The centralised energy market is inappropriate for the net-zero energy economy, with the growth of bi-directional energy flows, expansion in heat and transport electrification. The current market was established to ensure national supply met demand and support large central energy market players. Market rules, management, and grid infrastructure have lagged and are no longer suitable for net-zero.
Establishing local energy markets is a solution to deliver a net zero energy economy.
Local markets can be 15 houses with 3 houses having solar panels, or a city around the UK and the world, where the local authority has large arrays of solar panels and wants to supply its own social housing stock. There will be many of these markets established around the UK.
Local electricity markets can re-balance the value chain in electricity moving margin from the national energy markets to local energy markets. This provides additional margin to be shared between local consumers and local small generators. Local electricity markets will bring together small energy users and small generators at a local level.
The markets can be structured to efficiently dispatch green generation over other forms of generation supporting de-carbonisation.