3 Dec 2012
Impact of EMR on interconnection
In 2012, DECC commissioned Pöyry to analyse the impact on the GB market and interconnection to surrounding countries as a result of some of the current proposed policy measures from the Electricity Market Reform and Cash-out Reform. To do this, we ran a series of different scenarios and sensitivities in the GB electricity market using our pan-European electricity model.
These scenarios have been specified by DECC, with the aim of flexing three main input assumptions, which differ from scenario to scenario:
- the implementation of a Balancing Mechanism cash-out reform, simulated by removing an assumed existing implicit price cap of £500/MWh on the wholesale electricity price;
- the Capacity Payment Mechanism (CM); and
- the Interconnector Capacity (IC).
We have assessed these by undertaking scenarios plus sensitivities as agreed with DECC. Many key input and assumptions for our modelling have been provided or specified by DECC. Thus none of the scenarios or sensitivities represent a formal Pöyry view based entirely on Pöyry assumptions.