Capacity Market Launch Event 2020 - EMR Delivery Body
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Capacity Market Launch
Event 2020
Welcome, Housekeeping & Agenda Rob Smith
Housekeeping
CM Event 2020: Afternoon Session
Start End Duration Agenda Delivery Partner Presenter
13:00 13:15 15 mins Welcome & Agenda NGESO Rob Smith
13:15 13:45 30 mins Portal refresh update NGESO Nina Bhogal
Andrew
13:45 14:00 15 mins Target Capacity and de rating factors NGESO
Dobbie
Harry
14:00 14:30 30 mins Forthcoming consultation, update on forward plan work Ofgem Parsons/Chris
Thackerey
14:30 14:45 15 mins Break - -
14:45 15:15 30 mins Stress Event Testing ESC Patrick Bibby
Metering Test Deadline, aggregation rule submission &
15:15 15:45 30 mins EMRS Iain Nicoll
data submission
Davide
15:45 16:15 30 mins Emissions BEIS
Panzeri
16:15 16:45 30 mins Delivery Partner Q&A ALL -
Close
Sli.do
To ask questions and answer our survey feedback questions,
please go to Slido on your smartphone, tablet or laptop. Please
go to:
Slido.com
When prompted enter
#PM2020
Portal Refresh Update Nina Bhogal
Slido.com #PM2020
Our commitments
▪ Deliver improvements to the
EMR portal by April 2021
▪ Explore alternative solutions
and provide good value
▪ Focus on user experience to
ease portal access
▪ Ensure the system is flexible
to future changes
Electricity Market Reform
Delivery Body
Slido.com #PM2020
What you’ve told us…
Improved
Profile Mass Data Architectura
Dashboard Reporting User
Management Uploads l Changes
Experience
▪ Navigation, user- ▪ Sorting components ▪ Improve portfolio ▪ Common documents ▪ Archiving ▪ The ability to roll on
interface, on CM register is management with should be uploaded deactivated users or CMU information to
dashboard/ very difficult with better navigation to a company and separating them the forthcoming
checklists and limited labelling and search functions not to each CMU in from active users year/ prequal
customer progress ▪ Ability to define own ▪ Prequal results a portfolio ▪ Navigating prequal application
tracker through reports - e.g. print summary needed, ▪ Creating new CMU and processes is ▪ Too much irrelevant
prequalification out active CMUs for especially for larger ID’s each year when difficult – Add a information after
▪ A single location for a particular year with portfolios prequalifying the menu tree and CMU/ options have been
prequalification their Capacity same assets makes component chosen
results letters rather Provider, de-rated tracking difficult reference on every ▪ Simplify application
than having to go capacity, ▪ Clones fail to copy screen pages
into each application Components names uploaded documents ▪ Moving between 'My ▪ Portal is slow.
▪ Clear view of and MPANS ▪ Creating new CMU’s CMUs' and My Loading time and
obligations and ▪ Able to generate a for each prequal is Applications' is latency could be
milestones due by report on time consuming painfully slow faster
CMU pending/upcoming ▪ Bulk uploads
milestones (linked to capability for
Electricity Market Reform terminations) for my uploading
Delivery Body CMUs and due documentation for
dates multiple
Slido.com #PM2020
What changed?
▪ CM Restoration and
Easements
▪ COVID-19
▪ PQ Assessments
▪ Uncertain change landscape
Electricity Market Reform
Delivery Body
Slido.com #PM2020
Short term prioritisation
Survey
feedback
Deliverability
2021 Security &
Delivery Compliance
Mandatory
Regulatory
Change
Electricity Market Reform
Delivery BodySlido.com #PM2020
Improved
Profile Mass Data Architectural
Dashboard Reporting User
Management Uploads Changes
Experience
April 21 Delivery
Capacity Market Online user
Bulk upload / cloning
register guidance
Restoration
EMRS Commitments
Field validations
data flows (DSR multiyear and
emissions)
Website Application Outbound
Assessment
security Improvements Data/API
Electricity Market Reform
Delivery BodySlido.com #PM2020
Engaging with you
▪ User Group input on:
▪ Capacity Market Register
▪ Online user guidance
▪ Bulk upload / cloning
▪ Field validations
▪ Strategic road map
▪ Regular updates via email
Electricity Market Reform
Delivery BodySlido.com #PM2020
Summary
▪ We remain committed to delivering an improved system
▪ 20/21 delivery will be focussed on delivering key priority
changes
▪ We are mindful of further uncertainty adding further
complexity to delivery
▪ Developing a strategic road map to achieve our core
objectives which takes us into RIIO 2 and beyond
▪ Continue to test and engage with you via our user group
and regular channels
Electricity Market Reform
Delivery Body2020 Electricity Capacity Report Andy Dobbie EMR Modelling
Slido.com #PM2020
Background – ECR Content
Electricity Capacity Report (ECR) published on 14 th July includes:
❖ Auction target recommendations:
❖ 2021/22 T-1 and 2024/25 T-4
❖ Auction de-rating factors:
❖ Conventional plant, limited duration storage and intermittent renewable capacity
❖ Modelled de-rating factor ranges for interconnected countries
The Secretary of State determines:
❖ Whether to hold the auctions
❖ The capacity to secure in each auction and, in the case of the T-4 auction, the amount to hold back for T-1
❖ The auction parameters including the demand curve
❖ Individual interconnector de-ratings for use in the CM auctions
Electricity Market Reform
Delivery BodySlido.com #PM2020
Potential impact of COVID-19 pandemic
The demand and supply assumptions used to inform our recommendations do not take into
account any potential impact from the COVID-19 pandemic. We are currently reviewing this, and it
may lead to a change to our recommendations when we undertake the Adjustment to the Demand
Curve after prequalification.
