Glossary

Ofgem confirms Elexon as the Capacity Market Advisory Group secretariat

We are delighted that today, 9 May, Ofgem confirmed its decision to appoint Elexon as the independent Capacity Market Advisory Group (CMAG) secretariat, subject to a BSC Modification being raised and approved to enable us to do the work.

Ofgem decision

The following link will take you to the documents containing Ofgem’s decision, stakeholder responses to the Call for Input and the final Guidance for the CM Rules change process.

Elexon’s Chief Executive Simon McCalla said:

The CM plays an important role in securing electricity supplies and we are very pleased that Ofgem has confirmed that Elexon will take on the CMAG secretariat role. We already work closely with BSC Parties to develop and consult on reforms to the BSC, and we can apply this significant expertise and experience to managing the CMAG on behalf of Ofgem, for the benefit of industry parties and consumers.

Capacity Market Rules

From a governance perspective, Capacity Market (CM) Rules are similar in principle to the Balancing and Settlement Code (BSC) Change process. Ofgem currently operates a change process for these Rules. This Rules change process has increased in duration, complexity and administrative burden for Ofgem since its inception alongside the Capacity Market in 2014.

Ofgem has been engaging with industry on reforms to the CM Rules change process, and these reforms include a greater level of engagement with industry participants, achieved through the new Capacity Market Advisory Group.

Capacity Market Advisory Group

The Capacity Market Advisory Group will enable the Capacity Market Rules change process to become more dynamic and adaptive to changing market conditions, while also increasing transparency and promoting collaboration between Parties impacted by the Rules.

Elexon’s experience in Code management

Ofgem considers that Elexon is best placed to be the CMAG Secretariat based on our experience as the code manager of the BSC. We will use our existing, well-developed secretariat and chairing competencies of the BSC Change process.

Operating costs

Ofgem confirmed that the CMAG Secretariat costs should be included in Elexon’s total operational budget and recovered through existing funding arrangements. The costs for Elexon to fulfil the CMAG secretariat role in 2022/23 are already included in our current business plan.

Next steps

We will seek a proposer to raise a BSC Modification to enable us to conduct the work on behalf of Ofgem.

If you would like to be a member of CMAG, please email your expression of interest to Ofgem to [email protected] by Monday 13 June.

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