A Novel Methodology to Investigate the Impact of Electricity Market Reforms on Future Electricity Prices

Electricity market reforms are essential to the United Kingdom (UK) government's plan to achieve net zero by 2035. However, the impact of these reforms on future electricity prices remains challenging due to the complex and intermittent nature of renewable energy sources. This research paper presents a novel methodology to investigate the impact of current electricity market reforms in the UK on future electricity prices. The methodology integrates advanced simulation techniques with a detailed analysis of market mechanisms, providing a comprehensive framework to assess the impacts of regulatory changes. Locational pricing is a proposed alternative to single wholesale market pricing in the recent Review of Electricity Markets Arrangements (REMA) consultation. To conduct the research, the study uses a 36-bus reduced version Great Britain (GB) transmission system using PowerFactory to calculate the prices in each zone based on the Future Energy Scenarios (FES). The findings of this study reveal that adopting locational pricing could result in significant geographical disparities in electricity prices across different zones.