Optimal spatial pricing for electricity and its impact on renewable and embedded generation This PhD investigates the importance of implementing adequate locational signals and their possible effects on generation technologies and the performance and regulation of the electricity system, with particular reference to renewable energy in the British electricity market. For over twenty years economists have known how to calculate the optimal spatial pricing for electricity, known as nodal or

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... onal marginal pricing. However, such knowledge appears to have been ignored by the designers of most electricity markets, with the key exception of a few US and international markets. Furthermore it has been suggested that there may be a conflict between the implementation of adequate locational signals and the development of renewable energy because the former may lead to higher network charges which may compromise the profitability (and therefore the feasibility) of renewable energy plants. The literature appears to have already addressed several of the key issues considered by this PhD: spot pricing, optimal spatial pricing, renewable policies, network investments, integration of renewable energy into the power grid. However there seems to be a theoretical and empirical gap in terms of combining these issues together: e.g. given the adoption of optimal spatial pricing, how does this affect the level of production from renewable energy (wind in particular)? Thus this thesis investigates how different forms of spatial pricing may affect renewable technologies, with regards to both their investment and operating decisions, and what regulatory or other policy implications this might imply. In particular this PhD focuses on the British case, where it is alleged that the introduction of more efficient spatial pricing might compromise the development of generation technologies located in particular areas, especially on-shore wind farms in the north of the country. The research contributes to an important area of current policy [...]