❖ The demand and supply assumptions in our modelling are based on the 2020 Future Energy Scenarios (FES), which
were largely finalised when the pandemic arose
❖ National Grid ESO are currently reviewing how the COVID-19 pandemic could change our assumptions and whether
this would have an impact on our recommendations in the 2020 ECR
❖ We have an opportunity to reflect any new information that may impact our ECR recommendations when we undertake
the Adjustment to the Demand Curve after prequalification – this adjustment is already established in the capacity
market process
❖ Any revisions to our assumptions will be discussed with BEIS, Ofgem and the PTE by September 2020 to allow for
sufficient scrutiny ahead of applying any adjustments to the demand curve
❖ Should any adjustment be made, we will provide details relating to the changes in our demand and supply assumptions
in the published Adjustment to the Demand Curve report, including the reasons behind any changes
Opportunity to get involved: please contact the FES team by email at: FES@nationalgrideso.com if you would like to
contribute views or evidence that we can consider in reviewing the impact of COVID -19.
Electricity Market Reform
Delivery BodySlido.com #PM2020
Target capacity for the auctions
Our recommendation on the target capacity for the 2021/22 T-1 auction is 0 GW. The Secretary of State
has decided to hold a T-1 auction with a target capacity of 0.4 GW. This decision is consistent with
legislation to hold an auction for at least half the amount set aside and also reflects other uncertainties
❖ Outcome of the least worst regret calculation was -1.2 GW, but as this is negative, our recommendation is 0 GW
❖ Our recommendation covers 21 out of 24 cases modelled in the ECR
❖ The negative requirement has resulted from a number of changes since the decision by the Secretary of State to hold back
0.4 GW for the 2021/22 T-1 auction. Several of these changes were bigger than the 0.4 GW held back. These include:
❖ reduction in peak demand forecast of 3.5 GW
❖ procuring 0.9 GW extra capacity in the 2021/22 T-4 auction due to low clearing price
❖ net increase of around 0.8 GW non-CM capacity, meaning we need to secure less capacity through the CM
Our recommendation on the target capacity for the 2024/25 T-4 auction is 41.6 GW. The Secretary of
State has accepted our recommendation and will hold back 0.4 GW for the T-1 auction
❖ Our recommendation covers 14 out of 21 cases modelled
❖ Our recommendation of 41.6 GW represents the lowest T-4 target capacity to-date and is 3.1 GW lower than our
recommendation for the recent 2023/24 T-4 capacity market auction. This is mainly due to:
❖ 1.7 GW assumed from multi-year agreements being awarded in the recent 2022/23 T-3 and 2023/24 T-4 auctions
❖ reduction in peak demand forecast of 1.4 GW compared to the 2019 Base Case
See Chapters 5 and 6 in the 2020 ECR for more detailSlido.com #PM2020
De-rating factors for conventional plant
❖ De-rating factors for conventional stations are based on Technology class ECR 2019 ECR 2020
the methodology set out in the Capacity Market Rules Oil-fired steam generators 91.26% 95.22% (1)
❖ There is a change to the de-rating factor for Oil due to a
OCGT; reciprocating engines (non- 94.98% 95.22%
lack of historical data (the last oil plant closed in autogen)
2014/15). We recommended using the same de-rating
Nuclear 81.22% 81.43%
factor as OCGT
Hydro (excluding tidal / wave) 89.65% 90.99%
Looking ahead: CCGT 90.00% 90.00%
We are intending to carry out a development project to CHP and autogen (provided by 90.00% 90.00%
review how we can use new data to calculate de-rating BEIS)
factors for embedded generation directly from embedded
Coal; biomass; energy from waste 85.81% 84.80%
data sets.
This will consider the embedded capacity register recently DSR 86.14% 79.21%
approved by DCUSA and metered generation output from
See Chapter 4.1 and Table 15 in the 2020 ECR for more detail
Electralink. Any changes to de-rating factor methodology
will be subject to industry consultation.
In the meantime we continue to welcome views and can be
contacted via email at emrmodelling@nationalgrid.com
Electricity Market Reform
Delivery Body
(1) The methodology prescribes that the de-rating factor is based on availability during the winter peak period over the last 7 years. However as the last oil
plant closed in 2014/15, this only includes 2 years of historic data, so we recommend assigning the de-rating factor used for OCGTSlido.com #PM2020
De-rating factors for limited duration storage
Duration ECR 2019 ECR 2019 ECR 2019 ECR 2020 ECR 2020
❖ The methodology to determine de-rating factors
(hours) 2020/21 2022/23 2023/24 2021/22 2024/25
for limited duration storage is unchanged from T-1 T-3 T-4 T-1 T-4
last year
0.5 12.26% 10.59% 10.21% 12.75% 12.38%
❖ De-rating factors reflect the capability of
storage to deliver for the potential duration of a 1.0 24.70% 21.36% 20.43% 25.32% 24.77%
stress period. This means that storage assets 1.5 36.96% 31.94% 30.83% 37.71% 36.97%
with longer duration have higher de-rating
2.0 48.66% 42.53% 41.04% 49.17% 48.62%
factors
❖ De-rating factors for T-1 year similar to 2019 2.5 58.68% 52.18% 50.51% 58.23% 58.78%
ECR while the T-4 ones are higher as the Base 3.0 65.93% 59.43% 57.94% 64.70% 66.18%
Case storage projections have been revised 3.5 70.38% 64.07% 62.77% 68.76% 70.98%
downwards
4.0 72.98% 67.07% 65.93% 71.35% 73.76%
❖ Full details on the methodology can be found in
our final consultation report published in 4.5 75.03% 69.27% 68.16% 73.20% 75.79%
December 2017 (1) 5.0 71.13% 70.20%
95.08% 94.64% 94.64%
5.5+ 95.08% 95.08%
See Chapter 4.1 and Table 16 in the 2020 ECR for more detail
Electricity Market Reform
Delivery Body
(1) https://www.emrdeliverybody.com/Lists/Latest%20News/Attachments/150/Duration%20Limited%20Storage%20De-Rating%20Factor%20Assessment%20-
%20Final.pdfSlido.com #PM2020
De-rating factors for renewables
❖ The methodology to determine de-rating factors for
renewables is unchanged since last year
❖ As renewable capacity has access to other forms of Technology ECR 2019 ECR 2019 ECR 2019 ECR 2020 ECR 2020
support, capacity market de-rating factors use the class 2020/21 2022/23 2023/24 2021/22 2024/25
incremental equivalent firm capacity (EFC) to reflect T-1 T-3 T-4 T-1 T-4
the additional contribution to security of supply from Onshore 8.98% 8.20% 7.42% 8.01% 7.81%
projects delivered through the capacity market wind
❖ The incremental EFC is lower than the average EFC of Offshore 14.45% 12.30% 10.55% 12.11% 11.13%
the fleet, which will reflect the contribution to security wind
of supply from wind and solar delivered through the
Solar PV 2.34% 3.13% 3.22% 2.54% 2.34%
capacity market and other support schemes (e.g.
