Consultation on reducing the Credit Assessment Price to £36/MWh
A new Credit Assessment Price (CAP) of £41/MWh was implemented on 12 February 2020. As a result, Parties may have noticed a change in their Credit Cover Percentage, and should review the amount of Credit Cover lodged. For more information, please refer to ELEXON Circular 3105.
What is the Credit Assessment Price?
The Credit Assessment Price is used in the Energy Indebtedness calculations to convert Credit Cover into an energy value. The BSC requires that suppliers and generators (known as BSC Parties) hold collateral with ELEXON. This is so that there are sufficient funds to cover outstanding charges, should they be unable to pay. This is known as Credit Cover.
Wholesale electricity prices continue to fall
Since this new Credit Assessment Price value was agreed on 21 January, wholesale electricity prices have continued to fall. This has triggered a new CAP review by ELEXON as the reference price has fallen below the new CAP lower trigger level of £37/MWh.
We are now consulting on reducing the Credit Assessment Price to £36/MWh. The consultation is available for you to view and respond to on the Consultations page of our website.
Deadline for responding to our consultation
Trading Parties can comment on the consultation using the consultation proforma available on the consultations page. Please send your responses to Credit.Committee@elexon.co.uk by 17:00 on Tuesday 18 February 2020.
When would the new Credit Assessment Price be implemented?
If all respondents and Credit Committee members agree with the proposed value, there will be no Credit Committee meeting and the new CAP value will be implemented on the proposed date of Wednesday 11 March 2020.
However, if one or more respondents or a Credit Committee member requests it, ELEXON will arrange a Credit Committee meeting after the consultation closes to determine the new CAP.
Want to know more about the CAP?
You can find more information on the CAP, the Credit Committee and the review process on the Credit Committee page of our website. We have also published FAQs to help you become more familiar with this process.