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Find out more about how Energy Systems Catapult can help you and your teams
It is a decade since the UK Government began to implement its Electricity Market Reform (EMR 1.0) including major mechanisms such as Contracts for Difference (CfD) to support low carbon investment and a new Capacity Market (CM) to ensure resource adequacy.
These kickstarted the rapid decarbonisation of the GB electricity system and drove extraordinary innovation and cost reduction, especially in offshore wind.
However, the context has changed in important ways since they were first introduced. The new goal of Net Zero greenhouse gas emissions by 2050 will drive even higher penetrations of variable renewables, and an earlier role for electrification of transport and heat.
New system issues have emerged as a result of the rapid growth of variable renewables which we know more about today compared with 2012. Additionally, demand-side response and storage (‘flexibility’) has not kept pace with variable renewables growth, despite the
availability of new technologies.
There are a number of key risks associated with continuing to rely on the Government’s existing centralised contracting policies:
We welcome the announcement by BEIS of a Review of Electricity Market Arrangement (REMA) but the pace of change must be made more rapid. The six key reforms set out below include a detailed set of linked policy steps and actions, all of which may take several years
to implement in full and as such should start without delay.
Our major report, Rethinking Electricity Markets, sets out the case for ambitious market reforms – focusing on the importance of more dynamic and granular wholesale market signals, and a move from centralised contracting (CfDs & CM) to outcome-based policy
mandates. Our proposals are based around six key reforms:
BEIS Select Committee call for evidence: Decarbonisation of the Power Sector
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Independent thought leadership that combines expertise in clean technology, economics, and energy policy design, informed by cutting-edge modelling and evidence-based analysis.
Find out moreFind out more about how Energy Systems Catapult can help you and your teams
Find out more about how Energy Systems Catapult can help you and your teams