Contracts for Difference) See Chapter 4.1 and Table 17 in the 2020 ECR for more detail
❖ Small change in wind incremental EFCs compared to
2019 ECR reflect changes in wind capacity
assumptions for the T-1 / T-4 years
❖ Solar PV incremental EFC changes since 2019 ECR
reflect lower storage capacity and change in solar PV
capacity
❖ Full details on the methodology can be found in our
final consultation report published in February 2019 (1)
Electricity Market Reform
Delivery Body
(1) https://www.emrdeliverybody.com/Prequalification/EMR%20DB%20Consultation%20response%20-%20De-
rating%20Factor%20Methodology%20for%20Renewables%20Participation%20in%20the%20CM.pdfSlido.com #PM2020
De-rating ranges for interconnected countries
Changes to our modelling methodology
There has been a significant change to the way we have modelled interconnector de-rating factor ranges
this year, which we consider to be more reliable and robust. We remain committed to further engagement
to help market participants better understand and challenge our modelling.
❖ The two main changes to the modelling were:
❖ How we use stress periods in our modelling (now strictly defined as periods where unserved energy is greater than zero rather
than when GB demand is higher than supply located in GB)
❖ Improved model functionality to improve stochastic modelling around stress periods
❖ For the first time, we shared information on our modelling methodology before the ECR was published and from the feedback,
recognise the opportunity for more engagement to provide greater transparency and help market participants better understand
our modelling
❖ We are intending to host a webinar that will solely focus on our interconnector modelling with further details to follow.
❖ Looking further ahead, the participation of interconnectors in the capacity market is likely to be superseded by direct
participation of cross-border capacity as set out in Article 26 of Regulation (EU) 2019/943 as part of the Clean Energy Package.
ENTSO-E have a mandate to develop methodologies to enable this. Further information is available on the ENTSO-E website. (1)
ACER have issued a consultation on the participation of cross-border capacity in capacity mechanisms, which will run until 9
Aug 2020. (2)
Electricity Market Reform See Chapter 4.2 in the 2020 ECR for more detail
Delivery Body
(1) https://consultations.entsoe.eu/markets/proposal-for-cross-border-participation-in-capacit/
(2) https://www.acer.europa.eu/Media/News/Pages/ACER-consults-on-cross-border-participation-in-capacity-mechanisms.aspxSlido.com #PM2020
De-rating ranges for interconnected countries
Results
❖ De-rating factor ranges are generally Country ECR 2019 ECR 2019 ECR 2019 ECR 2020 ECR 2020
higher this year than last year. This is 2020/21 2022/23 2023/24 2021/22 2024/25
due to the change in how we have T-1 T-3 T-4 T-1 T-4
defined a stress event in our Final Final Final Low High Final Low High Final
modelling.
Belgium 82 58 46 N/A N/A N/A 46 88 68
❖ The final de-rating factors are
determined by the Secretary of State Denmark N/A N/A 32 N/A N/A N/A 45 80 52
based on consultation with the PTE France 87 – 92 69 – 75 63 – 69 N/A N/A N/A 50 91 69 – 75
❖ The final de-rating factors are broadly Germany N/A N/A N/A N/A N/A N/A 54 83 N/A
consistent with modelling that
Ireland N/A 56 44 54 99 59 24 66 49
assumes a harmonised reliability
standard of 3 hours per year loss of Netherlands N/A 50 36 N/A N/A N/A 48 84 61
load expectation (LOLE) in Europe Norway N/A 88 88 N/A N/A N/A 91 100 90
and 8 hours in Ireland, and also allow
Final de-rating factors 2021/22 T-1: EWIC 59%
for technical unavailability Final de-rating factors 2024/25 T-4: Nemo Link 68%, Viking Link 52%, IFA 69%, IFA2 71%,
Eleclink 75%, EWIC 49%, Moyle 49%, Britned 61%, NSL 90%
Electricity Market Reform See Chapter 4.2 in the 2020 ECR for more detail
Delivery Body
Note: N/A means that we assume that interconnectors from those countries won’t participate in the upcoming auction, either because (1) they already have
agreements from a previous auction or (2) new interconnectors won’t be ready to participate yetSlido.com #PM2020
Continuing the conversation
❖ We welcome comments, questions and feedback on our modelling at emrmodelling@nationalgrid.com
❖ We are happy to engage on our modelling, through industry events and bilateral meetings; we want to help
you understand it as best we can to increase transparency and provide opportunity for you to challenge us
❖ We are intending to host two further webinars on our modelling. These will cover the modelling behind our
recommendations on the target capacity and a session dedicated to interconnector modelling. Both
sessions will allow time for Q&A.
❖ We are working to arrange them for w/c 3 Aug after the 2020 Future Energy Scenarios has been
published. We will provide confirmation of the dates and times soon.
