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December 23, 2010
Ofgem Publishes Brattle’s Centralised Renewables Market Report

Ofgem, the Great Britain (GB) energy regulator, has published a Brattle report that addresses the management of power produced by Intermittent Renewable Energy generators (IREs) such as wind and solar power. The report, by Brattle principals Serena Hesmondhalgh and Dan Harris, recognises that wind and other IRE’s make it difficult to develop accurate production forecasts, and are therefore more exposed to imbalanced prices than other generators. The design of the GB imbalance market means that these imbalances can make the development of renewable power sources less attractive, which runs counter to the UK government’s ambitions for increased renewable generation. Ofgem asked The Brattle Group to consider the idea of a Centralised Renewables Market, in which renewable energy would be sold. Our report recognised that aggregating wind forecasts for many geographically dispersed wind generators could reduce the average level of imbalance. The authors suggested that a Centralised Intermittent Renewables Aggregator (CIRA) could aggregate wind power and sell it, thereby maximizing net revenues for wind farms. The CIRA would also invest in wind forecasting technology, allowing for more accurate forecasts than a collection of individual forecasts. The authors recommended that Ofgem quantify the benefits of the CIRA relative to the status quo, and test the reaction of the main potential participants to the concept. Ofgem published the report as part of their project discovery, which is investigating whether or not future security of supply can be delivered by the existing GB market arrangements over the coming decade. To read the full report, please visit Ofgem’s website.