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Enabling investment and innovation

Spot market settlement on real-time pricing

We have decided to implement our dispatch-based, look-ahead design for real-time pricing to make wholesale spot prices more certain, more accurate, and more efficient.

  • Wholesale
  • Innovation
  • Prices

    • Overview

    On 1 November 2022, we changed the way spot prices for electricity are calculated and published so everything is done to better reflect real-time market conditions. It’s the biggest change to the wholesale electricity market since it started in October 1996.

    Prior to November 2022, spot prices were indicative only, with the final prices confirmed two days later. Under real-time pricing, spot price information is updated at the end of each half-hour trading period. A time-weighted average of prices is published as the final price for that trading period. This new price certainty means consumers can act confidently to avoid high prices.

    On 27 April 2023, the second phase of our real-time pricing project went live with:

    • enhancements to the current dispatchable demand regime to better reflect the physical characteristics of industrial load
    • dispatch notification participation for aggregated demand response and distributed energy resources (minimum resource sizes may apply at the system operator’s discretion).

    We would like to thank all those who provided feedback on our latest consultation to enhance and clarify the dispatch notification product. After considering all feedback, we decided to amend the Electricity Industry Participation Code to implement our three proposed amendments. Read our decision paper.

    Find out about the final phase of RTP, read our RTP explainer and watch our video below:

    Timeline

    Past activity

    Project background

    The Electricity Authority regulates the electricity industry for the long-term benefit of consumers. Unlocking the potential for more renewable energy is one of the ways we can do this, as part of our strategic ambition of low-emissions energy.

    A cleaner mix of energy will require large quantities of new renewable electricity generation, increased use of distributed energy resources, new ways to participate and more participants – changing the dynamics of the electricity system as we know it.

    We need a stable regulatory environment with robust rules and clear price signals. That is why this project focuses on introducing real-time pricing into the wholesale electricity market.

    Real-time pricing delivers accurate and reliable spot prices published at the end of each half hour trading period, removing any guess work and encouraging more participants to take part in the market with certainty around costs and benefits.

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