Zonal pricing would have created over £2 billion more welfare in the UK between 2022 and 2024
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If a zonal electricity market had been implemented in 2022, 2023, and 2024, it would have improved Great Britain’s welfare by £2 billion, according to a University of Edinburgh model.
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More spatially granular electricity wholesale markets promise more efficient operation and better asset siting in highly renewable power systems. Great Britain is considering moving from its current single-price national wholesale market to a zonal design. Existing studies reach varying and difficult-to-reconcile conclusions about the desirability of a zonal market in GB, partly because they rely on models that vary in their transparency and assumptions about future power systems. Using a novel open-source electricity market model, calibrated to match observed network behaviour, an article by the University of Edinburgh researchers quantifies consumer savings, unit-level producer surplus impacts, and broader socioeconomic benefits that would have arisen had a six-zone market operated in Great Britain during 2022-2024.