Electricity Market Reform
Delivery BodySlido.com #PM2020
Capacity Market Rules change consultation
An overview of Ofgem’s consultation on Capacity Market Rules changes
15/07/2020Regulatory Challenges of the GB Capacity Market
Slido.com #PM2020
Regulatory Challenges
1 2 3 4
The Wholesale Effective Ensuring Rules Remunerating
Market Impact Oversight of the Deliver Efficient and Incentivising
of the Capacity Capacity Market Security of the ESO Delivery
Market Supply Body
Five Year Review
Delivery Body
Policy changes Rules change process Market interactions
revenues
• Amendments to the • Creation of a CM • Deliver a package of • Seek to align with
Rules reduce the Advisory Group to revenues for the RIIO- other markets where
regulatory and create a fair and T1 period appropriate appropriate and
administrative burden balanced forum to for the role ensure changes to the
on participants, allow industry to undertaken and CM do not drive
where appropriate. assist in developing enabling unintended,
Rules changes. implementation of a inefficient outcomes
new IT Portal. in other markets.
25Background
Slido.com #PM2020
11 September 2018 : Open letter on the Five Year Review of the
Capacity Market (“the Open Letter”)
16 April 2019: Five Year Review of the Capacity Market Rules – First
Policy Consultation (“the First Policy Consultation”)
18 July 2019: Decision on the first consultation on amendments to the
Capacity Market Rules (“the Decision on the First Policy Consultation”)
31 July 2019: Report on our Five Year Review of the Capacity Market
Rules and Forward Work Plan (“the Five Year Review Report”)
13 August 2019: Consultation on Adjustments to the Electricity Market
Reform Delivery Body Revenues
30 September 2019: Decision on Adjustments to the Electricity Market
Reform Delivery Body Allowances
26Scope
Slido.com #PM2020
• The First Policy Consultation introduced a number of Rules change proposals, some of which
were implemented following the Decision on the First Policy Consultation.
• In the Five Year Review Report, we committed to bringing forward a second consultation,
following further consideration of the outstanding proposals discussed in the First Policy
Consultation.
• This consultation outlines our current minded-to position on areas we initially consulted on in
the First Policy Consultation, and some which we are bringing forward as a result of feedback
received since the publication of that document.
Implementation note:
The changes proposed in this consultation, and any subsequent decision arising from our
consultation, will be considered for implementation in the Rules ahead of Prequalification 2021,
not the upcoming 2020 Prequalification as is usually the case. However, these changes will still
need to be prioritised for delivery amongst others being considered by the CM Delivery Partners1.
1TheCM Delivery Partners consists of the Department for Business, Energy & Industrial Strategy (“BEIS”), National Grid Electricity System
Operator (NGESO) who act as the Electricity Market Reform Delivery Body (“NGESO DB” or “Delivery Body”), the CM Settlement Body and Ofgem. 27Consultation: Policy Areas
Slido.com #PM2020
Policy Area Summary
Proposal to provide Generating CMUs with greater flexibility to change their components, between
Amendments to Rule 4.4.4 Prequalification and Delivery. We are also considering whether or not this flexibility should extend to
within Delivery Years.
Outlining our expectation that the concept of ‘evergreen’ prequalification is implemented in the
Evergreen Prequalification EMR IT Portal
Prequalification Data Proposals to remove requirements that do not provide essential assurance for the CM.
Proposals to amend requirements to submit Relevant Planning Consents (“RPC”) at Prequalification
Planning Consents and also to clarify the relationship between Connection Capacity and the maximum output contained
in RPC.
Our current position on the implementation of CP270 and CP271, together with further changes to
Capacity Market Register (“CMR”) the CMR arising from stakeholder responses.
Proposals on amendments to requirements for the submission of progress reports, and associated
Reporting Requirements independent Technical Expert (“ITE”) assessments.
Proposal on amendments to the type of notification that the Delivery Body must provide to an
Applicant notice Applicant when their associated Prequalification status changes.
Areas raised by stakeholders in response to our open letter as well as previous change proposals
submitted which we stated we would consider further including:
Outstanding areas of the First
• Amendments to the Adjusted Load Following Capacity Obligation Formula (“ALFCO”)
Policy Consultation • Amendments to the Relevant Balancing Services
• Differentiating between firm and non-firm connection agreements
28Consultation: Timelines
Slido.com #PM2020
• We have allowed for a longer consultation period to account for the ongoing industry
resource constraints as a result of Covid-19.
• The consultation will be open for 3 months.
• Our estimate is that the subsequent steps will then proceed as follows:
Autumn • Review of consultation responses
2020
Winter • Policy decision on the Rules proposals consulted upon in this consultation
2020
• Statutory Consultation on legal drafting for Rules amendments related to policy decisions to be
Q1 2021 incorporated for Prequalification 2021 or 2022 depending on prioritisation outcomes.
• Final Rules change decision on Statutory Consultation
Q2 2021
Summer • Implementation of amended Rules
2021
• Further consideration of proposals not yet implemented
29Update on the Forward Work Plan
Slido.com #PM2020
Rules change process We propose to form a ‘CM Advisory Group’.
• We plan to pick this work up in the near future, and will aim to consult on the formation of this group by the end of
2020
We aim to develop proposals with industry to reduce Rule complexity, remove
Secondary Trading barriers to entry and ensure the transfer of risk is appropriate
• We expect that the CM Advisory Group will consider any Rules changes.
NGESO DB incentives We will decide upon an improved suite of incentives for NGESO DB.
• Our decision, published on 5 June 2020, is to remove the DSR incentive from NGESO’s Licence Special Condition 4L
for the 2020/21 financial year while we consider integrating the remaining three Delivery Body incentives with the
wider NGESO incentive framework.
We will decide upon a package of revenues for the RIIO-T1 period appropriate
NGESO DB revenues for the role undertaken and enabling implementation of an updated Portal.
