PS22261 - Introducing Local Markets to Reform Wholesale Electricity Strategy

***** THIS IS AN AWARD NOTICE, NOT A CALL FOR COMPETITION *****

This procurement is being concluded following a mini competition under the Crown Commercial Services Research and Insights DPS - RM6126

Brief Description of Requirement

We are commissioning a desk-based policy development project to further scope and consider the feasibility of the 'local markets' option that is being considered as part of the Review of Electricity Market Arrangements (REMA) programme.

REMA's core objective is to reform GB electricity market arrangements so that they facilitate the full decarbonisation of the electricity system by 2035, subject to security of supply, and are cost effective for consumers. It will do this by looking at various elements of the electricity market arrangements, including the wholesale market, capacity adequacy, low carbon investment, flexibility, and system operability, and by implementing reforms in each of those areas to ensure that our future market arrangements will:

- deliver a step change in the rate of deployment of low carbon technologies and reduce our dependence on hydrocarbon imports;

- provide the right signals for flexibility across the system;

- facilitate consumers to take greater control of their electricity use by rewarding them through improved price signals whilst ensuring fair outcomes;

- optimise assets operating at local, regional, and national levels; and

- ensure that the security of the system can be maintained at all times.

This commission will support the development of one of the more transformative potential reforms to current wholesale market arrangements, specifically, models which can introduce and strengthen locational price signals at the local level through the development of 'local markets'.