Great Britain and the European Union

The Challenge

DECC wanted to engage more proactively with the development of more detailed plans for the further integration of European electricity markets. Particularly DECC wished to understand the impacts of capacity sharing and balancing sharing on Great Britain (GB) and on Europe as a whole over the period to 2030. The work was intended to inform decisions on the UK’s position on the issue and to help the UK effectively influence the European Commission.

Our Solution

EWI Energy Research & Scenarios, a German non-profit organisation, and IPA were commissioned to carry out this work.

A long-term European electricity market model was created in order to determine the benefits of capacity sharing and balancing sharing for different levels of integration. Benefits were quantified in terms of the reduction in national demand for secure capacity, the more efficient use of generation capacity, and more efficient investment. Particular attention was paid to the role of further interconnection and demand side response (DSR) within GB and the EU.

IPA provided GB electricity market and policy expertise, and contributed to the analysis of the results. Specifically, IPA:

  • Was responsible for quality assuring all deliverables, providing overall guidance and advice to the Project Team, and reviewing written material submitted to DECC;
  • Explored the implication of different policy options on GB and European Union (EU) market participants, including the cost and complexity of implementing these options, the potential impact on consumers, and other regulatory considerations;
  • Assessed the practicality and probability that these policy options would maximise mutual benefits given existing EU Regulations and Directives; and

•           Contributed to the final report, and produced separate free-standing summaries of all the work undertaken.