• Our decision on DB revenues was published on 30 September 2019. Our decision on the subsequent consultation,
published 5 June 2020, includes an additional uncertainty mechanism by providing for a relevant adjustment
proposal window in March 2021.
30Slido.com #PM2020
Our core purpose is to ensure that all consumers can
get good value and service from the energy market.
In support of this we favour market solutions where
practical, incentive regulation for monopolies and an
approach that seeks to enable innovation and
beneficial change whilst protecting consumers.
We will ensure that Ofgem will operate as an efficient
organisation, driven by skilled and empowered staff,
that will act quickly, predictably and effectively in the
consumer interest, based on independent and
transparent insight into consumers’ experiences and
the operation of energy systems and markets.
www.ofgem.gov.ukCapacity Market Launch Event
2020
BreakCapacity Market Stress Testing Programme Capacity Market Launch Event Patrick Bibby July 2020
Slido.com #PM2020
What I’ll talk about today
● Electricity Settlement Company (ESC) and Capacity Market
Delivery Partners
● What is a CM Stress Event / Mock Stress Event
● Why are we talking about Stress Events?
● Stress event testing & developments
Patrick Bibby, Head of Operations at the Electricity Settlements Company (ESC)
Patrick.Bibby@lowcarboncontracts.uk
www.lowcarboncontracts.uk RESTRICTED – COMMERCIAL SENSITIVE
34Capacity Market Interactions Slido.com #PM2020
ESC are responsible for all financial transactions
Electricity
Capacity Agreement Settlements
Licence obligations
Company (ESC)
Capacity Payments Payment obligations
Electricity
Capacity Settlements Electricity
Providers Over Delivery Company
Settlement Refunds Suppliers
(ESC)
Services
Penalty Charge Provider Reconciliation
(EMRS)
CP & Auction data Generation Volumes
National BSCCo
Grid (ELEXON)
Stress Event Supplier Volumes
35Slido.com #PM2020
What is a Capacity Market Stress Event?
A CM Stress Event is:
● A System Stress Event occurs at least four hours after a Capacity Market Notice (CMN) has been issued
● Demand Control has taken place to resolve a national shortage of generation resources; and
● Post-event analysis by National Grid ESO has confirmed that a System Stress Event occurred.
Capacity Providers may face penalties if they do not deliver their Adjusted Load Following Capacity
Obligation (ALFCO) during a CM Stress Event (i.e. the amount of capacity awarded in the auction, adjusted
for demand on the system)
CMN issued Demand control starts Demand control ends CMN cancelled
Capacity Market Notice in force
Demand Control
No penalty for Potential Penalties and Over Delivery No penalty for
failing to deliver Payments failing to deliver
T+4 hours
36
www.lowcarboncontracts.uk RESTRICTED – COMMERCIAL SENSITIVESlido.com #PM2020 What is a Capacity Market Mock Stress Event (MSE)? • A test of systems and processes to help prepare for the real event • This involves a fixed period and no penalties • All parties are involved Why hasn’t there been a mock event recently? • There was no Mock Stress Event in 2019 and 2020 due to the CM Standstill and COVID-19 • System changes for restart were still being implemented well into 2020 • We are proposing to change our approach this year
Slido.com #PM2020
Why are we discussing Stress Events?
Why Now?
● To improve visibility
● We have implemented system and process changes
● To consult and get your feedback
● Lower risk of stress event in summer months and
demand reduction
What is the risk?
● System changes from the standstill were still being delivery
in early 2020
● COVID-19 has shown the unexpected can happen
● We are focused on improvements to remove future risk
www.lowcarboncontracts.uk RESTRICTED
38– COMMERCIAL SENSITIVESlido.com #PM2020
Change of approach
Stress Event Preparation: Mock Stress Event specific:
20 actions in 2018* 4 actions in 2018
• 7 actions relate to communication, key to • Guide key to support Capacity providers
this is the CM Stress Event Guide 2019 for next Mock Event walking through
• 2 relate to data accuracy and process • For example, at the start of the 2019/20
improvements, we have increased delivery year only 70% of aggregation
checks, but we recognise more could be rules were complete, this increased but
done to ensure better visibility timing & visibility can be improved
• 3 rules changes • Future simplification
• 8 Stress Event system changes • All but 1 system changes to be delivered
before 2021. A future mock stress event
• 5 delivered
will introduce these changes
• 2 further 2020
• 4 specific actions, front line support,
• Change to Backing data 2021 email receipts, Time stamping CVR files
and expand scope of MSE
*Please read the letter sent by the Delivery Partners to Capacity Providers on the 26th June 2020 39Slido.com #PM2020
Capacity Providers & Stress Events
Data and information being up to date and easy to find is essential
During Capacity
Before Capacity Market Stress Event
Market Stress Event
• Ensure Capacity Market Units
(CMU) are delivering their
• Ensure Authorised Persons are up-to-date Adjusted Load Following
Capacity Obligation (ALFCO)
• Ensure Aggregation Rules are up-to-date either by increasing generation
or reducing demand.
• Engage in Physical Transfers of Capacity
Obligations if required
After Capacity Market
• Ensure metering pathways have been setup
Stress Event
and are functioning correctly
• Submit data where necessary
• Familiarize yourself with the CM Stress Event (including balancing service data
Guide – under further investigation)
• Take part in Volume Reallocation
if required
40Slido.com #PM2020
Stress Event Testing Programme
Improvements can be made independently but remain mutually beneficial. A
congested pipeline does not have to be a barrier to change.
