Consultation: Credit Assessment Price decrease to £230/MWh

We are consulting on a decrease of the CAP to £230/MWh from the last notified value of £240/MWh. This is a two day consultation, and will close at 17:00 on 18 November 2021.

Outcome

The consultation closed on Thursday 18 November 2021 and two responses disagreed with the proposed value.

The Credit Committee considered the consultation responses without holding a Credit Committee meeting, so as not to hold up the implementation of the reduced CAP value. These responses will be considered in more detail at the next Credit Committee meeting, which will be in the week beginning 29 November 2021.

Summary

The Credit Assessment Price (CAP) is used in the Energy Indebtedness calculations to convert Credit Cover into an energy value. A change to CAP can impact the amount of Credit Cover required by a BSC Party.

When the CAP rises it may affect the amount of credit cover that suppliers and generators are required to lodge with us. For some Parties this may mean additional collateral needs to be lodged. We recommend monitoring your Indebtedness and Credit Cover Percentage calculations on the Elexon Portal to understand how this change may affect your Party.

If all respondents and Credit Committee members are in agreement, the proposed value will be implemented on Friday 3 December 2021. Please note the last notified CAP value of £240/MWh will still be implemented on Thursday 18 November 2021.

Credit Committee members have decided to continue using the alternative Credit Assessment Price (CAP) Review process due to fast market conditions. This alternative process allows the Credit Committee to set a new CAP faster, review the CAP every two weeks and base their assessment on a wider range of data sources. Please note this alternative process is outlined in the CAP Review Process Guidance.

Submitting a response

You can respond to this consultation online. All responses must be submitted by 17:00 on Thursday 18 November 2021.

If you wish to save and return to your response, or share your response with a colleague before submitting then use the save and return button at the bottom of the form. You will then be given a link with your draft response that you can return to or share before submission.

For any enquiries about responding to this consultation, please contact [email protected]

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