The electricity market place - the pool

On 31 March 1990, a new market was established in England and Wales for the trading of electricity between generators and suppliers. The new trading arrangements seek to reflect two principal characteristics associated with the physical generation and supply of electricity in an integrated system. First, with an integrated system it is not possible to trace electricity from a particular generator to a particular supplier. Second, it is not possible to store electricity in large quantities. Clearly, it follows that there is a continual need to match electricity generated with that supplied. For such reasons electricity generated within an integrated system can be considered to be 'pooled' to meet demand. The new electricity market place can be divided into Commercial and Operational markets and operates under the terms of contractual agreements between those participating in it. Sales and purchases of electricity in this market are made between generators and suppliers according to a set of rules which govern the market's operation and calculation of payments due to and from each other. This paper concentrates on the mechanics of operation of the Commercial and Operational Market Places. It also explores the impact of new software and the hardware on the economics of the two Market Places. Emphasis is placed on the benefits of the new software/hardware, e.g., improved auditability and ensuring optimum economic scheduling of generating plant in order to meet customers' expectations and comply with NGC's statutory requirements.