The first attempt to create a new means of determining the merit order and hence market prices after privatisation was known as the electricity pool, a mechanism that was intended to deliver electricity prices that approximated to the system marginal cost for efficient dispatch that was previously set by the Central Electricity Generating Board. The was a mandatory uniform price auction, and was one of the first examples of a competitive wholesale electricity market anywhere in the world, and it was copied by a number of other countries, in some cases in its entirety.
This lesson covers the early years of the privatised GB electricity markets and trading in the electricity pool.