Capacity Market Coordination Event - EMR Portal - … Markets Document...4 Electricity Market Reform...

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Electricity Market Reform

Delivery Body

Capacity Market Coordination Event 10 August 2017

CM process, roles and responsibilities and Operational Plan

Chris Thackeray

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Delivery Body

In this section we will cover…

Capacity Market process and coverage of it today

Roles and responsibilities of delivery partners

The EMR Delivery Body’s engagement approach

The 2017/18 Operational Plan

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Delivery Body

The end-to-end Capacity Market process

will be covered today…

1. Policy 2.

Capacity 3.

Prequal 4.

Auction 5.

Agreements 6.

Delivery

Arran Morni,

BEIS

Johannes

Pelkonnen

Ofgem

Gareth Lloyd

EMR DB

Faye Purchase

and

Dave Williams

EMR DB

Tim Dart

EMR DB

Emily Hirst,

EMR DB

Dave Preston

NGESO

Joy Nnamani

and

Abdal Hussain

EMRS

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Delivery Body

The Capacity Market process is

delivered by five Delivery Partners…

The Electricity Settlements Company

provides control of the monies collected and

disbursed under the Capacity

Market (Payment) Regulations.

BEIS set CM

policy and

oversee changes

to policy.

Deliver settlement

and metering for

the CM on behalf

of ESC.

Government Regulator EMR Delivery

Body

Settlement

Body

Settlement

Services

Works to ensure that market

arrangements are fit for purpose.

It monitors the CM and manages

changes to the rules.

Delivery of the CM in line with the Rules and

Regulations and running the CM

auctions.

https://www.emrdeliverybody.com/cm/home.aspx

https://www.emrsettlement.co.uk/

https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules

https://www.gov.uk/government/publications/capacity-market-rules


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Delivery Body

Government sets policy…

Responsible for the Capacity Market

meeting its

objectives under Electricity Market

Reform.

Implementing, revising and reviewing CM legislation

Overall coordination of Capacity Market delivery

Decision of whether to hold CM auctions

Setting the auction parameters

Appeals addressed to the Secretary of State


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Delivery Body

Ofgem regulates the market…

Ofgem works to ensure that

market arrangements are fit

for purpose and has a role in

facilitating changes to those

arrangements in the interests

of consumers.

Overseeing the role of the Delivery Body (DB)

Reporting on the operation of the CM

Monitoring the CM in line w/ Rules and Regulations

Determinations on disputes raised on DB decisions

Price Maker Memorandums

Review and revision of CM Rules

https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules

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Delivery Body

National Grid are the Delivery Body of the

Capacity Market…

Responsible for the

implementation of the

CM in line with the

Rules and Regulations and

running the CM

auctions.

Co-ordinating CM operational activities across delivery

partners and capacity providers

Engaging with potential capacity providers on operational

issues and their participation in the CM

Producing the Electricity Capacity Report annually

Delivery of prequalification process and CM auction

Management of Capacity Agreements and CM register

Assessment of Satisfactory Performance of providers


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Delivery Body

Settlements are managed by ESC and

operated by EMRS…

The Electricity Settlements Company is the Settlement Body and provides accountability, governance and control of the monies collected and disbursed under the Capacity Market (Payment) Regulations.

Making payments to Capacity Providers

Verifying, holding and monitoring credit cover from applicants

Meter assurance

Collecting monies from Suppliers to fund Capacity Payments

Monitoring Capacity Provider performance to enable the

calculation of Stress Event penalties

Volume Reallocation


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Delivery Body We have listened to feedback and better

understand our customers…

We have held around 10 individual feedback sessions with our

customers

We continue to participate in a number of industry working groups

along with providers

In our latest customer satisfaction survey we were rated 7/10 or

higher by 77% of respondents

We welcome and receive regular feedback through day to day

engagement with providers

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Delivery Body We have already acted on improvements

in some areas…

We have implemented a new team structure to be more customer

focussed through a dedicated engagement lead for each customer

We are refreshing our guidance for all processes to help our customers

prepare for each capacity market process

We have implemented the EMR admin portal and will aim to continuously

improve the usability of the system

We are streamlining our internal processes around agreement

management, starting with the customer in mind

We trialled two day auctions with shorter rounds for the Transitional

Arrangements Auction and, after success, will be keep this approach

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Delivery Body

We are making commitments to deliver

lasting change…

Regular, consistent and personal engagement with engagement lead will drive

customer focussed change

Transformation of the prequalification readiness programme to support

applicants through their submissions

Targeted engagement with events, webinars and communications more relevant

to customer groups or individual organisations

Improved, plain English guidance for pre-auction, auction and delivery processes

Enhanced support through the disputes process from the engagement lead,

acting as primary point of contact

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Delivery Body

The new CM team structure is designed to

deliver improved customer experience…

Matt Magill Capacity Market Manager

Laura Brock CM Implementation Manager

Chris Thackeray CM Delivery Manager

Ian Nicholas CM Delivery Manager

Tim Dart

Vikas Garg

Dave Williams

Faye Purchase

Richard Griffiths

Tim Gregory

Tushar Singh

Charlotte Watts Emily Hirst

Helen Mukkara

Vacancy

Vacancy

CM Front Desk

Heather Stratford

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Delivery Body

Operational plan

July 17 Aug 17 Sept 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 March 18 April 18

Prequalification Submissions Window (10 weeks)

Prequalification Assessment Window (6 weeks)

13 Nov – 1 Dec Tier 1 Disputes Window

24 July – 29 Sept

2 Oct – 10

Nov

1st Dec Credit cover deadline 1*

22nd Dec Credit cover deadline 2**

30th Jan T-1 2018/19 Auction

6th Feb T-4 2021/22 Auction

Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line.

