Grid constraint costs in Great Britain have risen sharply in recent years as renewable generation continues to grow faster than the transmission network can expand. With a large share of wind generation located in Scotland and demand concentrated further south, the system operator often has to curtail generation or redispatch other plants to maintain grid stability.
A recent report by LCP explores how reforms to the current electricity pricing framework could help reduce these costs while supporting the UK’s transition to a clean power system by 2030.
As part of the government’s Review of Electricity Market Arrangements (REMA), zonal pricing was considered but ultimately rejected. Instead, the government plans to retain a single national wholesale electricity price while introducing a package of reforms known as Reformed National Pricing (RNP). These reforms aim to strengthen locational investment signals through strategic planning, network charging reforms and improvements to balancing arrangements.
According to LCP’s analysis, these changes could significantly reduce constraint costs by improving where new generation and flexibility assets are built and how the system manages congestion.
Read more here:
https://www.lcp.com/en/insights/publications/cutting-gb-grid-constraint-costs-what-reformed-national-pricing-could-achieve-by-2030
