Electricity Trading Arrangements

This paper examines the possibility for RE generation and embedded generation in general, to acquire a significant part of the total electricity production in the light of the present regimes in electricity trading, which governs both electrical energy itself and the use of the transmission and distribution networks. Particular reference is given to the UK’s NETA model and its effect on embedded small-scale generators. The paper investigates the reasons behind the inflexibility of the established pricing regimes and the obstacles to new pricing concepts to accommodate increased levels of embedded generation. The various developments in the recent creation of the electricity related markets such as the green certificates ones are discussed in relation to the possible commercial gains that can be acquired by RE and CHP generators by participating in the trading process. The paper concludes that participation of embedded generation in markets of green certificates, ancillary services and others is essential for competition with traditional forms of generation to occur on equitable terms, and for enhanced deployment of renewables to take place, given the nature of the existing electricity trading arrangements.