BEIS overview – regulatory consultations

Arran Mornin

Vision and Objectives

BEIS Capacity Market

Consultation –

improving the framework

Arran Mornin

Head of Capacity Market Operations

Energy Security Team

August 2017

Details of the consultation

• The consultation was issued 24th July https://www.gov.uk/government/consultations/capacity-market-

consultation-improving-the-framework-detailed-proposals • Please respond with specific answers to the questions below by 8th

September, detailed drafting of SPD termination event and Storage de-rating will be released within the next few weeks to allow participants to comment before the end of consultation

• Handouts with the consultation questions have been circulated, let us know if you don’t have a copy

• Please direct all consultation responses to [email protected] • All consultation proposals are intended to be forward-looking. They would

not apply to current agreements and we envisage they would be in place ahead of the T-1 and T-4 auctions early in 2018

https://www.gov.uk/government/consultations/capacity-market-consultation-improving-the-framework-detailed-proposals















mailto:[email protected]

Upcoming events

• Storage de-rating workshop: this afternoon • Extra storage de-rating workshop: Tuesday 15th

August – Opportunity to submit written comments to NG by

22nd August

• BEIS Policy workshop on Tuesday 5th September – details to follow shortly

Storage de-rating factors Issue

• Ensuring delivery of capacity with changing technology

• 2016 T-4 Capacity Market (CM) auctions saw battery storage win agreements for the first time (around 500MW)

• The government believes that flexible technologies such as storage and DSR have a vital role to play in ensuring the UK has a secure, affordable and clean energy system now and in the future

• There is a mismatch between the duration that most batteries will be able to output for compared to the forecasted duration of stress events

• Initial estimates from National Grid suggest that stress events, if they do occur, could last up to two hours on average, although few are expected to last more than four hours

• The displacement of enduring capacity with short duration batteries risks undermining security of supply

Storage De-rating factor

30 mins maximum X%

1 hour maximum X%

1 hour 30 maximum X%

…. …

Proposal • De-rate storage according to the duration it can generate at its full connection capacity before recharging • Storage technology class to be split into categories differentiated by duration • Self-selection of duration category at pre-qualification with verification through new arrangements for

SPDs – transitional arrangements in place this year • Two proposals for assurance, to be implemented together or separately:

• OEM guarantee • Full capacity demonstrations

• DRFs to be based on Equivalent Firm Capacity (EFCs), factoring in the existing market penetration, technical reliability, and interactions with other commercial revenue streams as appropriate. Further consultation on this will be carried out by NG

Storage de-rating factors

Metering and DSR test deadlines Issue

• Ensuring delivery of capacity • Current metering and DSR test deadlines when applied to T-4 auctions mean we do not have an opportunity

to replace any lost capacity through the T-1 auction • High failure rate of Unproven DSR observed to date – 30% of TA DSR capacity

Proposal

• Bring forward metering and testing deadlines so that Unproven DSR secured through a T-4 auction fails early and to a timeframe which allows us to make good any shortfall by adjusting capacity targeted in the T-1 auction

• Ofgem proposal on DSR asset reallocation should help address likely aggregator concerns • Looking to explore any other proposals that industry has to ensure delivery

Deadline description Current deadlines

(Time before Delivery Year) Proposals

Date within T-4 schedule

Metering assessment 4 months 21 months 15 January

Metering test request

Metering test submission 2 weeks 18 months 1 April

DSR test 1 month 13 months 1 Sept

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Satisfactory Performance Days

Termination Event Issue • CMUs must complete three SPDs during winter of the relevant delivery year (Rule 13.4.1) • Failure results in suspension of capacity payments until three further SPDs are completed • Consequence is that a CMU can retain a capacity agreement indefinitely despite failing to demonstrate that it is

capable of fulfilling its obligations

Proposal (for T-1 18/19 agreements and T-4 2021/22 agreements onwards) • CMUs must complete three SPDs during winter of relevant delivery year, at least one of the three must be

demonstrated in the period January to April • Failure results in suspension of capacity payments until three further SPDs completed, in the same delivery year • Failure to demonstrate the further SPDs results in the obligation being terminated • Termination fee is set at TF5 (£35k/MW), equivalent to loss of TEC • Providers are able to ask National Grid to reconsider the termination, and appeal the termination to Ofgem or

the Secretary of State • Incorporating changes to termination events and portfolio amendments made by Ofgem in recent consultation • Government will be releasing indicative drafting that explains interaction with Secondary Trading

Metering re-assessment Issue

Metering re-assessment is not envisaged in CM rules and regulations and this poses a problem when: • A Capacity Provider wishes to change its metering configuration • A Capacity Provider makes mistakes in its first application for a metering

assessment Proposal

• We want to enable Capacity Providers to go through re-assessment and therefore provide more flexibility and align legislation to the policy intent made clear in the March FAQ








Planning consent

Issue • The T-4/T-1 planning consents deadline falls between Christmas and New Year’s Eve • The applicant must submit to the DB the declaration by no later than the date falling 22

working days prior to the commencement of the first bidding window • On the date falling 16 working days prior to the commencement of the first bidding

window the DB must notify the applicant in relation to each CMU to state if it has prequalified or not

Proposal • We intend to shift this deadline to January to provide more flexibility to NG and avoid a

significant amount of time during the period between Christmas and New Year’s Eve.

Generating Technology Class Issue • Ofgem has consulted on adding Generating Technology Class to the public CM register • To make this resource as useful as possible we will seek to partly disaggregate the current

technology classes to ensure that plant types are appropriately captured

Proposal • Improving the recording of information in much the same way we are doing for Primary Fuel

Type • Splitting grouped technology types to aid analysis. For example, OCGTs and reciprocating

engines are currently grouped together

Current Technology Class Proposal

Coal/Biomass Coal

Biomass

Energy from Waste

OCGT and Reciprocating Engines Reciprocating Engines

OCGTs

Indicative proposed split:

BEIS Capacity Market Consultation-

Improving the framework

Please direct all consultation responses to

[email protected]


Housekeeping

Rule changes

Ofgem

10 August 2017

Johannes Pelkonen

Ofgem’s CM Rules change process

1. The CM Rules change process

2. 2016-17 CM Rules change process

3. Ofgem’s other roles in the CM

4. Next steps

5. Questions

Overview of CM governance

CM Regulations

CM Rules

BEIS manage Regs and also change Rules

Ofgem manage Rules

Overarching design

Practical / policy detail on how the CM operates

The CM rules change process

Open letter inviting proposals

Form and guidance available on our

website

Receipt of proposals (all published online)

Consideration of proposals submitted by

stakeholders – analytical process

Ongoing work on our own proposals

Consultation

Review of consultation responses, refinement of drafting, and final

decisions

Laying before Parliament

Implementation by NGET and ESC

2016-17 CM Rules change process

79 industry proposals received

4 Ofgem proposals Consultation in

March 41 responses

Decision in July 21 amendments, 4 to consider further

Consolidated Rules published in late

July

• Handling disputes, including for prequalification and termination decisions

• Monitoring and taking enforcement action if needed

• Overseeing NGET’s delivery of EMR roles, including financial incentives

• Reporting on the operation of the CM and the performance of NGET – 2 annual reports

• Receiving Price Maker memoranda

Ofgem’s other CM roles

• 2017-18 CM Rules change process to begin in near future

• Open letter will be published during Q2

• We look forward to your proposals

• Don’t be afraid to engage with us early

Next steps

Contact: [email protected]



Electricity Capacity Report 2017

Duncan Rimmer

Agenda

Summary

Modelling developments since 2016 ECR

Recommended capacity to secure for 2021/22


Interconnected country de-rating factor ranges for 2021/22

Conventional plant de-rating factors

Questions

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Summary

Summary – the why and what Licence obligation to submit Electricity Capacity Report (ECR) to BEIS before 1st June. ECR published

on 7th July

This year’s ECR contains two capacity requirement recommendations for 2018/19 (T-1 auction) and 2021/22 (T-4 auction)

To reflect the risks around early coal closures, embedded benefits and unproven DSR, our modelling continues to include non-delivery sensitivities

Enhancements this year include over-delivery sensitivities representing additional imports and capacity staying open without a CM contract.

