The 'BETTA' way to reform the Scottish Electricity Market

Update

On Wednesday 16th August 2000, energy regulator Ofgem announced its intention to reform the Scottish electricity market to enable customers and businesses in Scotland to benefit from greater competition. Today, Friday 18th August 2000, Ofgem has published its "Interim proposals for the reform of Scottish trading arrangements".

The proposed reforms, labelled the British Electricity Trading and Transmission Arrangements ("BETTA"), envisage a single British market which will extend the New Electricity Trading Arrangements ("NETA") into Scotland and will include a common set of rules for trading arrangements and transmission access. The single system operator will manage the balancing mechanism for the British wide transmission system. Common transmission access and pricing arrangements will be introduced by means of a common Connection and Use of System Code by the three transmission licensees.

BETTA is scheduled to come into being in April 2002. The reforms will be taken forward through an Ofgem, industry and government steering group which has been set up. Until the introduction of the single transmission system and the pricing arrangements that apply to it, access to the interconnector, which links existing systems in England and Wales, and Scotland, and charging arrangements will be revised to improve transparency.

Ofgem's Deputy Director General (Scotland), Charles Coulthard, said: "These reforms will serve to create a robust British wide electricity market structure by combining a move away from administered arrangements to competitive markets with common transmission arrangements overseen by a single system operator. Evidence in England and Wales and in other countries shows that these type of reforms lead to lower prices. Indeed, the fact that forward prices in England and Wales have fallen by between 10 and 15 per cent demonstrate this. By introducing these reforms, we anticipate that there will be benefits over and above those being offered by the present administered pricing system."

How can we help you?

CMS Cameron McKenna has a dedicated BETTA/NETA unit within its Energy and Projects Group. We help market participants to understand the regulatory implications of BETTA/NETA and the opportunities it creates.

For advice relating to BETTA/NETA or electricity markets more generally, or to find out more about our Energy and Projects Group, please contact either Mark Bartholomew (Tel: 020-7367-2045, Fax: 020-7367-2000, e-mail: [email protected]) or Robert Lane (Tel: 020-7367-2021, Fax: 020-7367-2000, e-mail: [email protected]) for a no-obligation, cost-free discussion.