ESO’s Net Zero Market Reform project was established in early 2021 to examine holistically the changes to current GB electricity market design that will be required to achieve net zero. By April 2022 the project is expected to deliver recommendations for a preferred high-level package of reforms.

The project has been split into three phases:

Phase 1– Scoping (completed March 2021)

Analysis of the GB market landscape and review of international case studies. The purpose of this phase was to set out the framework for future phases of work.

Phase 2 – “Case for change” analysis and identification of options

Deep dive analysis into current and future market issues, defining market objectives and success criteria with a view to Carbon Budget 6 and net zero, and identification of a long list of market reform options to tackle the issues identified. 

Phase 3 – Assess solutions and submit recommendations

Assessment and evaluation of a range of credible market design options against market objectives and success criteria followed by the recommendation of a preferred high-level package of solutions

To achieve market reform, we need to work together across the energy industry. We will be hosting regular events and workshops to give opportunity for stakeholders to provide their input. To find out how you can get involved please contact [email protected] or use the link below to subscribe for updates.

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Key updates

Below you can find core updates from the project so far.

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Case for change and options assessment framework publication

18 November 2021

We've published an update on our Net Zero Market Reform project which presents our conclusions from Phase 2. It draws together the results of modelling analysis with insights from ESO experts and external stakeholders. We identify the key challenges for markets to address on the road to net zero, set out our framework for assessing the different market design alternatives, and present the list of options we are taking forward for detailed consideration in our next phase of work. 

Interactive Net Zero Market Reform update Print ready Net Zero Market Reform update

Market design options workshop

14 September 2021

On 14 September 2021 we hosted one of our Net Zero Market Reform workshops looking at the range of possible market design options consistent with achieving net zero. The objective of the workshop was to develop a long list of possible options and discuss what assessment criteria should be used to assess the relative merits of the different options. We captured stakeholders ideas and thoughts on both topics.

See below a summary of the outputs from the workshop.

Market Design Options – Output Summary

Case for change workshops

27-29 July 2021

Between 27 and 29 July 2021 we hosted three net zero market reform workshops looking at the case for market reform (“case for change”). Each workshop focused on a different package of work; investment, flexibility and location and we asked stakeholders to share their views on whether current market design drives the right signals to achieve the requirements for a net zero energy system.

See below a summary of the outputs from the workshops.

Case for Change Workshops – Output and Feedback Summary

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Markets forum – Net Zero Market Reform

22 June 2021

On 22 June 2021 we provided an update of our Net Zero Market Reform project and the plan for tackling the case for market reform (“case for change”). We also hosted a panel discussion with BEIS and Ofgem where we discussed the case for market reform and the associated challenges in redesigning GB electricity markets for net zero.

See below links to both the recording and slides from the event.

Watch the recording View the slides

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The road to net zero electricity markets launch

25 March 2021

On 25 March 2021 we hosted our first event as part of ESO’s road to net zero electricity markets launch. We launched Phase 2 of the Net Zero Market Reform project, shared key insights from Phase 1 and outlined our high-level plans to progress our review of GB electricity market design for net zero throughout the rest of the year.

See below links to both the recording and slides from the event.

Watch the recording View the slides