Project Description

This research investigates how non-physical traders (NPTs) - participants who buy and sell electricity without producing or consuming it - influence the short-term electricity markets in Great Britain. As Britain’s grid integrates more variable renewable energy sources like wind and solar, trading activity has shifted closer to real time. This project examines whether speculative trading by NPTs improves or harms the efficiency, cost, and carbon intensity of the power system. Against the backdrop of the UK Government's ongoing review of electricity market arrangements, this research aims to provide independent analysis to inform ongoing policy debates.

The work combines power-system modelling, econometric analysis, and detailed market data in collaboration with Outlook Energy, an energy trading and analytics company. It focuses on three main research areas: (1) how speculation on imbalance prices affects system balancing and emissions; (2) how cross-border arbitrage by NPTs influences market efficiency after Brexit; and (3) how speculative trading in intraday markets impacts liquidity and renewable integration. The team aim to share the research beyond academic journals, through the Current Affairs substack. 

Our Team

• Prof. Thomas Morstyn (PI)
• Joseph Cary (DPhil Student)
• Outlook Energy