What is REMA?

Announced in the British Energy Security Strategy in April 2022, the Review of Electricity Market Arrangements (REMA) looks to address long-standing inefficiencies of the GB energy market design.

In terms of scope, REMA encompasses non-retail aspects of electricity markets, focusing on facilitating the balancing of supply and demand of electricity, and the policies that are meant to incentivise investments in the assets that generate or use electricity. More specifically, the scope of REMA includes the Balancing Mechanism, ancillary services, the current Contracts for Difference (CfD) scheme, and the Capacity Market (CM). Other topics like retail market changes, hydrogen, and long duration storage are the focus of other, parallel workstreams. They will only be included in REMA to the extent that they overlap with the main REMA objectives.

The government launched the first REMA consultation in July 2022, presenting a number of proposed reforms. The consultation closed in October 2022 and in March 2023 the government published a summary of responses to the consultation and its updated policy position with regards to the options set out. It identified some options for reform that were not taken forward, and others that were merging and which would not be considered as standalone mechanisms.

On 12 March 2024, the government launched its second REMA consultation, through which it sought views on specific proposals and a short-list of remaining options, as well as looking at how the remaining options interact with each other. The results of this consultation were published alongside the REMA Autumn update on 13 December 2024.

The REMA autumn update highlighted how the government’s vision for electricity market reform is expected to work alongside the Clean Power 2030 Action Plan. It provided updates on longer-term reforms to both the Contracts for Difference (CfD) and Capacity Market schemes, noting that no decision had yet been taken between zonal pricing or reformed national pricing. The government further outlined that the update reaffirmed its ambition to conclude the policy development phase of the REMA programme by around mid-2025 and confirmed that the timetable for REMA decisions will align with the timetable for the next allocation round of the CfD scheme.

In our REMA portal, you will find analysis and insights that explore REMA and its potential implications for the energy sector and market participants.