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Ofgem publishes assessment of locational wholesale pricing for GB

Renewable Energy

On Monday 30 October, Ofgem published a report setting out its key findings from assessing the potential impacts of introducing locational wholesale pricing in GB. The assessment looks to provide analysis and insight into how these market designs could work in GB. The report also includes a cost benefit analysis, a look into wider market and system impacts, and an assessment of the potential impact of locational pricing on consumers. The regulator states that its findings suggest that locational pricing is likely to produce significant benefits for society, implemented alongside improvements in how network and generation infrastructure is rolled out and delivered. Ofgem detailed that locational pricing also should improve the accuracy and effectiveness of locational signals, and that improving co-ordination between generation, storage demand and network infrastructure would reduce the amount of new infrastructure needed. Alongside the report, several of the consulting assessments that fed into the report were published. The report aims to support the UK Government’s consideration as part of its Review of Electricity Market Arrangements (REMA). 

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