Modelling scrutinised by BEIS, Ofgem & BEIS’s Panel of Technical Experts (PTE)

We also provide in the ECR conventional plant de-rating factors and ranges of de-rating factors in 2021/22 for interconnected countries

The Secretary of State determines:

the capacity to secure and, for 2021/22 the split between T-4 and T-1 auctions

the auction parameters including the demand curve

individual interconnector de-ratings for use in the CM auctions

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Summary – capacity to secure key points ECR uses probabilistic modelling of a range of scenarios and sensitivities and a Least Worst Regret (LWR) decision tool to

select recommended capacity to secure:

Recommendation for 2021/22 is 50.5 GW compared to 49.7 GW for 2020/21 in 2017 ECR

Covers 19 out of 24 cases modelled (including all FES and up to 2 GW non-delivery). Secretary of State’s decision consistent

with recommendation. He decided to hold back 0.4 GW for the T-1.

Recommendation for 2018/19 (6.3 GW) significant increase over the 2.5 GW held back in 2014 for the T-1 auction, but less

than the 7.3 GW indicative target in the 2016 ECR

Covers 17 out of 26 ̃cases modelled. Secretary of State decided to target 6.0 GW as per PTE’s recommendation. This is within the confidence interval of the calculation

*2018/19 secured figure allows for known CM contract cancellations and connection capacity higher than de-rated TEC ^2018/19 requirement excludes interconnection as interconnectors not allowed to participate. 2.1 GW imports assumed at peak in 2018/19 ˜ Including 3 out of 4 FES scenarios and sensitivities up to 1.2 GW non-delivery, but excluding Two Degrees , low availability and cold winter

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Year Base Case Eligible

Capacity Requirement

(GW)

Capacity already

secured (GW)

Assumed non-

delivery in LWR outcome (GW)

Recommended

requirement (GW)

Secretary Of

State’s Decision (GW)

2021/22 (T-4) 52.8 -4.3 +2.0 50.5 50.1 (T-4)

0.4 (T-1)

2018/19 (T-1) 51.6 ̂ -46.5* +1.2 6.3 6.0

Summary – de-rating factors We provide range of interconnected countries’ de-rating factors from which Sec. Of State decides de-rating factor for each

interconnector to use in the CM for 2021/22

Top of range based on National Grid’s Bid3 modelling. Bottom based on Pöyry's historical modelling (France, Netherlands

and Belgium) or Bid3 modelling (Norway and Ireland). Decision includes adjustment for technical availability

Conventional plant de-rating factors generally similar to or slightly higher than 2016

Project in progress for summer to investigate de-rating factors for energy limited storage – separate session this afternoon

set aside for this.

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Country 2021/22

(2017 ECR)

2020/21

(2016 ECR)

2019/20

(2015 ECR)

2017/18

(2016 ECR) Interconnector Decision

(2021/22)

France 48-80% 45-88% 50-70% 45-86% IFA (2 GW)

IFA 2 (1 GW)

Eleclink (1 GW)

63%

65%

69%

Ireland 29-98%* 25-50% 2-10% 2-58% Moyle (0.5 GW)

EWIC (0.5 GW)

14%

59%

Netherlands 75-81% 70-82% 62-80% 70-82% Britned (1.2 GW) 76%

Belgium 65-85% 65-92% 58-70% n/a NEMO (1 GW) 75%

Norway 92-99% 76-96% n/a n/a NSL (1.4 GW) 85%

* The 2021/22 range for Ireland not adjusted for import constraints.

Modelling developments since 2016 ECR

Summary of modelling developments since last year

Additional / Expanded sensitivities

Non-delivery sensitivities account for new policy risk (PTE recommendation 21) on embedded benefits, observed non-delivery of unproven DSR as well as coal closure risk

Inclusion of over-delivery sensitivities representing additional imports and capacity staying open without a CM contract.

Interconnector modelling

Development of in-house pan-European modelling of interconnector flows (PTE recommendation 13) via procurement of Pöyry’s Bid3 pan-European model

Investigation into alternatives to Least Worst Regret (LWR)

Review of strategy and sensitivity probabilities (PTE recommendations 17 & 25) led to hybrid approach (discussed in ECR Annex). Not utilised as no material impact

Use of distributed generation (DG) data (Electralink)

Acquired DG data (PTE recommendation 22). Limited use due to capacity data quality issues. Some use in non-CM de-ratings and demand forecasts

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2021/22 – LWR decision from range CM eligible capacity is total capacity minus capacity receiving support via RO, CfD or FiTs

The chart shows the level of CM capacity required in each scenario and sensitivity to meet the Reliability Standard of 3 hours LOLE in 21/22.