• Stress Event Guide, EMRS Authorised Contacts,
1. Communication Website updates, Delivery Partner communication
alignment
• Independent review of data transfer of relevant
2. Data transfer balancing services, Meter Data improvements
3. EMRS System • System developments, Regression testing
programme including dormant functionality and
functionality standstill changes and penalty calculations
4. Future Mock • Timing, input, expectations, alignment between
Stress Event Delivery Partners and Capacity Providers
preparation
41Slido.com #PM2020
Recent communications
● Survey, 26th June 2020, we want to capture industry views to help shape the rest of
this year and future MSE’s appropriately
● We accompanied the survey with a letter to tell you about our plans to improve the
CM Stress Event processes and an update on all MSE 2018 actions, these included*
- Improvements to the transparency of the Capacity Volume Register (CVR)
November 2019
- Improving the security of CMVRN notifications including immediate feedback
if an incorrect file has been submitted November 2019
- New Metered Data Report on the EMRS Portal May 2020
- Please see letter and specific communication form the delivery partners
- Improved arrangements for sharing data between National Grid and the EMR
Delivery Partners which we plan on expanding further
● Published the CM Stress Event Guide in May 2019 (updated in April 2020)
RESTRICTED – COMMERCIAL SENSITIVE
42Slido.com #PM2020 Insert: Document title 43
Slido.com #PM2020
1.1 Purpose of this guide
This guide is a joint publication from the the Electricity Documents referred to in this guide
Settlements Company (ESC) and National Grid ESO -
Electricity Market Reform Delivery Body (EMR DB)
(hereafter collectively referred to as the ‘Delivery
Partners’) and ESC’s settlement services provider, EMRS, Capacity Market
with support from Cornwall Insight. It has been created to Regulations
provide a single source of information about Capacity Government
Market Stress Events (as defined in Section 3.2).
This guide has been produced to provide Capacity
Providers with a single source of information detailing: Capacity Market
Rules
• The processes involved with Capacity Market Stress
Events Ofgem
• Their obligations during Capacity Market Stress Events
• The penalties for failing to deliver during a Capacity Guidance Docs
Market Stress Event
Delivery Partners
Working
Practices
EMRS & DB
Stress event Obligations Balancing
CM Stress Event Overview of a Metered data Balancing Volume
Background communicatio during
ALFCO
a stress Metered data services data 44
communications CM stress
Stress
event
Event submission services data reallocation
ns event submission
Penalty invoice
Disputes FAQs Glossary Contact us Appendices
calculationSlido.com #PM2020
1.4 Key roles in a Capacity Market Stress Event
Activities during CM Stress
Organisation CM Stress Event Responsibilities Activities after CM Stress Event
Event
• Deliver the Capacity Market in line with Rules
and Regulations
• Issues Capacity Market Notices • Balances the system • Confirms that a Capacity Market Stress Event
has occurred
• Supports ESC in managing meter changes and • Publishes the Capacity Volume Register
tests under the Metering Agent Contract • Operates the settlement system
On behalf of ESC • Maintains and validates Aggregation Rules • Issues data default notice
• Continuous Improvement • Oversees settlement of payments
• Track communications from relevant parties • Ensure CMU is generating at • Submit data
• Ensure Authorised Persons are up-to-date least its Adjusted Load • Take part in Volume Reallocation
• Ensure Aggregation Rules are up-to-date Following Capacity Obligation
Capacity • Engage in Physical Transfers of Capacity (ALFCO) (see Section 4)
Provider Obligations
• Ensure metering pathways have been setup
and are functioning correctly
• Provides data to support the settlement
process
Half-hourly • Provides metering data on behalf of CMUs
data registered with the Supplier Volume
aggregator
Stress event Obligations Balancing
CM Stress Event Overview of a Metered data Balancing Volume
Background communicatio during
ALFCO
a stress Metered data services data
communications CM stress
Stress
event
Event submission services data reallocation
ns event submission
Penalty invoice 45
Disputes FAQs Glossary Contact us Appendices
calculation• G4 – EMR Settlement
Authorisations
Slido.com #PM2020
2.1 Key sources of information related to
Capacity Market Stress Events
Capacity Providers will receive information from a number of sources before, during and after a Capacity Market Stress Event. In some
cases only Authorised Contacts (someone recognised by the Delivery Partners to act on behalf of their EMR Party) will receive
communications. Appendix 2 provides additional industry warnings and sources of information that may be of use to Capacity Providers
but are not directly related to Capacity Market Stress Events.
Info origin What Channel Who can receive it Notes
Capacity Market ● Parties should sign up
● Text Message, email, Capacity
Notifications and ● Public, email subscribers to email and text
Market Notice website
cancellations message alerts at the
National Capacity Market
Grid ESO Notice Website
Confirmation of
● Text Message, email, Capacity ● Public, email subscribers ● Email and text alerts
System Stress
Market Notice website are tested at the start
Event
of the delivery year
National ● Email from:
Capacity Market
Grid EMR emr@nationalgrideso.com ● Capacity Providers’ assigned
System Stress
Delivery ● System Stress Event Template main admins
Event Template
Body available here.
● Primary Party Authority, Finance
Capacity Volume ● Via log on at EMRS Settlement
On behalf of ESC
Authority, Operating Authority,
Register website
Finance Contact
EMRS
Data Default ● Emails will come from: ● Primary Party Authority, Finance
Notice contact@emrsettlement.co.uk Contact
Stress event Obligations Balancing
CM Stress Event Overview of a Metered data Balancing Volume
Background communicatio during
ALFCO
a stress Metered data services data
communications CM stress
Stress
event
Event submission services data reallocation
ns event submission
Penalty invoice 46
Disputes FAQs Glossary Contact us Appendices
calculationSlido.com #PM2020
Survey Feedback
• Stress Event Guide a good step forward
1. Communication • More targeted communication using preferred contacts
2. Data transfer • Simplify the high-level message
• Its good to see progress but more detail required
3. EMRS System • CP engagement earlier when designing changes
functionality • More examples templates / processes
4. Future Mock • Testing important
Stress Event • Avoid Prequalification
preparation
If you have further thoughts the survey will remain open for another 2 weeks
47Slido.com #PM2020
Summary
● Improving the visibility of supporting activity in preparation for Stress Events,
by sharing our plans and getting your feedback
● Checking the reliability and suitability of communication channels we would
use to communicate with you
● Testing system functionality and interfaces between Delivery Partners
● We are continuing to implement system improvements
● We continue to welcome feedback on the CM Stress Event Processes – email
us on info@electricitysettlementscompany.uk
www.lowcarboncontracts.uk RESTRICTED – COMMERCIAL SENSITIVE
48Slido.com #PM2020
Thanks for your time
Patrick.Bibby@lowcarboncontracts.uk
© Low Carbon Contracts Company Ltd
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX
name [author name]
t: 0207 211 8881 t: [0207 123 4567]
lowcarboncontracts.uk e: [name.surname@lowcarboncontracts.uk]Public
Capacity Market Metering
Metering Test Deadlines
Metering Pathways
Metering Identifiers
Aggregation Rules
15 July 2020
Iain NicollSlido.com #PM2020
How do I know if I need a Metering Test?
