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 National Grid Electricity Transmission
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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
National Grid Electricity Transmission
Capacity Market Operational Plan 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 Electricity Transmission
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Capacity Market Operational Plan
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 prequalification process and the Capacity Market Register Operating business processes to support capacity auctions and prequalification, 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
National Grid Electricity Transmission
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Activities and Milestones T-4 ref
TA ref
1
2
3
4
5
6
Deliverable
Amended Electricity Capacity Regulations in force. DECC publish proposed CM Rule changes. Ofgem CM Rule change consultation opens SoS provides Data and assumptions to the Delivery Body
Ofgem CM Rule change consultation closes Submit Electricity Capacity Report to SoS SoS publishes determination on auctions being held
National Grid Electricity Transmission
Scope
Date requirement from CM Rules/Regs
Amended CM Regulations changes (Interconnectors, metering, settlement) in force. Near final draft of DECC CM Rule changes published. Consultation opens
DSR Transitional Auction
T-4 Auction
Dependencies
Owner
DECC th
By Friday 27 March 2015
By Friday 27th March 2015
April 2015
April 2015
Friday 17th April 2015
n/a
May 2015
May 2015
The SoS provides final data and assumptions to the Delivery Body to enable preparation of the Electricity Capacity Report (ECR) Consultation closes
No later than the 22nd April
Submit report to SoS including a recommendation on the target volume to procure. The SoS determines whether a T-4 auction and DSR TA are to be held.
Before the 1st June
Friday 29th May 2015
n/a
By the 15th June
Friday 12th June 2015
Friday 12th June 2015
DECC CM rule changes in force
Ofgem
DECC
DECC CM rule changes in force Input assumptions from DECC. Electricity Capacity Report
Ofgem
NG
DECC
T-4 ref
TA ref
7
Deliverable
10
11
12
T-4 Auction
Ofgem publish final revised CM Rules
Following consultation, Ofgem publish final updated version of CM Rules.
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. SoS publishes the final auction parameters
As soon as practical after 15th June
NG publish final guidelines to reflect auction parameters in SoS publication
Prior to the Tuesday opening of the 30th June pre-qual 2015 window Late June 2015
8
9
Scope
Date requirement from CM Rules/Regs
SoS publishes Auction Parameters Publish "Formal" Auction Guidelines 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
Pre-qualification window opens
IT systems "active" and applicants submit formal registration and data submission
National Grid Electricity Transmission
T – 20 weeks
DSR Transitional Auction
Dependencies
Owner
June 2015
June 2015
Ofgem Consultation process
Ofgem
Wednesday 24th June 2015
Wednesday 24th June 2015
Electricity Capacity Report
DECC
Friday 26th June 2015
Friday 26th June 2015
Monday 20th July 2015
DECC
Tuesday 30th June 2015
SoS Parameters
NG
Late June 2015
The date is subject to the will of Parliament, and securing approval of both Houses
DECC
Monday 20th July 2015
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NG/ Apps
T-4 ref
TA ref
13
Deliverable
Scope
Pre-qualification Last date for applications to be submitted window closes
Date requirement from CM Rules/Regs
T – 16 weeks
Pre-qualification Inform applicants of the outcome of Results Day 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).
14
15
16
17
Start of NG Appeal submission window NG Appeal window closed Provide updated Auction parameters
National Grid Electricity Transmission
DSR Transitional Auction
Dependencies
Owner
Friday 14th Friday 14th Window open NG/ August 2015 August 2015 for 4 weeks App Friday 25th September 2015
Friday 25th September 2015
NG
Friday 25th September 2015
Friday 25th September 2015
App
Friday 2nd October 2015 Friday 2nd October 2015
Friday 2nd October 2015 Friday 2nd October 2015
App
T – 10 weeks PQ
Send copies of completed applicant metering assessments to ESC. Opening date for applicants to raise an appeal with National Grid against the pre-qualification outcome Closing date for applicants to raise an appeal with National Grid against the pre-qualification outcome Provide the Delivery Body with an update on target volume / demand curve to reflect plant opting out but remaining operational.