It excludes any CM plants with 3, 12, 14 or 15 year contracts from the18/19, 19/20 and 20/21 T-4 auctions assumed to operational in 2021/22

LWR outcome and recommendation is 50.5 GW (requirement for 2G MW non-delivery sens)

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2021/22 waterfall from 2020/21

49.7

48.5

50.5

-2.0

-0.3-0.0

-4.4

+3.5

+1.0

+0.4

+0.5

+0.1

+2.0

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46

47

48

49

50

51

52

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2020/2021requirement (BC

Non Delivery2000)

Non DeliveryAssumed InSensitivity

PreviouslyContacted2020/2021

ACS peakdemand

Reserve reqt(largest infeed

loss)

Derated margin Non-CMcapacity,

ROC/CFD

Non-CM Autogen Previouslycontracted2021/2022

Assumed NonDelivery in Base

Case

Base Case2021/22

requirement

Least WorstRegret Decision

(Non deliveryscenario 2000)

LWR 2021/222recommendation

Cap

acit

y t

o p

rocu

re, G

W

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The following waterfall chart shows how the original 49.7 GW recommendation for 2020/21

(derived from the 2016 Base Case 2 GW non-delivery sensitivity) has changed into total

CM-eligible requirement of 50.5 GW (derived from the 2017 Base Case 2 GW non-delivery

sensitivity):

2021/22 – key points Sensitivity range 46.2 - 52.5GW (lowest: Slow Progression, highest: Non-delivery 4 GW)

For 2021/22, we recommended a target capacity of 50.5GW, a small increase (0.8 GW) on the 2020/21 recommendation in the 2016 ECR

This small increase is the result of following upsides and downsides:

Upsides - higher Base Case peak demand, lower assumed non-CM autogeneration, slightly higher de-rated margin,

slightly lower assumed renewable de-rating factors

Downsides - higher previously contracted capacity in Base Case, reduction in reserve for largest infeed loss, slightly

higher renewable capacity (matching reduction in de-rating factors),

The inclusion of non-delivery sensitivities has ensured uncertainty has been addressed and resulted in a similar level of security of supply to other years

Secretary of State decided to target 50.5 GW for 2021/22, consistent with the recommendation in the ECR

Secretary of State decided to hold back 0.4 GW for T-1 auction leaving 50.1 GW target for the T-4 auction.

Pre-qualification to determine adjustments required e.g. opted out plant that will remain operational or plants with different closure assumptions to the Base Case

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2018/19 – LWR decision from range

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The chart shows the level of CM capacity required in each scenario and sensitivity to meet

the Reliability Standard of 3 hours LOLE in 2018/19.

It excludes CM plants with contracts from the 18/19 T-4 auction assumed to operational in

2021/22

LWR outcome is 6.3 GW (requirement for 1.2 GW non-delivery sensitivity).

2018/19 waterfall from original 18/19 T-1 requirement

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The following waterfall chart shows how the original 2.5 GW set aside for the 2018/19 T-1

auction (derived from the 2014 Slow Progression Low Availability sensitivity) changed into a

recommendation of 6.3 GW (derived from the 2017 Base Case 1.2 GW non-delivery

sensitivity):

2.5

5.1

6.3

-0.2

-2.1

-2.0

-0.7

+1.1

+2.1

+1.7

+2.7

+1.2

0

2

4

6

8

10

12

2014 ECRoriginal T-1

requirement (fromSP Low Avail.

Sensitivity)

ContractedCapacity -

Derated TEC

Opted out andoperational plant

Existingcontracted plantnon-delivery in

base case

ACS peakdemand

Derated margin(derating factorslow availability)

Interconnectorflow

Non-CM capacitychange

Additional T-4capacity due to

low clearing price

Base case 2017ECR T-1

requirement

Least WorstRegret Decision

(Non deliveryscenario 1200)

LWR 2018/2019Recommendation

Cap

acit

y to

secu

re, G

W

2018/19 – key points

Sensitivity range 3.4 GW - 7.9 GW (lowest: Warm Winter, highest: Non-delivery 2.8 GW)

18/19 T-1 auction recommendation has increased from that originally set aside by the Secretary of State in 2014 from

2.5 GW to 6.3 GW

This is due to the following upsides & downsides:

Upsides - “opted out but operational” plant closing or opting in, non-delivery of contracted plant, connection capacity being

higher than TEC and higher end user demands due to additional distribution connected plant, wider sensitivity range than in 2014 ECR

Downsides – Additional distribution plant being non-CM, additional capacity procured in T-4 auction above target and higher

import assumptions

Imports have increased based on the interconnector de-ratings utilised for 17/18 and 19/20 auctions as opposed to the

original float assumption

The inclusion of non-delivery sensitivities have increased the recommendation since 2014 as the T-4 analysis didn’t

include such sensitivities

Secretary of State decided to target 6.0 GW as per PTE’s recommendation. This is still within confidence interval of the

calculation of the recommended capacity.

Pre-qualification to determine adjustments required e.g. opted out plant that will remain operational or plants with

different closure assumptions to the Base Case

50

Interconnected country de-rating factor ranges

Country de-rating factor ranges

France, Netherlands, Belgium France: 48 to 80

Netherlands: 75 to 81

Belgium: 65 to 85 52

Country de-rating factor ranges

Ireland, Norway

Ireland: 29 to 98

Average of FES simulations sets the top of the range for Ireland. The bottom of the range is set by Base Case Low Ireland. It is not appropriate to use the history to set the bottom of the range because none of the forecast sensitivities are as low.

Norway: 92 to 99

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Conventional plant de-rating factors

2017 Conventional plant de-rating factors

Technology class Plant types included 2018/19 T-1 2021/22 T-4

Oil-f ired steam generators Conventional steam generators using fuel oil 88.04% 88.04%

OCGT and reciprocating engines (non-

autogen.)

Gas turbines running in open cycle f ired mode

Reciprocating engines not used for autogeneration 94.81% 94.81%

Nuclear Nuclear plants generating electricity 85.24% 85.24%

Hydro

Generating Units driven by w ater, other than such units:

(a) driven by tidal f low s, w aves, ocean currents or geothermal sources; or

(b) w hich form part of a Storage Facility

87.92% 87.92%

Storage

Conversion of imported electricity into a form of energy w hich can be stored,

the storing of the energy w hich has been so converted and the re-

conversion of the stored energy into electrical energy

Includes hydro Generating Units w hich form part of a Storage Facility

(pumped storage hydro stations).

96.11% 96.11%

CCGT Combined Cycle Gas Turbine plants ‘88.54% 90.00%

CHP and autogeneration Combined Heat and Pow er plants (large and small-scale)

Autogeneration – including reciprocating engines burning oil or gas 90.00% 90.00%

Coal / biomass / w aste Conventional steam generators using coal or biomass or w aste 87.58% 87.58%

DSR 86.34% 86.34%

55 We are keen to hear your feedback on how we determine conventional plant de-rating factors.

Should we continue with / evolve the current approach or should we do something different?

