It will vary on the hh depending on how much market power they have, we still see there being sufficient hours to keep some intra gas competition going

Capacity prices need to stay high as well

(noting our central scenario only gets to ~89% Clea Power target)

In our modelling some gas is still running because its in Merit, so maybe they are assuming there is still the most efficient gas station needed?

Also, where is the breaking of the link between gas and power? By the government own ambition gas will still be running in 50% of hours (generous reading 30% of the time?)

Any ROC generator probably only has 15 years of useful life left, so the agreement length is probably around 10 years at least? We put the long-term PPA market for a index linked discount around 85% for a wind farm, so if thats where the market is offering the Govt has to be higher.

Seems odd, as there would be little saving to the customer here, unless the generator accepted a WCfD with a large haircut. A generator would likely be under a PPA with a discount to the day-ahead price, say 90%. So what discount would a generator be willing to accept for a longer agreement?

New GB wholesale mechanism being consulted on - the Wholesale CfD - RO genertors get to keep their ROCs, but exchange their current PPAs for a government backed one at a fixed price

Also NESO has to step up a gas purchasing operation, what do you do with all the gas already bought by traders?

CCGT RAB: Make gas plant no-longer self dispatch, owners make gas plant available for NESO to dispatch at receive fixed payments. Doesn't necessarily remove gas price influence as other generators are well aware of what the gas cost is and when gas is running.

ES market cap: Amounts to setting a gas price cap and compensating the gas plant the difference. Likely to be very expensive and time limited. Also likely to make GB a net power exporter & if not coordinated with EU Markets, could result in higher gas prices as we then need to import LOTS of gas.

Converting RoC to CfDs: Caps upsides for renewables generators, counterintuitively also makes negative prices less likely, so may even increase wholesale prices. depends on the level of the CfD. What happens if generator refuses.

What practical short-term options might exist for capping or de-linking gas from power prices? Three spring to mind from recent REMA discussions, converting RoCs to CfDs, iberian gas price caps and moving CCGT to a RAB model.

CBAM is complicated because its based on historic emissions intensity, so it might not completely harmonize the price. The effect of the CPS will decrease over time as we get more renewables, but we wont ever eliminate gas burn from the system.

Not to mention the gas price will come down by 2028 when this is implemented, so the impact would be much lower than if it were implemented immediately.

In markets dominated by Gas, or when nuclear output and renewables are lower, and demand higher we would expect to now increase our exports, and potentially increase our gas burn, reducing the overall impact of the measure.

EU ETS prices for 2026 are at €74.3/t (£65/t), UK ETS prices for 2026 are £46.93/t. Therefore a CCGT in the EU is spending £26.75/MWh on carbon, a GB CCGT is spending £34.11/MWh on carbon. Removing the CPS makes the GB CCGT carbon cost £19.2/MWh, £7.4/MWh cheaper than EU

Reducing GB wholesale power prices could result in higher exports/lower imports across the interconnectors. This would feedback into higher gas burn, using less efficient power stations & increasing the price of gas, which will lower the total reduction in the difference in price

However, the CPS also acts as an additional tax on carbon in the GB market, this makes GB carbon prices closer to the European carbon price, affecting the margin between continental power and GB power, and helping to induce import flows into GB.

CPS is a tax on fuel at the gate, the £18/t duty is equivalent of £7-8/MWh based on the efficiency of the power station. As gas plant are normally the marginal fuel we would expect this to be reflected into a reduction in nearly all traded wholesale power products.

So to get to that magic 35MCM/day number we'd need 24GW of onshore wind at decent load factors (over 100GW at low ones) at £42bn (or £177bn). Or 54 new gas fields, each costing ~£4.1 bn, so £221bn

Perhaps the onshore wind farm doesnt last as long? perhaps the gas field output degrades quicker? We could add around £600/kW onto the wind farm cost to account for additional battery storage backup?

Equinor estimated rosebank would require £4.1bn in investment, so thats ~£12bn to get the same level of gas displacement (with an addiitonal £3.6bn of ongoing opex)

A new offshore field can expect to produce around 0.3-1mcm/day, with a mid point of 0.65mcm/day, so we would need around 3.1 new fields to get the same effect as relacing the CCGT

t.co/QgL6H3IXRB

Lets be less chartitable and assume the de-rated capacity of onshore used in the CM at 6.6%, that would need 6GW of onshore wind aat £10.3bn

Lets say an Enlgish onshore wind farm has a load factor of 28%, crudely we'd need 1.4GW of onshore wind to replace that. Thats a cost of £1.7/kW so around £2.4bn.

an 800MW CCGT with a load factor of 50% over 24 hours makes 9.6GWh, thats 2.0472MCM/day at 48% efficiency

To reduce gas demand we could cut product at our CCGTs, lets assume we offset their production with onshore wind.

Over the last year LNG was on average 35MCM/day, so that what we need to reduce demand/increase supply by (I think its much higher right now ~59?)

If we were just think about pure supply and demand ways to cut energy prices, is more gas supply or less gas demand better? lets assume we use wind to cut gas burn rather than stop industrial gas use...