18 April 2024
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Review of electricity market arrangements in GB

To The Point
(6 min read)

The UK Department for Energy Security and Net Zero (DESNZ) has issued the second consultation in its Review of Electricity Market Arrangements (REMA). This affects all energy market participants: generators; suppliers; power purchasers; and investors. The proposed reforms will impact existing subsidies like the Contract for Difference (CfD) and the capacity market. They will influence where new renewable power projects are sited and how they will operate. The consultation is only open until 7 May so there is not long to respond. This is the first of four Insights looking in-depth at REMA. It gives an overview of the proposals and how they could impact current contracts. Future Insights will focus on locational pricing, the CfD and the capacity market.

Challenge 1: Passing through the value of a renewables-based system to consumers (marginal pricing, CPPAs, demand reduction)
Challenge 2: Investing to create a renewables-based system at pace (CfD reforms)
Challenge 3: Transitioning away from an unabated gas-based system to a flexible, resilient, decarbonised electricity system (Capacity Market reforms)
Challenge 4: Operating and optimising a renewables-based system, cost-effectively (locational pricing or alternatives)
Challenge 5: Options compatibility and legacy arrangements

DESNZ are continuing to evaluate each proposed reform against the five criteria we outlined in our previous Insight: value for money (previously called "least cost"); deliverability; investor confidence; whole-system flexibility; and adaptability.

What will the market look like?
How will it affect current arrangements?
Effect on existing CfDs
What happens next?

What should I do now?

The consultation document in full  is here. If you want to respond, you can do so via the Citizen Space online response form. The closing date for responses is Tuesday 7th May. If you would like our help in crafting your response, please get in touch.

Key contacts

Head of IPE and Co-head of Energy and Utilities
United Kingdom

Partner, Infrastructure Projects & Energy

Partner, Infrastructure Projects & Energy
London, UK

Partner, Infrastructure Projects & Energy
Leeds, UK

Managing Associate, Infrastructure Projects & Energy

Managing Associate, Infrastructure Projects & Energy

To the Point 

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