All CMUs must complete a Metering Assessment.
• A series of high level questions on the metering arrangements used by
the CMU.
• Metering Assessment is completed on the Delivery Body Portal.
• Delivery Body have published guidance on the Metering Assessment to
assist Capacity Providers in the pre-qualification guidance document.
• Delivery Body will notify you if the result of the Metering Assessment is
that a Metering Test is required.
EMRS recommends completing a Metering Assessment as soon as
possible to give you as much notice as possible if a Metering Test is
required.
Capacity Market Metering 51Slido.com #PM2020
Metering Test • CMU Category deadlines 2020/21
Delivery Year
Deadlines
Capacity Market Metering 52Slido.com #PM2020
Metering Test Deadlines
Modifications due to the impact of Coronavirus have changed the deadlines in Rule 8.3.3 (e).
Where a Metering Test is required a Capacity Provider must submit a Metering Statement as
per Schedule 6 of the Rules.
• G20 – Capacity Market Metering Statement
Recommend submitting a Metering Statement as soon as possible.
• Metering Tests can be failed and it takes time to resolve issues.
• Metering Tests are carried out on a first come first served basis.
• A large number of Metering Tests to be completed late submissions may not have time to
be reviewed.
Capacity Market Metering 53Slido.com #PM2020
Metering Test Deadlines for 2020/21
2020 Capacity Market Rules
Auction Type Deadline
T-4 2015 New Build 30 September 2020
Unproven DSR and Refurbishing 30 September 2020
T-4 2016
New Build 30 September 2021
Existing Generating, Proven DSR,
T-1 2020/21 Unproven DSR, New Build and 30 September 2020
Refurbishing
Subject to modifications for impact of Coronavirus
Capacity Market Metering 54Slido.com #PM2020
2020/21 Delivery Year
Coronavirus Amendments Unproven DSR CMUs with Agreements
starting 1 October 2020
Unproven DSR CMUs,
Refurbishing CMUs and New • Rule 8.3.2ZA applies no later than 17
Build CMUs can have an September 2021
extension to the deadlines if
certain conditions are met.
Prospective CMUs
• New Build Agreements with first Scheduled
New Rule 8.3.2ZA and 6.7.4A Delivery Year starting 1 October 2020 for T-1
require a report from an and 1 October 2019 for T-4; and
Independent Technical Expert to
• Refurbishing Agreements with first Scheduled
the Delivery Body explaining
Delivery Year starting 1 October 2020
how the effects of Coronavirus
caused delays. • Rule 6.7.4A applies no later than the Extended
Long Stop Date
• Extended Long Stop Date is 30 September
2021
Capacity Market Metering 55Slido.com #PM2020
• Have you started preparing
setting up your metering
Metering pathways?
• Set up data flows for your MSIDs
Pathways • 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?
Capacity Market Metering 56Slido.com #PM2020
Setting up a Metering pathway
There are three options:
• Balancing Mechanism Units (BMU)
• Supplier Settlement (MPAN)
• Self submission CSV (Balancing Services and Bespoke)
BMU MPAN Self Submission
Capacity Market Metering 57Slido.com #PM2020
Settlement Metering Systems
BM Units MPANs
EMRS automatically receives BMU data • Capacity Provider must contact the Supplier to establish the
via the Settlement Administration Agent. flow.
Capacity Provider has to take no action. • You may require to do this for both the Import and Export
MPAN – these may have different Suppliers.
If the BMU is being split the CMU
becomes Bespoke and the self
submission pathway must be used.
Capacity Market Metering 58Slido.com #PM2020
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.
Capacity Market Metering 59Slido.com #PM2020
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 contact@emrsettlement.co.uk to request a Secure File Transfer Protocol (SFTP) account.
EMRS will issue a username, password and the address of the SFTP site.
Username and password will be sent separately.
Capacity Market Metering 60Slido.com #PM2020
Data submission requirements – October 2020
EMRS will only accept data through your chosen Metering Pathway.
• If you wish to change your Metering Pathway you can request to do so under Rule 8.3.3
(f) (ii).
• This request may not be approved or may be subject to a Metering Test being required to
be passed before the Metering Pathway can be changed.
Metering Pathways should be setup so Metered Volumes are being submitted for the start of
the Delivery Year.
• Where a Baseline is required (DSR CMUs and Storage) data is required for six weeks’
before the start of the Delivery Year.
• In case a Stress Event occurs on 1 October 2020.
Capacity Market Metering 61Slido.com #PM2020
Metering
Identifiers and
• What is this activity?
Aggregation • How will the process work?
Rules for the • What is the format?
2020/21 • Let’s go through an example
Delivery Year
Capacity Market Metering 62Slido.com #PM2020
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 submit aggregation rules via the Delivery Body Portal.
• This will be for each Component making up the CMU.
Guidance on how to submit an aggregation rule through the Portal is available through the
Delivery Body website.
Aggregation Rules should not be completed during a prequalification submission
for a CMU when it is created – if they are they will have to be redone through the
‘Amend Metering Data’ button.
