P371 Inclusion of non-BM Fast Reserve actions into the Imbalance Price calculation
Formal title: Levelling the playing field - Inclusion of Spin-Gen, Non-BM Fast Reserve and Non-Tendered Fast Reserve actions into the calculation of the Imbalance Price and extension of the cash-out price arrangements to Fast Reserve
Currently Spin-Gen, Non-BM and Non Tendered Fast Reserve actions are not included in the Imbalance Price calculations. The Proposer contends that in order to guarantee a correct calculation of the Imbalance Price, fair and harmonised treatment of all services, greater transparency and, ultimately, National Grid’s compliance with the Balancing Services Adjustment Data (BSAD) obligation; the aforementioned Fast Reserve actions should be included in the Imbalance Price calculation. The current calculation of the Imbalance Price is sending incorrect messages to the industry and distorting the market signal, this lack of transparency is potentially impacting the behaviour of market participants, affecting costs for end consumers. National Grid should, therefore, send the correct signal to the market to inform participants about the constraint and the required level of capacity.
The Proposer contends that there is no reason for a different treatment of Reserve products and Non BM Fast Reserve should have been captured already in the calculation of the Imbalance Price via the BSAD and via the Reserve Scarcity Price (RSP) methodology. This Modification is about Non BM Fast Reserve, however, the implementation of this Modification will remove any potential ambiguity and make it clear to the Electricity System Operator, when developing future Balancing Services and associated systems that all Actions should flow through into the Imbalance Price calculation.
This Modification Proposal aims to include the price of Spin-Gen, Non-Balancing Mechanism (BM) Fast Reserve and Non-Tendered Fast Reserve actions into the calculation of the Imbalance Price. The aim is to correct the calculation of the Imbalance Price; guarantee fair and harmonised treatment of all services which cost should be included; provide greater transparency and, ultimately, ensure National Grid’s compliance with the Balancing Services Adjustment Data Methodology Statement (BSAD).
In order to align the Modification Proposal form with the Proposers views, which were conveyed to the Modification Secretary before the deadline for Panel submission, we have slightly amended the Modification Proposal to ensure that P371 remains technology neutral, thus aiding the development of a principal based solution; the revised version (2.0) can be found below.
The Panel considered the Draft Modification Report at its meeting on 12 September 2019, where it recommended P371 be approved.
The Report Phase Consultation was issued 13 August with responses due by 27 August 2019.
At its meeting on 8 August, the Panel considered the Assessment Report and submitted P371 to the Report Phase.
The fourth Workgroup was held on 16 July 2019.
The Assessment Procedure Consultation was Issued on 17 June 2019 with responses due by 5 July 2019.
The third Workgroup was held on 5 June 2019.
The second Workgroup was held on 13 March 2019.
The first Workgroup was held on 24 October 2018.
P371 was raised by UK Power Reserve on 11 September 2018. The Initial Written Assessment was presented to the Panel at its meeting on 13 September 2018, where the Panel agreed to submit P371 into Assessment Procedure.
The Final Modification Report was submitted to the Authority for decision on 20 September 2019.