Prequalification readiness and milestones

Dave Williams and Faye Purchase

57


Delivery Body

Prequalification

Timeline

Upcoming milestones

Prequalification readiness surgeries

Themes from surgeries so far

Feedback from surgeries

58


Delivery Body

Prequalification timeline

24 July

Prequalification window opens

29 September

Prequalification window closes

2 October

Prequalification assessments begin

24 July – 22 September

Prequalification readiness “surgeries”

25 – 29 September

Final week of Prequalification

window

59


Delivery Body

Upcoming milestones

Milestone Date

Prequalification submissions window of 10 weeks

24 July – 29 September

Prequalification assessments will last for 6 weeks

2 October – 10 November

Tier 1 disputes 13 November – 1 December

T-1 2018/19 Auction 30 January 2018

T-4 2021/22 Auction 6 February 2018

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Delivery Body

Prequal readiness surgeries

A face-to-face meeting with members of the CM team

Delivered in locations suited to you

Surgeries allocated on a first come, first served basis

One surgery per company

Make the most of your sessions – Pre-requisites

Spaces still available

61


Delivery Body

Themes of queries from surgeries so far

Connection

agreements

Planning

consents Auxiliary load

Extended

Years Criteria

Metering

arrangements

Primary Fuel

Type Credit cover

62


Delivery Body

Feedback from surgeries

Prequalification

Guidance

Come with

questions

94% increased

confidence in their

Prequalification

Application

"Most stressful

thing I've done in

my life (CM)"

"This approach is

the best thing

you've done so

far"

"I'm pretty sure

that if I didn't come

here I would have

made mistakes"


Auction Readiness and Secondary Trading

Vikas Garg

64


Delivery Body

Agenda

Auction Guidelines

Secondary Trading and Volume Reallocation

Questions

65


Delivery Body

Auction Guidelines

66


Delivery Body

Auction Parameters

Parameter T-1 (2018/19) T-4 (2021/22)

15 year threshold n/a £260/kW

3 year threshold n/a £130/kW

PriceCap £75/kW/yr £75/kW/yr

NetCone £49/kW/yr £49/kW/yr

Price Taker Threshold £25/kW/yr £25/kW/yr

Target Capacity 6GW 50.1GW

Capacity at the price cap Target capacity -1.0GW Target -1.5GW

Capacity at £0/kW/year Target capacity +1.0GW Target +1.5GW

67


Delivery Body

Capacity Demand Curve

05

1015202530354045505560657075

43,500 44,500 45,500 46,500 47,500 48,500 49,500 50,500 51,500 52,500

£/k

W/Y

Capacity Demand (MW) Target Capacity at Net CONE T-1 6GW

Price Cap

Price Taker

Threshold

68


Delivery Body

R1

R2

R3 R4

R5

R6

R7

R8

R9

All in at Price

Cap

Supply reduces as price drops

Auction Clears

when supply meets Demand

Capacity Demand Curve

69


Delivery Body

Auction Process

Eligible participants who do nothing at auction will get an agreement

at the clearing price

Exit bid takes you out of the auction (unless your exit bid is equal or

less than the clear price)

Duration Bid amendment used to change agreement length (to 1

year)

Duration Bid amendment used to change from refurb to pre-refurb

Auction System is internet based

70


Delivery Body

Auction and Delivery year timeline

Dec1

4

Jan

15

Dec 15

Jan

16

Oct

16

Dec

16

Jan

17

May

17

Oct

17

Dec

17

Jan

18

Oct

18

Dec

18

Jan

19

Oct

19

Dec

19

Jan

20

Oct

20

Dec

20

Jan

21

Oct 21 Dec

21

Jan

22

CM delivery year1 18/19

CM delivery year 1 19/20

TA delivery year 16/17

TA delivery year 17/18 TA Auction

CM delivery years 2-15

CM delivery years 2-15

(18/19) T-1

(19/20) T-1

EA delivery year 17/18 EA Auction

TA/EA

T-4 2018/19

T-4 2019/20

CM delivery year 1 20/21

CM delivery

years 2-15

T-4 2020/21

(20/21) T-1

CM delivery year 21/22 T-4 2021/22

(21/22) T-1

71


Delivery Body

Auction results to date

T-4 2018/19 £19.40

T-4 2019/20 £18.00

T-4 2020/21 £22.50

TA1 2016/17 £27.50

TA2 2017/18 £45.00

EA 2018/19 £6.95

72


Delivery Body

Overview of typical auction

T-10 wks T-4wks Auction T+20

Prequalified

for Auction

Training

-web based

screen cast

Auction

results

Participate

in auction

Bidder setup

Passwords +

PIN

Confirmation

s at T-15 to T-

10

Auction

Monitor

Report

(Clear+2)

Capacity

Agreement

Notice

Participate

in Mock

auction

73


Delivery Body

Secondary Trading

74


Delivery Body

CM obligation hedging options

Auction participants with a

Capacity Agreement may

be unable to deliver

(planned or forced

outages) have the

following options to hedge

position;

1. Physical secondary

trading (ex ante)

2. Volume Reallocation

(ex post)

3. Parties are free to

procure a financial

product outside of the

Capacity Market

mechanism.

75


Delivery Body

Secondary Trading - Requirements

Minimum requirements required for Transferor and Transferee

Min time period 1 day

Min volume 2MW

Can carry out multiple transfers - within de-rating

The holder of an obligation across winter (even 1 day) will need to prove

Satisfactory Performance Days - NB If full delivery year traded out then SPD not required

76


Delivery Body

Secondary Trade – who?

An Acceptable Transferee is any of the following:

Prospective CMU that has achieved the Substantial Completion Milestone prior

to the Delivery Year *

A Capacity Provider of a CMU that Prequalified but does have a Capacity

Agreement *

CMU Opted-out at the T-4 Auction and has since Prequalified in the T-1

An Eligible Secondary Trading Entrant (table discussion)

*most likely scenario

77


Delivery Body

Early Auction delivery year

April May June July Aug Sep Nov Dec Sep 18

Oct

2017

Webinar and training material

launch

Secondary Trading Entrant - apply to prequalify for ST

(not during auction prequalification)

Secondary Trading Contact details published

Secondary Trade Registration to DB

Auction PQ

Volume reallocation

Trading Timeline

78


Delivery Body

Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Aug Sep Oct A Transferor

B Transferee CM Obligation

Winter Outage Feb, March,2018

Acceptable Transferee -takes

on the Mar, April obligation

Stress Event Responsibilities Event 1 Party A

Event 2 Party B

Event 3 Party A

1 2 3

CM obligation CM obligation from trading

Stress event

Transfer Must be

initiated at least

5Wd before start of

period

CM Obligation

Secondary Trading example

79


Delivery Body

Why trade?

