POLICY PAPER: Market reform: rationale, options and implementation

As a result of Ofgem’s Project Discovery and the DECC Market Assessment, and with the Climate Change Committee’s Fourth Climate Change Budget due in December 2010, the government is embarked on a market reform process, first through a consultation paper and then through legislation. This short paper summarises the rationale for electricity market reform, considers three related options, and sets out the case for a long-term capacity auction mechanism.

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