Zonal pricing is now under consideration for implementation in the GB power market. While this is very much not a given, this note summarises the key reports on its potential impacts. We find that while there is an overall reduction in revenues across generation, this may be less than originally predicted and new regional price differences and timing differences may favour storage in Scotland and delay new gas plant construction nationally. We think this later second order impact improves the environment for other providers of flexible generation, potentially offsetting any hit from the first order impacts of a zonal system.
02 May 2024
REMA - Zoning in on Zonal Pricing
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REMA - Zoning in on Zonal Pricing
Drax Group plc (DRX:LON), 560 | Invinity Energy Systems PLC (IES:LON), 23.0 | NextEnergy Solar Fund Ltd (NESF:LON), 77.6 | SIMEC Atlantis Energy Ltd. (SAE:LON), 0.8
- Published:
02 May 2024 -
Author:
Adam Forsyth -
Pages:
14
Zonal pricing is now under consideration for implementation in the GB power market. While this is very much not a given, this note summarises the key reports on its potential impacts. We find that while there is an overall reduction in revenues across generation, this may be less than originally predicted and new regional price differences and timing differences may favour storage in Scotland and delay new gas plant construction nationally. We think this later second order impact improves the environment for other providers of flexible generation, potentially offsetting any hit from the first order impacts of a zonal system.