The electricity market is in transition. Increasing amounts of intermittent, low carbon generation alongside European reforms for a single European electricity market are driving changes in the wholesale market. Recognising the challenges and opportunities that this presents, we first established an industry forum, the Future Trading Arrangements (FTA) Forum, and have since continued to tackle these questions with stakeholders through the Future Wholesale Markets (FWM) project. These provide a way of tackling these future issues, working together with stakeholders to ensure a secure, low-carbon, affordable market into the future.
Future Trading Arrangements Forum
We established the FTA Forum in 2013 to provide a focal point for building consensus on the principles of GB electricity trading arrangements and any changes that may be required by the changing market and policy framework. FTA examined the principles behind GB electricity trading arrangements and explored which (if any) needed to change to reflect the stresses put on them by a changing wholesale market. The FTA Forum met five times from May 2013 – November 2014, with two smaller working groups taking place in 2013.
Future Wholesale Markets
The conclusion from the November 2014 FTA Forum meeting was that, in order to robustly assess the future impact of policy, we needed to deepen our understanding of how different players participate in the wholesale market. This was the driver for the FWM project. The project aims to look at the effect of recent Ofgem and government reforms on electricity wholesale markets, as well as challenges and opportunities stemming from changes in the generation mix.
In summer/autumn 2015, we held a set of 23 bilateral meetings with market participants to hear about the key risks and opportunities that they face in the wholesale market, how markets and policy interventions are affecting their investment and operating decisions and how projected changes from:
demand side response and;
These discussions were summarised through an event in October 2015, along with an update on the monitoring of our electricity balancing (EBSCR) reforms, our Secure and Promote liquidity forms and our wider monitoring of the electricity and gas wholesale markets. View materials from the Wholesale Markets Workshop (27 October 2015).