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UK Electricity Market Reform and the Energy Transition: Emerging Lessons

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  • Michael Grubb
  • David Newbery

Abstract

The 2013 Electricity Market Reform (EMR) was a response to problems of delivering reliability with a growing share of renewables in its energy only market. Four EMR instruments combined to revolutionise the sector; stimulating unprecedented technological and structural change. Competitive auctions for both firm capacity and renewable energy have seen prices far lower than predicted and the entry of unexpected new technologies. A carbon price floor displaced coal, whose share fell from 46% in 1995 to 7% in 2017, halving CO2. Renewables grew from under 4% in 2008 to 22% by 2017, projected at 30+% by 2020 despite a political ban on onshore wind. Neither the technological nor regulatory transitions are complete, and the results to date highlight other challenges, notably to transmission pricing and locational signals. EMR is a step forwards, not backwards; but it is not the end of the story.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Michael Grubb & David Newbery, 2018. "UK Electricity Market Reform and the Energy Transition: Emerging Lessons," Working Papers EPRG 1817, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
  • Handle: RePEc:enp:wpaper:eprg1817
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    References listed on IDEAS

    as
    1. Newbery, David, 2016. "Missing money and missing markets: Reliability, capacity auctions and interconnectors," Energy Policy, Elsevier, vol. 94(C), pages 401-410.
    2. Newbery, David M., 1998. "The regulator's review of the English Electricity Pool," Utilities Policy, Elsevier, vol. 7(3), pages 129-141, November.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Electricity market design; capacity auctions; renewables support;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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