Energy policy and regulation

Energy policy

Case study 1

Client: Department of Business, Enterprise and Regulatory Reform (BERR)

Region: UK & Ireland

Title: Dynamics of GB generation investment

In 2006, Redpoint undertook a major study for the UK Government on the prospects for future investment in generation, in support of the Energy Review.  The analysis required detailed modelling of generation investment in Great Britain over the next 25 years, assessing the drivers of investment decisions, and projecting the implications for security of supply, prices and carbon dioxide emissions.  In 2007, BERR asked Redpoint to update the study as part of the analysis to support the Energy White Paper and Nuclear Consultations.  Cost benefit analysis was undertaken for two possible policy interventions to promote security of supply – a capacity payment-type mechanism and the tendering for the construction and operation of peaking capacity by the system operator.  Further analysis was undertaken surrounding the potential impact of future carbon market policy on investors’ decision making. 

Download report file

Case study 2

Client: Department of Business, Enterprise and Regulatory Reform (BERR)

Region: UK & Ireland

Title: Impact of the EU2020 renewables targets on the UK electricity sector

In 2007, BERR asked Redpoint to analyse the impact of the EU 2020 Renewables Targets on the UK Electricity Sector.  The study focused on the feasibility of achieving different target levels of renewables generation, the costs involved and the wider impact on the market and security of supply.  The effectiveness and efficiency of different financial schemes designed to achieve different target levels of renewables were analysed.  For this project we enhanced our dynamic investment modelling framework to include renewables supply curves, biomass supply curves, endogenous learning curves and more sophisticated simulation of intermittent renewables generation.

Case study 3

Client: Office of Gas and Electricity Markets (Ofgem)

Region: UK & Ireland

Title:  Advisors on reforms to electricity and gas trading arrangements

Since February 2007, Redpoint has advised the UK gas and electricity regulator, Ofgem, on the Electricity Cash-out Review, an initiative designed to improve the arrangements for setting imbalance pricing in the Great Britain electricity market.  We have helped to frame the key objectives, preparing for company meetings, reviewing external papers, and undertaking detailed analysis to support Impact Assessments and decision on Balancing and Settlement Code modifications.

Case study 4

Client: CER and NIAER

Region: UK & Ireland

Title: SEM model validation for the Irish Regulatory Authorities

In 2007, Redpoint undertook a project in conjunction with KEMA on behalf of the Commission for Energy Regulation (CER) and the Northern Ireland Authority for
Energy Regulation (NIAER), the Regulatory Authorities for the island of Ireland.  The project’s objective was to review a market simulation tool that the Regulatory Authorities intended to use to model the all-island Single Electricity Market (SEM) that was introduced in November 2007.  We validated the model algorithms and assumptions against the principles and details of generation scheduling and price formation as set out in the SEM Trading & Settlement Code.  The project methodology and results were presented at a number of multi-party workshops and bilateral meetings, a key aim of the review process being to seek industry consensus on the model’s accuracy.  The Regulatory Authorities subsequently used the simulation tool to support activities such as the pricing of directed contracts, the calculation of annual capacity payments, tariff reviews and market monitoring.