Is NETA the blueprint for wholesale electricity trading arrangements of the future?

The New Electricity Trading Arrangements (NETA) in England and Wales are just over one year old and are generally acknowledged to have successfully enabled competitive pressures to emerge fully in the generation market for the first time since the electricity industry was liberalised in 1990. With their emphasis on treating electricity as far as possible like any other tradable commodity and their lack of a centralized clearing market, they represent a radical departure from conventional wholesale trading arrangements. This article explains the principles underlying NETA and examines how the arrangements have fared over their first year.