Britain’s electricity market needs to be substantially reformed if it is to deliver a net zero electricity system by 2035 at least cost to households and industry, reveals a new report published by National Grid ESO.
Net Zero Market Reform – Phase 3 Assessment and Conclusions finds that the current market design – based on a blanket national wholesale price for electricity – is no longer fit for purpose for a rapidly decarbonising system.
The study makes clear that the existing wholesale market design is contributing to a dramatic rise in constraint costs and inefficiencies in balancing the network, while undermining the capability to deliver demand-side flexibility. And if left unchanged, the current national pricing model will impose excessive and unnecessary costs on consumers.
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