We worked with the DECC team responsible for designing instruments to support investment in low carbon generation as part of the Electricity Market Reform (EMR) programme. This work was part of a wider engagement led by Cambridge Economic Policy Associates (CEPA), in advance of the EMR White Paper.
Working jointly with the DECC team, we provided subject matter expertise in a number of areas including:
DECC commissioned ESP Consulting to conduct a study of options for intervening in the GB wholesale power market with the objective of improving market liquidity and supporting Ministers during the passage of the Energy Bill. The scope of our study included:
We were engaged to advise DECC on how to form and manage the reference price for the baseload contract for difference. This included a review of various information publicly available on the traded price of electricity, and the issues with each such information source, and the resulting index, in terms of:
This led to a workshop with the relevant industry working group, with our presentation being published by DECC at the following link:
We then went on to consider arrangements to “govern” the reference price such that investors can have confidence it will continue to reflect the traded price for electricity as new price indices emerge, and old indices fall away.
We were engaged by DECC with a focus on the detailed design of the contractual mechanisms associated with the large scale FiT, as well as input to the wider EMR programme, including: