ESO’s Net Zero Market Reform programme 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 May 2022 the aim is to share initial findings on the future direction of market reform.

The Net Zero Market Reform programme has been split into three phases as follows:

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 (completed November 2021)

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 share initial findings

Evaluation of a range of credible market design options against assessment criteria and sharing of initial findings on the future direction of market reform.

To achieve market reform, we need to work together across the energy industry. We host regular events and workshops to give opportunity for stakeholders to provide their input. If you have any questions or to find out how to get involved please email [email protected]

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Key updates

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

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Phase 3 Conclusions: Markets Forum

22 March 2022

On 22 March 2022 we hosted our Net Zero Market Reform Phase 3 conclusions event. During the event we presented a re-cap of the programme to date, the case for market reform, the outcome of our assessment of the Operation market design options, and our conclusions. We also hosted a panel discussion with industry experts where we discussed our conclusions and answered questions from the audience. This event will be followed up with a detailed report to be published in May.

See below the recording from the event along with a more detailed version of the slides that were presented.

Download Phase 3 Conclusions

Watch Phase 3 conclusions recording

Phase 3: Refined market design options events

17-18 January 2022

On 17 and 18 January 2022 we hosted our first Net Zero Market Reform events of Phase 3. The objective of these sessions was to share the refined market design options for each of the key market design elements identified in Phase 2. On 17 January we focused on the market design elements that fall under the Operation category and on 18 January we focused on the market design elements that fall under the Investment category.

See below recordings of each event and the slides presented by our project partner FTI consulting during the sessions.

Refined Market Design Options (Operation) – Recording

Refined Market Design Options (Operation) – Slides

Refined Market Design Options (Investment) – Recording

Refined Market Design Options (Investment) – Slides

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Case for change and options assessment framework publication

18 November 2021

On 18 November 2021 we published an update on our Net Zero Market Reform programme which presents our conclusions from Phase 2.  It draws together the results of modelling analysis with insights from ESO experts and external stakeholders. In this publication 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. 

See below the interactive document, the print ready document and the recording from the Market Forum event on the same day where we provided an overview of the publication.

Interactive Net Zero Market Reform update 

Print ready Net Zero Market Reform update

Watch the recording

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

Markets forum – Net Zero Market Reform

22 June 2021

On 22 June 2021 we provided an update on our Net Zero Market Reform programme 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

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 programme, 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