Electricity Market Reform Capacity Market Operational Plan Markets Document Library... · National...

National Grid Electricity Transmission

Electricity Market Reform

Capacity Market Operational Plan

This plan identifies the key milestones and activities required to operate the 2015 Capacity Mechanism

Version 1.0

Published 27th

March 2015


Contents

Introduction............................................................................................................................. 3

Scope and Status .................................................................................................................. 3

Operational Approach .......................................................................................................... 3

Roles and Responsibilities ................................................................................................. 3

Government........................................................................................................................... 3

National Grid (Delivery Body) ............................................................................................ 4

Electricity Settlement Company (Settlement Body) ........................................................ 4

Elexon (including Capacity Market Settlement Agent) ................................................... 4

Ofgem..................................................................................................................................... 4

Key Activities and Milestones............................................................................................ 5



Introduction In 2013/14 the Government published the Capacity Market Implementation Plan in order to provide potential participants in the Capacity Market with details of the key

Capacity Market implementation activities and milestones from National Grid and other delivery partners. Following the successful implementation of the Capacity

Market in 2014, this “Operational” Plan sets out the activities and milestones required to operate the Capacity Market in 2015.

Scope and Status

The timeline for operation of the 2015 Capacity Market is based on the Capacity Market Regulations and Rules and covers both the T-4 and Demand Side Response (DSR) Transitional Auction (TA). The plan brings together milestones from

Government and each of its delivery partners and is intended to provide a high level overview of the steps involved in the operation of the Capacity Market, such that

industry participants have the clarity they require to plan and manage their own operational activities.

The operational plan is a summary plan and does not replace or replicate the detailed operational plans that Government, delivery partners and individual industry

participants may need to produce to manage their respective activities.

Operational Approach

Pre-qualification for the T-4 Auction and DSR Transitional Auction will run in parallel up to the completion of any pre-qualification appeals. The DSR TA process will then be paused until completion of the T-4 auction process. The T-4 auction will be held in

December 2015 and will award capacity agreements which will come into effect in October 2019. Following publication of the T-4 auction results, the DSR TA process

will re-start, with the auction being held in January 2016, awarding capacity agreements which will come into effect in October 2016.

Roles and Responsibilities

A number of organisations will work together to operate the Capacity Market, this section focuses on the roles of these organisations during the pre-qualification and

auction processes.

Government

Overall responsibility for policy and operation of the Capacity Market

Reporting to Ministers / communication of Ministers’ decisions

Finalising the design of new legislation and its implementation

Producing the EMR Delivery Plan and annual updates to it

Managing any future changes to regulations



National Grid (Delivery Body)

Producing an annual capacity report for Government, which will advise on capacity requirements to meet the published reliability standard

Operating core IT systems to support the running of capacity auctions, the pre-

qualification process and the Capacity Market Register

Operating business processes to support capacity auctions and pre-qualification, and producing supporting documentation/guides including the

auction guidelines

Operating business processes to support the management of each delivery year, e.g. contract management

Appointing the Auction Monitor

Electricity Settlements Company (Settlement Body)

Provide accountability, governance and control of the monies collected and

disbursed under the Capacity Market (Payment) Regulations.

Holding and monitoring credit cover from auction applicants;

Verifying meter arrangements for capacity providers that either have complex sites or are not party to the Balancing and Settlement Code (BSC);

Determining Capacity Market settlement disputes relating to the functions of the Settlement Services Provider; and

Monitoring and reviewing the regulations relating to the settlement functions of

the Capacity Market.

Elexon (including Capacity Market Settlement Services Provider)

Carrying out verification of credit cover on behalf of the Settlement Body

Procuring and managing settlement services and systems on behalf of the

Settlement Body

Managing changes to Balancing and Settlement Code (BSC) systems and

documentation

Ofgem

Monitoring the CM and enforcing the legislation

Overseeing NGET’s delivery of its CM roles

Making capacity market rules, while having regard to its principal objective,

general duties, and the CM objectives

Handling disputes which have been escalated following the Delivery Body

disputes process


Activities and Milestones

T-4

ref TA

ref Deliverable Scope Date

requirement

from CM

Rules/Regs T-4 Auction

DSR

Transitional

Auction Dependencies Owner

1

Amended Electricity

Capacity Regulations

in force. DECC

publish proposed CM

Rule changes.

Amended CM Regulations

changes (Interconnectors,

metering, settlement) in force.

Near final draft of DECC CM

Rule changes published.