Value of obligation trading;

For every HH non-delivered (during a stress event) lose

= 1x 24th annual payment

In any month max loss is capped at 2 months payments

(i.e. 4HH non delivery in a stress event)

Delivery year max loss = 100% capacity payment

80


Delivery Body

Volume Reallocation

81


Delivery Body

Volume Reallocation

Ability to cover obligation post stress event with registered participant.

Meet the acceptable transferee requirements

Register to be CMVR registered participant in advance of delivery

period

Capacity volume register updated WD10

Allocate volume to Submit a CMVRN WD 11-19

82


Delivery Body

Volume Reallocation

Compliments of EMRS

Agreement management processes

Emily Hirst

84


Delivery Body

Key milestones: Pre - Auction





24 July – 29 Sept

2 Oct –

10 Nov

1st Dec Credit cover deadline 1

22nd Dec Credit cover deadline 2



85


Delivery Body

Key milestones: Pre - Auction and Agreement Management





24 July – 29 Sept

2 Oct –

10 Nov

1st Dec Credit cover deadline 1

22nd Dec Credit cover deadline 2



31st Aug Metering

Assessments: DSR CMUs

31st Aug DSR Tests

1st Oct start of Delivery Year

Deadline for demonstrating Satisfactory Performance 30th April

15th Aug 6 monthly reports

1st Oct SCMs for EA 2017 Prospective CMUs

21st Nov FCMs for T-4 2020/21 Prospective CMUs

30th Sept Metering

Assessments: Prospective CMUs

86


Delivery Body

Six monthly construction progress reports

Prospective CMUs with agreements in the 2017 EA must submit the

construction progress report documents by the 15th August.

Update on Construction Milestones, a report from an Independent

Technical Expert, and a certificate from 2 directors of the Applicant

company. Upload documents to the EMR portal.

We will check the Construction Milestone dates and report any issues to

BEIS, with a focus on MW at risk.

Who needs to

complete?

What is

required?

What will the

Delivery Body

check?

15th Aug six monthly construction report deadline for EA 2017 CMUs

87


Delivery Body

Metering Assessments

Upcoming deadlines are for Unproven DSR and New Build CMUs

with EA 2017/18 and TA 2017/18 agreements.

Answer the questions on the EMR Portal and upload Single Line

Diagram.

The DB will assess the requirement for a Metering Test.

Who needs to

complete?

What is

required?

What will the

Delivery Body

check?

31st Aug Metering Assessment deadline: Unproven DSR CMUs

30th Sept Metering Assessment deadline: Prospective

CMUs

88


Delivery Body

DSR Tests

Who needs to

complete? Unproven DSR CMUs with EA 2017/18 and TA 2017/18 agreements.

Before requesting a DSR Test via the EMR Portal, please ensure data

flows are set up with EMRS.

The DB will inform the control room and request the metered data from

EMRS. Once received, we will perform the DSR Test analysis.

What is

required?

What will the

Delivery Body

check?

31st Aug DSR Test deadline

89


Delivery Body

Substantial Completion / Financial Commitment Milestones

Prospective CMUs

with EA 2017/18

agreements.

90% of AACO

achieved, metering

assessment complete.

Check and update, if

required, the AACO.

Who needs to

complete

SCM?

What is

required?

What will the

Delivery Body

check?

Prospective CMUs

with T-4 2020/21

agreements.

10% of total project

spend and major

contracts entered into.

Check against Prequal

application to ensure

£/kW threshold is met.

Who needs to

complete

FCM?

What is

required?

What will the

Delivery Body

check?

1st Oct SCM deadline for EA 2017 CMUs

21st Nov FCM deadline for T-4 2020/21 CMUs

90


Delivery Body

Satisfactory Performance Monitoring

All CMUs participating in each Delivery Year

Submission of 3 separate dates on which the CMU met the capacity

obligation between 1st October and 30th April

The DB will request the metered data from EMRS. Once received, we

will compare the output to the AACO and let you know the outcome via

the EMR Portal.

Who needs to

complete?

What is

required?

What will the

Delivery Body

check?

Deadline for demonstrating Satisfactory Performance 30th April


Metering, EMR Aggregations and Volume Reallocation

EMRS

Volume Reallocation

10 August 2017

Joy Nnamani and Abdal Hussain

Public

Disclaimer

Please note that whilst this document has been prepared with due care

by EMR Settlement Limited on behalf of the Low Carbon Contract

Company and the Electricity Settlement Company Limited , EMR

Settlement Limited, Low Carbon Contract Company and Electricity

Settlement Company Limited do not make any representation, warranty

or undertaking, express or implied, in relation to the completeness and

or accuracy of information contained in this document, and accordingly

EMR Settlement Limited, Low Carbon Contract Company and Electricity

Settlement Company Limited shall not be liable for any damages

resulting from the use of this information or action taken in reliance on

it.

Capacity Market Coordination Event_10 August 2017

• Overview

• Volume Reallocation Scenario

• Timetable

• Capacity Volume Register

• Capacity Market Volume Reallocation

Notification

• Notifications from EMRS

• Settlement

Volume

Reallocation


Overview Volume Reallocation and parameters are covered in Chapters 8 and 10 of the

Capacity Market Rules.

A process where Capacity Providers may reallocate volume (in MWh) for any Settlement

Period that is part of a Stress Event from one over-delivering CMU to another under-

delivering CMU.

Capacity Providers have the opportunity to reduce the amount of Penalty Charges they

owe.

Volume reallocation window opens 10 Working Days after the end of a month in which a

Stress Event occurs.

Capacity Providers who have over or under delivered may trade volume between each

other.


Eligibility

Capacity Agreement

holders are eligible to take

part in volume reallocation

during the Delivery Years

that they hold an

agreement.

The Capacity Market Rules

Amendment 2017, opened

up volume reallocation to

Capacity Providers who do

not hold an agreement for

that Delivery Year.

Pre-requisites to become a CMVR Registered Participant with the Delivery Body:

Successfully prequalified*; or

Qualified as Secondary Trading Entrants.

EMRS require Capacity Providers to have completed:

Capacity Provider Registration;

Validated Aggregation Rules; and

Approved Metering.

* Substantial Completion Milestone (SCM), Proven DSR Capacity and Metering Assessment – Full details in the Delivery Body guidance on Volume Reallocation Registration.

Responsibilities


EMRS Delivery Body Capacity Providers

Publish the Capacity Volume Register (CVR)

Identify acceptable transferees Identify CMUs to trade with

Receive, match and validate trades Maintain a register of Capacity Market Volume Reallocation Participants

Complete and submit CMVRNs

Republish the CVR every day with new positions while the reallocation window is open

Pay Penalty Charges for any outstanding Under-Delivery volume

Calculate and invoice for Penalty Charges and Over-Delivery payments when the window closes.


