The UK’s existing constraint management system, once efficient before the surge in wind generation, has become outdated and inefficient.
That’s according to a new report commissioned by Scottish Renewables, which suggests a decade of underinvestment in the UK’s electricity transmission network, coupled with the substantial increase in renewable energy deployment, has led to a surge in constraint costs, leaving the current system unable to deliver optimal value.
The report underlines the risks to consumers stemming from the escalating constraint costs, including exposure to future energy price crises and delays in the development of new transmission capacity.
The report argues that while LMP has been presented as a suitable solution for a high-renewable power system, it could adversely impact the Scottish renewable energy sector, jeopardise net zero goals and lead to unfavourable outcomes for consumers.
The report suggests an urgent need for a holistic reform of the constraint management system, proposing a shift towards a more sophisticated toolkit that can effectively manage constraints in the evolving energy landscape.
Andrew MacNish Porter, Senior Policy Manager at Scottish Renewables, said: “The way we currently manage grid constraints must be reformed to reflect the needs of our rapidly decarbonising electricity system, and the report from The Energy Landscape demonstrates the potential for constraint management markets to play a key role in this new approach.”