By Friday 27th

March 2015

By Friday

27th March

2015

DECC

2 Ofgem CM Rule

change consultation

opens

Consultation opens April 2015 April 2015 DECC CM

rule changes

in force

Ofgem

3

SoS provides Data

and assumptions to

the Delivery Body

The SoS provides final data

and assumptions to the

Delivery Body to enable

preparation of the Electricity

Capacity Report (ECR)

No later

than the

22nd April

Friday 17th

April 2015 n/a DECC

4 Ofgem CM Rule

change consultation

closes

Consultation closes May 2015 May 2015 DECC CM

rule changes

in force

Ofgem

5 Submit Electricity

Capacity Report to

SoS

Submit report to SoS including

a recommendation on the

target volume to procure.

Before the

1st June Friday 29th

May 2015 n/a Input

assumptions

from DECC.

NG

6 SoS publishes

determination on

auctions being held

The SoS determines whether

a T-4 auction and DSR TA are

to be held.

By the 15th

June Friday 12th

June 2015 Friday 12th

June 2015 Electricity

Capacity

Report

DECC


T-4

ref TA


requirement

from CM


DSR

Transitional


7 Ofgem publish

final revised CM

Rules

Following consultation, Ofgem

publish final updated version of

CM Rules.

June 2015 June 2015 Ofgem

Consultation

process

Ofgem

8

Provide Auction

Parameters to NG Provide updated demand curve &

target volume based on NG ECR.

Also provide Net CONE, Auction

Price Cap, Min/Max capacity to

procure, Price Duration curves &

Price decrement schedule.

As soon as

practical after

15th June

Wednesday

24th June

2015

Wednesday

24th June

2015

Electricity

Capacity

Report

DECC

9 SoS publishes

Auction

Parameters

SoS publishes the final auction

parameters Friday 26th

June 2015 Friday 26th

June 2015 DECC

10 Publish "Formal"

Auction

Guidelines

NG publish final guidelines to

reflect auction parameters in SoS

publication

Prior to the

opening of the

pre-qual

window

Tuesday

30th June

2015

Tuesday

30th June

2015

SoS

Parameters

NG

11

Further

amendments to

Electricity

Capacity Regs

come into force

Provisional date that amendments

to Regulations relating to double

subsidy and period for posting

credit cover should come into

force

Late June

2015 Late June

2015 The date is

subject to the

will of

Parliament,

and securing

approval of

both Houses

DECC

12 Pre-qualification

window opens IT systems "active" and applicants

submit formal registration and

data submission

T – 20 weeks

Monday 20th

July 2015 Monday 20th

July 2015 NG/

Apps


T-4

ref TA


requirement

from CM


DSR

Transitional


13 Pre-qualification

window closes Last date for applications to be submitted T – 16

weeks Friday 14th

August 2015 Friday 14th

August 2015 Window open

for 4 weeks NG/

App

14

Pre-qualification

Results Day Inform applicants of the outcome of

assessment and update the Capacity

Market Register

Provide SoS with aggregate de-rating

capacity for each category of applicant

(except Interconnectors) & any

recommendation for adjusting the

demand curve (from plant opting out &

still operational).

Send copies of completed applicant

metering assessments to ESC.

T – 10

weeks -

PQ

Friday 25th

September

2015

Friday 25th

September

2015

NG

15 Start of NG

Appeal

submission

window

Opening date for applicants to raise an

appeal with National Grid against the

pre-qualification outcome

Friday 25th

September

2015

Friday 25th

September

2015

App

16 NG Appeal

window closed Closing date for applicants to raise an

appeal with National Grid against the

pre-qualification outcome

Friday 2nd

October

2015

Friday 2nd

October

2015

App

17 Provide

updated

Auction

parameters

Provide the Delivery Body with an update

on target volume / demand curve to

reflect plant opting out but remaining

operational.

PQ + 5

working

days

Friday 2nd

October

2015

Friday 2nd

October

2015

NG update to

SoS on pre-

qualification

impacts

DECC


T-4

ref TA


requirement

from CM


DSR

Transitional


18 NG Appeal

assessment

complete &

appellants notified

Applicant notified of appeal

outcome. Capacity register

updated. Notify SoS of appeals

outcome.

