BY EMC ENGINEERING FOR THE AUSTRALIAN GOVERNMENT DEPARTMENT OF INDUSTRY i P a g e www.energym adeclean.com CONTENTS

More information

Contract for Difference for non-uk Renewable Electricity Projects

Contract for Difference for non-uk Renewable Electricity Projects Contract for Difference for non-uk Renewable Electricity Projects August 2014 Crown copyright 2014 URN 14D/291 You may re-use this information (not including logos) free of charge in any format or medium,

More information

The debate on market design in the EU energy policy

The debate on market design in the EU energy policy The debate on market design in the EU energy policy 12 th International Conference on the European Energy Market - EEM15 Lisbon, May 20 th, 2015 Pedro Neves Ferreira Head of Energy Planning pedro.nevesferreira@edp.pt

More information

Managing Risks and Optimising an Energy Portfolio with PLEXOS

Managing Risks and Optimising an Energy Portfolio with PLEXOS Managing Risks and Optimising an Energy Portfolio with PLEXOS Tom Forrest, B.Com. (Hons) Senior Power Market Consultant - Europe 1 Introduction Energy markets inherently exhibit far greater risk compared

More information

1. EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS

1. EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS 1. EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS EXECUTIVE SUMMARY Energy policy in Greece has the potential to make a significant contribution to the country s economic recovery. Increasing competition and

More information

Eligibility for an exemption for the costs of Contracts for Difference for Energy Intensive Industries

Eligibility for an exemption for the costs of Contracts for Difference for Energy Intensive Industries Eligibility for an exemption for the costs of Contracts for Difference for Energy Intensive Industries Summary of BIS consultation July 2013 RWE npower 7/25/2013 PAGE 1 BACKGROUND RWE npower 7/25/2013

More information

WORLD ENERGY INVESTMENT OUTLOOK 2014 FACTSHEET OVERVIEW

WORLD ENERGY INVESTMENT OUTLOOK 2014 FACTSHEET OVERVIEW OVERVIEW More than $1.6 trillion was invested in 2013 in energy supply, a figure that has more than doubled in real terms since 2000, and a further $130 billion to improve energy efficiency. Renewables

More information

Electricity Market Reform: Catering for smaller players and onsite generation under EMR. REA 27 March 2013 Chris Hemsley, DECC

Electricity Market Reform: Catering for smaller players and onsite generation under EMR. REA 27 March 2013 Chris Hemsley, DECC Electricity Market Reform: Catering for smaller players and onsite generation under EMR REA 27 March 2013 Chris Hemsley, DECC Overall objectives and the role of independent renewables The Government s

More information

Addressing Barriers to Renewable Energy Procurement. In association with the EPA Green Power Partnership

Addressing Barriers to Renewable Energy Procurement. In association with the EPA Green Power Partnership Addressing Barriers to Renewable Energy Procurement In association with the EPA Green Power Partnership September 19, 2012 CORPORATE GOALS Corporations are increasingly interested renewable energy. The

More information

Energy Policy & Regulation Briefing Note

Energy Policy & Regulation Briefing Note Creating a sporting habit for life UK Energy Policy and Regulation and what it means for the sports and leisure sector Introduction We have got used to the fact that energy costs will continue to increase.

More information

Independent Renewable Energy Generators

Independent Renewable Energy Generators Route to Market Q&A 1. Why won t the CfD-FITs provide a route to market for independent generators? 2. Why won't the problem be resolved with the introduction of CfDs? 3. Why won't the proposed voluntary/market-led

More information

Capacity mechanism. General Directorate for Energy and Climate August 30, 2012

Capacity mechanism. General Directorate for Energy and Climate August 30, 2012 Capacity mechanism General Directorate for Energy and Climate August 30, 2012 Ministère de l économie, des Finances et de l Industrie Ministère de l'écologie, du Développement durable, des Transports et

More information

Electricity Market Reform: Proposals for Implementation

Electricity Market Reform: Proposals for Implementation EMR Programme Team Department of Energy & Climate Change 4 th Floor Area D 3 Whitehall Place London SW1A 2AW 23 rd December 2013 Dear Sirs, Electricity Market Reform: Proposals for Implementation I am

More information

Natural Gas and Electricity Coordination Experiences and Challenges

Natural Gas and Electricity Coordination Experiences and Challenges 1 Natural Gas and Electricity Coordination Experiences and Challenges Challenges Facing the New England Power System Gordon van Welie, President and CEO, ISO New England 2015 IEEE Power & Energy Society

More information

Electricity Market Reform: Consultation on proposals for implementation Government Response

Electricity Market Reform: Consultation on proposals for implementation Government Response Electricity Market Reform: Consultation on proposals for implementation Government Response June 2014 Crown copyright 2014 URN 14D/222 You may re-use this information (not including logos) free of charge

More information

AMO s Position on Energy Pricing and Policy

AMO s Position on Energy Pricing and Policy AMO s Position on Energy Pricing and Policy AMO Economic Development Task Force June 17, 2010 What s at Stake for Municipalities? As municipal leaders you have to balance: Industrial competitiveness >Impact

More information

RE-POWERING MARKETS Market design and regulation during the transition to low-carbon power systems

RE-POWERING MARKETS Market design and regulation during the transition to low-carbon power systems RE-POWERING MARKETS Market design and regulation during the transition to low-carbon power systems EC-IEA Roundtatble on electricity market design and regulation Brussels, 18 February 2016 Power markets

More information

SECTOR ASSESSMENT (SUMMARY): ENERGY. 1. Sector Performance, Problems, and Opportunities

SECTOR ASSESSMENT (SUMMARY): ENERGY. 1. Sector Performance, Problems, and Opportunities Country Operations Business Plan: Philippines, 2013 2015 SECTOR ASSESSMENT (SUMMARY): ENERGY 1. Sector Performance, Problems, and Opportunities 1. Challenges. Economic growth has been impeded in the Philippines

More information

The Capacity Remuneration Mechanism in the SEM Prepared for Viridian

The Capacity Remuneration Mechanism in the SEM Prepared for Viridian The Capacity Remuneration Mechanism in the SEM Prepared for Viridian 4 April 2014 Project Team Graham Shuttleworth George Anstey Matthew Mair Peer Review Jonathan Falk NERA Economic Consulting 15 Stratford

More information

Power Trading and Retail System. empowering. smarter trading. across the energy value chain. Smart energy. Powering progress

Power Trading and Retail System. empowering. smarter trading. across the energy value chain. Smart energy. Powering progress Power Trading and Retail System empowering smarter trading across the energy value chain Smart energy. Powering progress In today s turbulent and increasingly complex energy markets, Atos Worldgrid PTRS

More information

Making CfDs work for renewable generators

Making CfDs work for renewable generators Making CfDs work for renewable generators This is in two parts. 1 st a brief introduction to the Green Power Auction Market. 2 nd gives more detail on the structure and follows on. We consider this a critical

More information