gb electricity market reform: the implementation challenges ahead iaee international conference...
TRANSCRIPT
GB Electricity Market Reform: The
implementation challenges ahead
IAEE International ConferenceStockholm, June 20 – 22 2011
Dorcas [email protected]
21 June 2011
UK Government Objectives
Decarbonisation
Affordability
Security of supply
Who are the key influencers?
The Government
DECC (Department of Energy and Climate Change)
HM Treasury
Committee on Climate Change
Energy and Climate Change Committee
Ofgem
What are the key requirements (and challenges) for implementation
What? When?
Cost? Who pays?
Dependencies
The what
Emissions performance targets
Carbon price support
Feed-in tariffs
Capacity payments
» And if that wasn’t enough there’s all this to contend with too!
•Retail market review•Smart metering•TransmiT•The Green Deal•Smart Grids•Cash-out review•EU developments
» What’s missing?
The what (2)
Demand side
The when
2050 - Reduce greenhouse gas emissions by at least 80%
Spring 2011 – White Paper on EMR proposals
2020 – Replace 25% of existing capacity
2020 – 30% of electricity from renewable sources
» 21 June 2011 – still no White Paper but what’s happened since?
Are we still on track?
FukushimaOil and gas
supply interruptions
Carbon price support
mechanism
» Best estimate is that £200bn investment is needed in new plant and infrastructure but how much will EMR cost?
» Regulatory impact assessment – indicative costs and benefits
•*20 year time period
How much will it cost?
Costs* (range) Benefits* (range)Packages £24bn - £27.3bn £20bn - £20.4bn
Security of supply £ 1.27bn- £ 1.98bn £808m - £929m
Decarbonisation £16.6bn - £24.1bn £9.9bn - £20.2bn
Who pays?
Not the Government
Generators and Suppliers Taxpayers
Consumers
» ‘Buy in’» Legislation (GB and EU)» Licences – obligations» Who sets prices (CfDs, auctions) – new Government
bodies?» Procurements – service providers» Commercial contracts – existing bilaterals and balancing
services» System changes – central and participant systems » Changes in customer behaviour
Dependencies
» It’s a challenge!
Conclusion
ELEXON
deliver the BSC
effectively, efficiently and economically
drive improvements
forefront of the
changes in energy markets
remaining independent
identifying and exploiting new
opportunities
benefit our
customers and stakeholders
leader in the efficient
transformation of energy markets
shared solutions to address common industry problems