On 18 July 2022 the Government released a consultation on options for all non-retail electricity markets in Great Britain: the wholesale market, balancing mechanism and ancillary services. Everything is on the table from the most radical to the incremental. Investors and market participants should pay attention.
Days after the new Energy Security Bill was introduced to Parliament, on 18 July 2022, the Department for Business, Energy and Industrial Strategy (BEIS) launched a review of Great Britain's (GB) electricity market design to ensure it is fit for purpose. Russia's invasion of Ukraine provides BEIS policymakers with a more urgent framing for the energy trilemma they have been grappling with: the transition to a cleaner energy system, the challenges of soaring energy costs and the need to ensure security of supply by reducing the UK's exposure to volatile global markets.
As we explained here, the Energy Security Bill was the most wide-ranging reform of the UK's energy market for several years. However, the Review of Electricity Market Arrangements (REMA) consultation, the first step in the REMA programme anticipated in April's British Energy Security Strategy, may mark the beginning of reforms that go well beyond anything seen since the 2001 introduction of the New Electricity Trading Arrangements (NETA). This is not something that existing or potential investors should ignore.
Our full article is available here.
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