Capacity Market Metering 63Slido.com #PM2020
How will the process work?
The process that will be followed during the Metering Identifiers and Aggregation Rules activity is outlined below.
Capacity Providers will update the Aggregation Rule for the CMU in the Delivery Body Portal.
• This is for each Component making up the CMU.
Once the relevant details have been added (Metered Entity Identifiers and Type, Multiplier
and if applicable Line Loss Factor information) this will be submitted for review.
EMRS receive a notification to validate the aggregation rule and identify any issues.
Capacity Provider will be notified review complete and must go onto the Portal to resolve
any issues identified.
• You must log onto the Portal to check all the Components have been passed.
If the Capacity Provider makes any updates the process will be completed again.
Aggregation Rules will be loaded into the EMR Settlement System through a file interface
from Delivery Body.
Any queries please email emr@nationalgrid.com or metering@emrsettlement.co.uk
Capacity Market Metering 64Slido.com #PM2020
What information do I need to submit?
Settlement Metering Non-Settlement Metering
BMU MSID_NON_BSC
Metered Entity Metered Entity Type
MPAN (BMEID)
Type
Interconnector Metered Entity ID CSV File ID
BMU ID Multiplier 0 to 1 or -1
Metered Entity ID MPAN Boundary Metering
BMU ID or MPAN
ID
Interconnector ID
Distributor ID LDSO ID
Multiplier 0 to 1 or -1
Line Loss LLFC ID or CVA
MSID
Non-Settlement Metering no Line Loss info needed if behind a Transmission System
connection point.
BMU ID and CVA MSID needed if behind an Embedded BMU.
MPAN and LLFC ID needed if behind a Boundary MPAN.
Capacity Market Metering 65Slido.com #PM2020
Let’s go through an example
An Existing Generating CMU that has an Import and Export MPAN.
• Net Output demonstrated through Active Export MPAN Metered Volumes.
• For the relevant Component ID select the MPAN only option and submit the export
MPAN (i.e. 1200087654321).
Capacity Market Metering 66Slido.com #PM2020
Let’s go through a second example
A DSR CMU, using a permitted on-site Generating Unit, that has an Import and Export MPAN.
• DSR Volume demonstrated by swing from Import to Export.
• For the relevant Component ID select the MPAN only option and submit the export
MPAN (i.e. 1200087654321) and then add a second MPAN (i.e. the import MPAN
1200012345678).
Capacity Market Metering 67Slido.com #PM2020
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
For Metering Tests:
WP197 – Capacity Market Metering Test
https://www.emrsettlement.co.uk/publications/working-practices/
For Metering Statements:
G20 – Capacity Market Metering Statement
https://www.emrsettlement.co.uk/publications/guidance/
EMRS Service Desk EMRS Metering
contact@emrsettlement.co.uk metering@emrsettlement.co.uk
020 7380 4333
Capacity Market Metering 68Capacity Market Launch
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Energy Security
BEIS
17 July, 2020CM Emissions Limits Slido.com #PM2020
Legislative landscape:
• Recast Electricity Regulation (“the Electricity Regulation”) came into effect on 4 July 2019 as part of the EU’s Clean Energy
Package . Article 22(4) introduced a new requirement for capacity mechanisms to include carbon emissions limits for both
new build capacity and existing capacity.
• Capacity Market Amendment (No. 5) Rules 2019, which came into force on 18 July 2019 (prior to the prequalification
window in 2019). Affects new-build capacity participating in the early 2020 auctions
• ACER Opinion – 17 December 2019
Consultations:
• Capacity Market: carbon dioxide emissions limits (July-September 2019)
• Capacity Market: proposals for future improvements (February 2020)
71CM Emissions Limits Slido.com #PM2020
Overview of the limits:
• Emissions Limit: 550g of CO2 of Fossil Fuel origin per kWh of electricity generated. Applies to:
• From now for CMUs with a start date after 4 July 19
• From 1 October 2024 for CMUs with start date before 4 July 19
• Yearly Emissions Limit: 350 kg CO2 of Fossil Fuel origin on average per year per installed kWe – carve out.
• Only applies to CMUs with start date before 4 July 19
• Applies from 1 October 2024.
For DSR: what matters is the start date of each individual component, not of the CMU.
72CM Emissions Limits Slido.com #PM2020
Demonstrating compliance at Prequalification:
• Fossil Fuel Emissions Commitment – New Build and Refurbishing generation, Unproven DSR. Will need to be followed by
the submission of a Fossil Fuel Emissions Declaration at the appropriate milestone:
• New Build – start of the first DY
• Refurbishing – Long Stop Date
• Unproven DSR – DSR Test certificate provided
• Fossil Fuel Emissions Declaration – Existing generation and Proven DSR. Emissions declared at component level.
• Needs to be verified by an Independent Emissions Verifier (other than first year)
• Will need to be updated in case a ‘material change’ occurs.
• Can be relied upon in future years if no ‘material change’ occurs and it does not rely on the Yearly Limit
• CMUs relying on the Yearly Emissions Limit will need to submit a new FFED with a new calculation at every new
Prequalification they take part in.
73CM Emissions Limits Slido.com #PM2020
Special cases and exceptions
• Components under 1 MW do not need to be declared, and no calculation needs to be provided, but the CM participants
declares that components under 1 MW will be compliant.
• Waste is not considered a fossil fuel, so energy from waste CMUs do not need to submit a Declaration
• CHP plants will be able to take into account the pressure of the steam produced as part of the cogeneration process.
• New Build, Refurbishing CMUs and Unproven DSR without any fossil fuel components need to submit a Fossil Fuel
Emissions Commitment at Prequalification – if they do not contain fossil fuel components upon completion they can
declare this to the Delivery Body and not submit a Fossil Fuel Emissions Declaration.
74EMRS, ESC, Ofgem, BEIS Question & Answer
Capacity Market Launch
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