1. GB Electricity Market Reform: The implementation challenges ahead IAEE International Conference Stockholm, June 20 – 22 2011 Dorcas Batstone Dorcas.batstone@elexon.co.uk 21 June 2011

2. UK Government Objectives

3. Who are the key influencers?

4. What are the key requirements (and challenges) for implementation

5. The what

6. »And if that wasn’t enough there’s all this to contend with too! Retail market review Smart metering TransmiT The Green Deal Smart Grids Cash-out review EU developments »What’s missing? The what (2) Demand side

7. The when 2050 - Reduce greenhouse gas emissions by at least 80% Spring 2011 – White Paper on EMR proposals 2020 – Replace 25% of existing capacity 2020 – 30% of electricity from renewable sources

8. »21 June 2011 – still no White Paper but what’s happened since? Are we still on track?

9. »Best estimate is that £200bn investment is needed in new plant and infrastructure but how much will EMR cost? »Regulatory impact assessment – indicative costs and benefits * 20 year time period How much will it cost? Costs* (range)Benefits* (range) Packages£24bn - £27.3bn£20bn - £20.4bn Security of supply£ 1.27bn- £ 1.98bn£808m - £929m Decarbonisation£16.6bn - £24.1bn£9.9bn - £20.2bn

10. Who pays? Not the Government Generators and Suppliers Taxpayers Consumers

11. »‘Buy in’ »Legislation (GB and EU) »Licences – obligations »Who sets prices (CfDs, auctions) – new Government bodies? »Procurements – service providers »Commercial contracts – existing bilaterals and balancing services »System changes – central and participant systems »Changes in customer behaviour Dependencies

12. »It’s a challenge! Conclusion

13. ELEXON

15. deliver the BSC effectively, efficiently and economically drive improvements forefront of the changes in energy markets remaining independent identifying and exploiting new opportunities benefit our customers and stakeholders leader in the efficient transformation of energy markets shared solutions to address common industry problems