REMA – The Review of Electricity Market Arrangements (United Kingdom)
Share on LinkedIn6 Jun 2024
Transforming the UK Electricity Market: REMA consultation
The Review of Electricity Market Arrangements (REMA) was launched in April 2022 with a purpose to deliver reforms to the electricity market in Great Britain.
The government made a commitment in the British Energy Security Strategy to undertake an all-inclusive review of electricity market design, focused on three major objectives designed to develop a future ready energy system.
The core objective for the REMA programme is reform of the electricity market to facilitate the decarbonisation of the electricity system by 2035, whilst ensuring security of supply is achieved and cost effectiveness is delivered.
The first consultation concluded in October 2022 with the government publishing a summary of responses in March 2023, a summary of responses can be accessed here.
The second consultation opened in March 2024 and concluding in May 2024, it focused on four challenges effecting the UK’s electricity market with a purpose to set out how the electricity market in Great Britain should evolve.
Passing through the value of a renewables-based system to consumers
In this challenge, the following questions were considered:
- How best to decouple gas and electricity prices to pass through the benefits of renewables to consumers, and what is the role of marginal pricing within electricity markets.
- How best to incentivise electricity demand reduction from consumers, and what is the role of markets in doing this.
- How can Corporate Power Purchase Agreements (CPPAs) benefit different consumers and developers of low carbon capacity, and how might this role evolve.
Investing to create a renewables-based system at pace
In this challenge, the following questions were considered:
- How to maintain security of supply in a future electricity system dominated by intermittent renewable generation.
- How to manage a smooth transition away from unabated gas to low carbon flexible technologies.
Operating and optimising a renewables-based system cost-effectively
In this challenge, the following questions were considered:
- How to ensure that efficient price signals are sent in the wholesale market so that whole-system costs are minimised.
- How to improve mechanisms and markets for balancing the system.
- How to ensure sufficient liquidity is maintained under future market arrangements.
A summary of responses is expected to be produced during the summer of 2024 and will be followed by a policy development phase (concluding mid-2025) with full scale implementation expected to start from 2025 onwards.
How NUS Can Help
If you wish to talk further about how REMA will impact your business then please contact the team here at NUS Consulting Group.
Our UK office has specialist teams committed to Energy Management and Sustainability, our can support with further insight, developments and forward planning opportunities as REMA is implemented in the UK, get in touch with your NUS consultant, or contact us.
More: Energy Market Commentary, Electricity, Review of Electricity Market Arrangements (REMA)