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Why is it happening?

Review of Electricity Market Arrangements (REMA) consultation

Overview

Following the commitment set out in its Energy Security Strategy, the government has published a consultation on the Review of Electricity Market Arrangements (REMA). This aims to ensure that the electricity market design is fit for the purpose of maintaining energy security and affordability for consumers as the electricity sector decarbonises.

The consultation sets out a range of options for reform for all (non-retail) electricity markets, including the wholesale market, balancing mechanism and ancillary services, as well as policies that impact these, such as the evolution of and alternatives to the Contracts for Difference (CfD) scheme and the Capacity Market.

The document includes a number of chapters that explore areas up for discussion including its overall approach to market reform and options for delivering a net zero wholesale market, capacity adequacy, and flexibility.

Following the consultation, which closed on 10 October 2022, BEIS will seek to determine and develop what reforms are needed through engagement with the energy sector, and then establish a full delivery plan and oversee implementation. We recommend reading the consultation, noting the possible options for reform, and responding where necessary.

Background and case for change

Read how NETA and BETTA introduced a single set of wholesale electricity trading and transmission arrangements based on core principles.

REMA vision, objectives and scope

The government set out a vision that future market arrangements will meet, but in order to achieve these outcomes they cannot deliver this on their own.

Approach

The government sets out its approach for the REMA programme and how it plans to consider options for reform.  

Initial options assessment

The remaining chapters of the consultation set out the government’s emerging conclusions from its initial assessment of policy options for reform, with a number of questions set out for each option.

Next steps

Read about what the next steps are once the consultation closes.