Volume Reallocation Scenario Stress Events have occurred at periods 1, 2 and 3 in the Delivery Year.

CMU A under-delivered during 2 and 3.

CMU B over-delivered during all three Stress Events.

CMUs agree to trade, CMU B Over-Delivery in period 3 to make up CMU A shortfall.

CMU A and B complete and send Capacity Market Volume Reallocation Notification Notices

to EMRS to volume reallocate.

CMU B

(CMVR Transferor

)

CMU A

(CMVR Transfere

e)

EMRS

Validate and

match

MWh, per Settlement Period


Timeline for Volume Reallocation

Capacity Volume Register

Capacity Volume Register includes:

Capacity delivered by a CMU (i) during

the Settlement Period (j), (E);

Adjusted Load Following Capacity

Obligation (ALFCO);

(if any) Initial Over-Delivery Volume

(IOD);

(if any) Initial Under-Delivery Volume

(IUD);

Aggregated traded Capacity Market

Volume (ACMV); and

Adjusted metered output (AE), which is

equal to E plus ACMV.


Settlement Date Settlement Period CMU ID E ALFCO IOD IUD ACMV AE27/04/2017 33 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 33 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 34 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 34 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 35 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 35 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 36 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 36 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 37 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 37 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 38 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 38 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 39 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 39 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 40 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 40 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 41 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 41 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 42 ENG_01 300.02 200 100.02 0 -100.02 20027/04/2017 42 GEN_12 0 120 100.02 19.98 100.02 100.0227/04/2017 43 ENG_01 197.48 100 97.48 0 -97.48 10027/04/2017 43 GEN_12 0 110 97.48 12.52 97.48 97.4827/04/2017 44 ENG_01 197.48 100 97.48 0 -97.48 10027/04/2017 44 GEN_12 0 110 97.48 12.52 97.48 97.4827/04/2017 45 ENG_01 197.48 100 97.48 0 -97.48 10027/04/2017 45 GEN_12 0 110 97.48 12.52 97.48 97.4827/04/2017 46 ENG_01 197.48 100 97.48 0 -97.48 10027/04/2017 46 GEN_12 0 110 97.48 12.52 97.48 97.48


Format This illustrates the format of the Capacity Market Volume Reallocation

Notification (CMVRN).

Cell reference A B C

1 [EMR Party ID of the Company who is submitting]

2 CMVRN_[transferor CMU ID]_[transferee CMU ID]

3 [From EMR Party ID] [CMU ID] 4 [To EMR Party ID] [CMU ID] 5

[Settlement Date e.g. 27/04/2016] [Settlement Period e.g. 33] [volume to 3 d.p. e.g.-100.025]

[repeat for each Settlement Period] [repeat for each Settlement Period] [repeat for each Settlement

Period]


Things to remember! When completing a Capacity Market Volume Reallocation Notification

(CMVRN), worth remembering the following:

Trading CMUs must each submit CMVRNs with matching data items

The volume in the transferor’s file should always be negative and the volume in the

transferee’s file should always be positive

You can include multiple Settlement Periods in one CMVRN

Volume should be expressed in MWh

An initially over-delivering CMU cannot trade an amount so that their remaining Over-

Delivery exceeds the Initial Over-Delivery Volume or lead to them under-delivering

An initially under-delivering CMU, cannot trade an amount so that their remaining Under-

Delivery exceeds the Initial Under-Delivery Volume or lead to them over-delivering

Completed CMVRNs are emailed to [email protected]


CMVRN Example



Notifications from EMRS Once EMRS has validated the CMVRN’s received, EMRS will confirm:

1. You will receive an email to confirm your trade has been successful or unsuccessful

2. If unsuccessful, the email will contain the reasons why your CMVRN was not accepted

While the volume reallocation window is open you can re-submit the CMVRN.


Timeline for Volume Reallocation

EMRS will calculate and issue Credit Notes for Over-Delivery as soon as practicably possible after the end of the

Delivery Year


Settlement

When the volume reallocation window has closed, EMRS will calculate penalty charges for

CMUs with a remaining Under-Delivery amount.

The invoice will be issued on the 21st Working Day of the month following the month in

which there was a Stress Event.

Over-Delivery Payments are calculated and paid at the end of the Delivery Year

when all Under-Delivery Penalties have been received from Under-Delivering Capacity

Providers.

Under-Delivery Penalty “Pot” is used to pay Over-Delivery Payments.

In the event, no Penalty Payments are received as a consequence of a System Stress

Event then no payments for Over-Delivery are made.


Volume Reallocation

Would you like

to participate in

any testing?

ESC and EMRS would like to give

Capacity Providers the opportunity to

suggest how, if at all, they would like to

test the volume reallocation process.

We’d welcome your feedback.

More information

For Volume Reallocation

WP48 - Volume Reallocation https://www.emrsettlement.co.uk/publications/working-practices/

EMRS Service Desk

[email protected] 020 7380 4333

Volume Reallocation Registration Guidance

https://www.emrdeliverybody.com/cm/home.aspx Capacity Market Coordination Event_10 August 2017

https://www.emrsettlement.co.uk/publications/working-practices/






CM Metering

10 August 2017

Iain Nicoll

Metering Identifiers and Aggregation Rules Metering Pathways

Public


• What is this activity?

• What is the format of the template?

• Let’s go through an example

• How will the process work?

Metering Identifiers

and Aggregation

Rules for the

2017/18 Delivery

Year


What is the activity?

To be able to perform the settlement activity in the Capacity Market EMRS, require the

Metering Systems set up for the CMU.

We need to be able to identify the correct Metered Volumes to be used for each CMU ID and

each CMU Component.

We need to know what we should do with those Metered Volumes to correctly determine the

Capacity Obligation has been met.

Capacity Providers will be asked to complete a template.

A separate template for each Capacity Provider and for each Auction and CMU Category (e.g.

Existing Generating CMUs).

1.Existing Generating and Proven DSR CMUs

2.Unproven DSR, Prospective and Interconnector CMUs

Guidance on how to complete the template will be attached to the email.


What is the format of the template?

• The grey cells will be pre-populated.

Row No.