T-4 Auction
PQ + 5 working days
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NG update to SoS on prequalification impacts
DECC
T-4 ref
TA ref
18
19
Deliverable
Scope
NG Appeal assessment complete & appellants notified Start of Tier 2 Appeal submission window
Applicant notified of appeal outcome. Capacity register updated. Notify SoS of appeals outcome. Opening date for applicants to raise an appeal with Ofgem against the pre-qualification outcome New build participants and DSR providers must provide Credit Cover
Latest possible date for applicants to provide Credit Cover to the ESC 20
21
22
Tier 2 Appeal window closed
Publish Updated Auction Guidelines
Closing date for applicants to raise an appeal with Ofgem against the pre-qualification outcome Notification of updated Auction Parameters (as a result of opt outs)
National Grid Electricity Transmission
Date requirement from CM Rules/Regs
PQ + 15 working days (dependent on amendment to regulations coming into force)
T – 7 weeks
T-4 Auction
DSR Transitional Auction
Friday 9th October 2015
Friday 9th October 2015
Friday 9th October 2015
Friday 9th October 2015
Friday 16th October 2015
Friday 16th October 2015
Friday 16th October 2015
Friday 16th October 2015
Monday 19th October 2015
Monday 19th October 2015
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Dependencies
Any/All NG appeals assessed
Owner
NG
App
Prequalification results day
App
App
DECC update to NG on parameters
NG
T-4 ref
TA ref
24
26
27
Scope
T-4 Auction
DSR Transitional Auction
Latest date for ESC to provide a Credit Cover approval notice if the applicant used the full 15 days to provide Credit Cover. Latest possible date Latest date for the applicant to for applicants to provide the Delivery Body with a provide Credit Cover copy of the Credit Cover approval approval notice to notice. the Delivery Body Provide Final Provide final updates to Auction Auction parameters Parameters. to NG
Friday 6th PQ + 30 November working days 2015
Publish "Final" Auction Guidelines & Bidder details
T – 3 weeks Tuesday 17th Tuesday 5th November January 2015 2016
Final Credit Cover verification
23
25
Deliverable
Date requirement from CM Rules/Regs
PQ + 32 working days
Friday 6th November 2015
Credit Cover provided
Tuesday 10th Tuesday 10th November November 2015 2015
Tuesday 17th Monday 4th November January 2015 2016
B
Publish final guidelines inc. any update to Auction Parameters & details of Auction Monitor.
Dependencies
Owner
ESC
App
For DSR TA, DECC this is where the process re-starts after the T-4 results are published. Final T-4 auction parameters
NG
C
D
Notify applicants of pre-qualification status following completion of Credit Cover process. Auction Status Start date for Applicants to submit confirmation window confirmations (Existing – Price Maker/Taker; DSR – Size & In/Out; open New/Refurb – In/Out & length)
National Grid Electricity Transmission
PQ + 37 working days
Credit Cover verification Tuesday 17th Tuesday 5th November January 2015 2016
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App
T-4 ref
28
29
TA ref
A
E
30
F
31
G
32
Deliverable
Tier 2 Appeal process Following completion of Tier 2 target completion appeal, applicant & NG date informed of outcome. Closing date for Auction Status confirmations Run Mock Auction
Last date for applicants to submit confirmations
NG provides results of Auction Status confirmations to SoS
NG to collate Auction status confirmations and provide results to SoS
Auction Go/No Go decision
DECC/NG agree Go/No Go
Run Mock Auction with all applicants
T–8 working days
J
National Grid Electricity Transmission
T-4 Auction
DSR Transitional Auction
Owner
Friday 20th November 2015
Tuesday 24th November 2015 Wednesday 25th November 2015 Thursday 26th November 2015
Tuesday 12th January 2016 Wednesday 13th January 2016
App
Thursday 14th January 2016
NG
Monday 7th December 2015
Monday 25th January 2016
T
Tuesday 26th January 2016
C
Friday 11th December 2015
Friday 29th January 2016
Auction closes
Dependencies
Friday 20th November 2015
Tuesday 8th December 2015
Start the first round
I
Complete Auction 34
T – 10 working days
H
Start Auction 33
Scope
Date requirement from CM Rules/Regs
Page 10
For DSR TA, this is where the process halts.
Ofgem
NG
Auction Status Confirmations Delivery Body readiness Go/No Go decision Based on a 4 days auction
DECC/NG
NG
NG
T-4 ref
35
36
37
TA ref
K
L
Deliverable
Notification of provisional Auction results
Auction monitor sends report to DECC Auction Results Day
M
Issue Capacity Agreements 38
Scope
Notify bidders whether they’ve been provisionally awarded a Capacity Agreement Notify DECC and Ofgem of the provisional results Auction Monitor prepares report on Auction process and submits to SoS Publish results of the auction to Bidders, the Auction Monitor & other administrative parties
Issue agreements to successful bidders
N
National Grid Electricity Transmission
Date requirement from CM Rules/Regs
C + 24 hours
C+2 working days C+8 working days
C + 20 working days
T-4 Auction
DSR Transitional Auction
Dependencies
Owner
Friday 11th December 2015
Friday 29th January 2016
Auction completing
NG
Tuesday 15th December 2015 Wednesday 23rd December 2015
Tuesday 2nd February 2016 Wednesday 10th February 2016
Auction completing
Auction Monitor
Auction completing
NG
No later than Friday 22nd January 2016
No later than Friday 26th February 2016
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No counter instruction from SoS. Auction Results Day
NG
National Grid Electricity Transmission
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