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Are the British electricity trading and transmission arrangements future-proof?

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  • Green, Richard

Abstract

In Great Britain, electricity is traded in an energy-only market that relies upon bilateral trading until shortly before real time. The GB System Operator also uses bilateral trading to respond to changes in demand and generation and resolve transmission constraints. Prices are not explicitly spatial, although well-placed generators can charge the system operator more for their output. This paper argues that these arrangements are not well-suited for the challenges of accommodating nearly thirty percent of intermittent wind generation, often located far from demand. The market design already implemented in the north-eastern United States is likely to be more efficient.

Suggested Citation

  • Green, Richard, 2010. "Are the British electricity trading and transmission arrangements future-proof?," Utilities Policy, Elsevier, vol. 18(4), pages 186-194, December.
    • Handle: RePEc:eee:juipol:v:18:y:2010:i:4:p:186-194
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    References listed on IDEAS

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    Cited by:

    1. Staffell, Iain & Pfenninger, Stefan, 2018. "The increasing impact of weather on electricity supply and demand," Energy, Elsevier, vol. 145(C), pages 65-78.
    2. Blázquez De Paz, Mario, 2017. "Production or Transmission Investments? A Comparative Analysis," Working Paper Series 1158, Research Institute of Industrial Economics.
    3. Ruderer, Dominik & Zöttl, Gregor, 2018. "Transmission pricing and investment incentives," Utilities Policy, Elsevier, vol. 55(C), pages 14-30.
    4. Holmberg, Pär & Lazarczyk, Ewa, 2012. "Congestion Management in Electricity Networks: Nodal, Zonal and Discriminatory Pricing," Working Paper Series 915, Research Institute of Industrial Economics.
    5. Ronan Bolton & Timothy J Foxon, 2013. "Urban Infrastructure Dynamics: Market Regulation and the Shaping of District Energy in UK Cities," Environment and Planning A, , vol. 45(9), pages 2194-2211, September.
    6. Pär Holmberg and Ewa Lazarczyk, 2015. "Comparison of congestion management techniques: Nodal, zonal and discriminatory pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    7. Karhinen, Santtu & Huuki, Hannu, 2020. "How are the long distances between renewable energy sources and load centres reflected in locational marginal prices?," Energy, Elsevier, vol. 210(C).
    8. Rabindra Nepal & Flavio Menezes, 2017. "Regulatory Reforms in Small Energy Systems: Experience from Australia's Northern Territory Electricity Market," Economic Papers, The Economic Society of Australia, vol. 36(3), pages 300-316, September.
    9. Chaves-Ávila, José Pablo & van der Veen, Reinier A.C. & Hakvoort, Rudi A., 2014. "The interplay between imbalance pricing mechanisms and network congestions – Analysis of the German electricity market," Utilities Policy, Elsevier, vol. 28(C), pages 52-61.
    10. Franco, Carlos J. & Castaneda, Monica & Dyner, Isaac, 2015. "Simulating the new British Electricity-Market Reform," European Journal of Operational Research, Elsevier, vol. 245(1), pages 273-285.
    11. Rabindra Nepal & Flavio Menezes, 2016. "Small Energy Markets, Scattered Networks and Regulatory Reforms: The Australian Experience," Discussion Papers Series 561, School of Economics, University of Queensland, Australia.
    12. Persefoni Mitropoulou & Eirini Papadopoulou & Georgia Dede & Christos Michalakelis, 2022. "Forecasting Competition in the Electricity Market of Greece: a Prey-Predator Approach," SN Operations Research Forum, Springer, vol. 3(3), pages 1-31, September.

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