CMU ID Component

ID Change

Flag Effective

Date Metered

Entity Type Metered Entity ID

Multiplier Distributor

ID LLFC ID

Boundary Point MPAN /

MSID

Balancing Services ID

Address of CMU Component

1 ABCD ABCD01 01/10/2017 123 Main Street,

London, SW12 3DE

Identifies whether

NEW or an Update

Identifies type of

Metering System:

• BMU

• Supplier Settlement

• Non-BSC

• Interconnector

Identifies Metered Volumes via

BMU ID, MPAN, Interconnector

ID. For non-BSC this must

match the CSV file identifier

Identifies shared demand

circuits, ineligible generation

(e.g. low carbon subsidised or

part of another CMU) to be

netted off another Metering

System

Only completed for non-BSC Metering

Systems where the site is embedded within

a site connected to a Distribution System

Allows Line Losses to be applied to Metered

Volumes

Identifies whether the CMU Component

is involved in any Balancing Services

To account for Balancing Services

actions during a Stress Event


Let’s go through an example • One Component making up the CMU that has an Import and Export MPAN

Row

No. CMU ID

Component

ID

Change

Flag Effective Date

Metered

Entity Type Metered Entity ID Multiplier Distributor ID LLFC ID

Boundary Point

MPAN / MSID

Balancing

Services ID Address of CMU Component

1 ABCD001 ABCD001 NEW 01/10/2017 MPAN 1200087654321 1.00 X Power Station, UK

• Complete the pre-populated row for the CMU Component ID for one of the

MPANs

• Insert a second row for the other MPAN and copy the pre-populated details into this row

2 ABCD001 ABCD001 NEW 01/10/2017 MPAN 1200012345678 1.00 X Power Station, UK


How will the process work? The process that will be followed during the Metering Identifiers and Aggregation Rules

activity is outlined below.

EMRS will email Capacity Providers a template per Auction and CMU Category.

CMU ID, Component ID, Effective Date and the address of the CMU Component will be

pre-populated. Any issues with the pre-populated data, please contact the Delivery Body.

Capacity Providers email the completed template to [email protected].

EMRS validate and any issues identified we’ll contact the Capacity Provider to resolve.

EMRS confirm back to the Capacity Provider once successfully validated.

Once all CMU’s are validated both Delivery Body and EMRS upload the required data.

Aggregation Rules will be loaded into the EMR Settlement System.

Any queries please email [email protected].




• Have you started preparing setting

up your metering pathways?

• Set up data flows for your MSIDs

• Do you know the format of the CSV

file for self submission?

• Set up a SFTP account with EMRS to

be able to self submit

• Where is more information

available?

Metering Pathways


Setting up a Metering pathway There are three options: • Balancing Mechanism Units (BMU)

• Supplier Settlement (MPAN)

• Self submission CSV (Balancing Services and

Bespoke)


Settlement Metering

Systems BM Units

EMRS automatically receives

BMU data via the Settlement

Administration Agent.

Capacity Provider has to take

no action.

If the BMU is being split the

CMU becomes Bespoke and the

self submission pathway must

be used.

MPANS

Capacity Provider must contact the Supplier to

establish the data flows.

You may require to do this for both the Import

and Export MPAN. These may have different

Suppliers.


Format of the CSV file Defined CSV format must be used to uploaded data into the EMR Settlement System. The

CSV file will be checked as part of the Metering Test process.


Setting up an SFTP account To be able to submit CSV files with Metered Volumes for your CMUs you will need to have a

Secure File Transfer Protocol (SFTP) account with EMRS.

Email the Service Desk [email protected] to request a Secure File Transfer

Protocol (SFTP) account and provide the following details:

Contact name

Email address

Mobile number

Within 5 WDs EMRS will issue a username, password and the address of the SFTP site.

Username and password will be sent separately.


More information

For registering as a Capacity Provider and setting up an EMR Party ID: WP22 – Applicant & Capacity Provider Registration

For Metering Pathways and the CSV file:

WP195 – Capacity Market and CFD Metered Data https://www.emrsettlement.co.uk/publications/working-practices/

EMRS Service Desk

[email protected] 020 7380 4333







Capacity Market Notices David Preston

Capacity Market Notices

David Preston – Business Lead, Strategic Projects

10/08/17

Capacity Market Notices

1,700+

subscribers 2 CMNs

31 Oct / 07 Nov

0 EMNs

issued

Website and

Purpose

16/17 Winter

Outturn

Survey

Results

Summary

• gbcmn.nationalgrid.co.uk operational from 01 October 2016

• Designed to increase awareness of tight system, not a dispatch tool

• Some evidence of change in behaviour but likely to be consistent with what would be expected with TRIAD warning

• Difficult to draw conclusions of appropriateness of CMN process to date

• Generally benign winter, further supported by SBR contingency

• 17/18 to be more representative as first discrete CM only period

• Elexon introduced new System Warning Alert service

http://www.gbcmn.nationalgrid.co.uk/

Failed CMN on 20 June

124

CMN Cancellation published in isolation at 15:08 on 20 June ‘17

CMN website updated with Message from SO at 15:51

Linked to an Emergency Preparedness Exercise with DNO

Failure tracked to website certificate authentication issue

Issue fixed, enhanced monitoring, general lessons learned

Business Process, Systems and Emergency Exercise reviews

Discussion with Ofgem re CM Rules and Emergency Exercises

Future of Capacity Market Notices

125

No change to CMNs in 2017 CM Rules

Conscious of call for additional CMN data

Concerned about potential confusion with other information

CMN remains simple tool, not a dispatch for Stress Event

Likely flow of events for true capacity issue (not DCE or LF)

Here to help, inform and discuss options in break / afternoon

Opportunity exists to update FAQs on website as appropriate

Likely signposts prior to capacity challenge

CMN

Triggers

Margin below threshold set out in Capacity Market Rules

Demand Reduction Instruction

Low Frequency

Disconnection

CMN published following unexpected event giving 4 hrs grace

CMN published 4 hours in advance of higher risk period of Stress Event

Day Ahead Within Day Real Time

Wholesale Prices

DA De-rated

Margins (DRM)

8hr

DRM

2 – 14 Day Ahead

Demand

Control Event

1 2 3

Information sources and likely flow of events in advance of Capacity driven challenge

2-14 DA National Surplus Data (peak SP)

Day and Day Ahead Margins (by SP)

Operational Warnings

(EMN, HRDR, DCI)

CMN 4hr, 2hr, 1hr

DRM

Available on BMRS Warming Instructions

on SONAR

De-rated Margins for 31 October 2016

Capacity Market Coordination Event - EMR Portal - … Markets Document...4 Electricity Market Reform...

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