Friday 9th

October

2015

Friday 9th

October

2015

Any/All NG

appeals

assessed

NG

19 Start of Tier 2

Appeal submission

window

Opening date for applicants to

raise an appeal with Ofgem

against the pre-qualification

outcome

Friday 9th

October

2015

Friday 9th

October

2015

App

20

Latest possible date

for applicants to

provide Credit

Cover to the ESC

New build participants and DSR

providers must provide Credit

Cover

PQ + 15

working days

(dependent

on

amendment

to regulations

coming into

force)

Friday 16th

October

2015

Friday 16th

October

2015

Pre-

qualification

results day

App

21 Tier 2 Appeal

window closed Closing date for applicants to

raise an appeal with Ofgem

against the pre-qualification

outcome

Friday 16th

October

2015

Friday 16th

October

2015

App

22 Publish Updated

Auction Guidelines Notification of updated Auction

Parameters (as a result of opt

outs) T – 7 weeks

Monday 19th

October

2015

Monday 19th

October

2015

DECC

update to NG

on

parameters

NG


T-4

ref TA


requirement

from CM


DSR

Transitional


23 Final Credit Cover

verification Latest date for ESC to provide a

Credit Cover approval notice if the

applicant used the full 15 days to

provide Credit Cover.

PQ + 30

working days

Friday 6th

November

2015

Friday 6th

November

2015

Credit Cover

provided ESC

24

Latest possible date

for applicants to

provide Credit Cover

approval notice to

the Delivery Body

Latest date for the applicant to

provide the Delivery Body with a

copy of the Credit Cover approval

notice.

PQ + 32

working days

Tuesday 10th

November

2015

Tuesday 10th

November

2015

App

25 B

Provide Final

Auction parameters

to NG

Provide final updates to Auction

Parameters.

Tuesday 17th

November

2015

Monday 4th

January

2016

For DSR TA,

this is where

the process

re-starts

after the T-4

results are

published.

DECC

26 C

Publish "Final"

Auction Guidelines

& Bidder details

Publish final guidelines inc. any

update to Auction Parameters &

details of Auction Monitor. Notify applicants of pre-qualification

status following completion of

Credit Cover process.

T – 3 weeks -

PQ + 37

working

days

Tuesday 17th

November

2015

Tuesday 5th

January

2016

Final T-4

auction

parameters

Credit Cover

verification

NG

27 D Auction Status

confirmation window

open

Start date for Applicants to submit

confirmations (Existing – Price

Maker/Taker; DSR – Size & In/Out;

New/Refurb – In/Out & length)

Tuesday 17th

November

2015

Tuesday 5th

January

2016

App


T-4

ref TA


requirement

from CM


DSR

Transitional


28 A Tier 2 Appeal process

target completion

date

Following completion of Tier 2

appeal, applicant & NG

informed of outcome.

Friday 20th

November

2015

Friday 20th

November

2015

For DSR TA,

this is where

the process

halts.

Ofgem

29 E

Closing date for

Auction Status

confirmations

Last date for applicants to

submit confirmations T – 10

working

days

Tuesday 24th

November

2015

Tuesday 12th

January

2016

App

30 F

Run Mock Auction Run Mock Auction with all

applicants

Wednesday

25th

November

2015

Wednesday

13th January

2016

NG

31 G

NG provides results

of Auction Status

confirmations to SoS

NG to collate Auction status

confirmations and provide

results to SoS

T – 8

working

days

Thursday 26th

November

2015

Thursday

14th January

2016

NG

32 H

Auction Go/No Go

decision DECC/NG agree Go/No Go

Monday 7th

December

2015

Monday 25th

January

2016

Auction Status

Confirmations Delivery Body

readiness

DECC/NG

33 I

Start Auction Start the first round T

Tuesday 8th

December

2015

Tuesday 26th

January

2016

Go/No Go

decision NG

34 J

Complete Auction Auction closes C

Friday 11th

December

2015

Friday 29th

January

2016

Based on a 4

days auction NG


T-4

ref TA


requirement

from CM


DSR

Transitional


35 K

Notification of

provisional

Auction results

Notify bidders whether they’ve been

provisionally awarded a Capacity

Agreement

Notify DECC and Ofgem of the

provisional results

C + 24

hours

Friday 11th

December

2015

Friday 29th

January

2016

Auction

completing NG

36 L

Auction monitor

sends report to

DECC

Auction Monitor prepares report on

Auction process and submits to SoS C + 2

working

days

Tuesday 15th

December

2015

Tuesday 2nd

February

2016

Auction

completing Auction

Monitor

37 M

Auction Results

Day Publish results of the auction to

Bidders, the Auction Monitor & other

administrative parties C + 8

working

days

Wednesday

23rd

December

2015

Wednesday

10th

February

2016

Auction

completing No counter

instruction

from SoS.

NG

38 N

Issue Capacity

Agreements Issue agreements to successful

bidders C + 20

working

days

No later than

Friday 22nd

January 2016

No later

than Friday

26th

February

2016

Auction

Results Day NG

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