P410 ‘Changing imbalance price calculations to comply with the Imbalance Settlement Harmonisation regulations’
Formal title: Changing imbalance price calculations to comply with the Imbalance Settlement Harmonisation regulations
P410 sought to introduce changes to the imbalance price calculations to ensure BSC compliance with the European Imbalance Settlement Harmonisation regulations.
Following discussions with Ofgem and BEIS regarding interpretation of the UK-EU Free Trade agreement, NGESO submitted a new Imbalance Settlement Methodology (ISM) for approval by Ofgem, as the sole relevant approval authority. This updated proposal retained the ability to maintain the Market Index Price as a component of the Imbalance Price calculation. Given the potential distortive effects of introducing a Value of Avoided activation (VOAA) compliant with the previous Imbalance Settlement Harmonisation Proposal (ISHP), NGESO determined this to be the best course of action.
Ofgem approved NGESO’s ISM proposal on the 15th December 2021. The decision letter can be found here.
The amended ISM is consistent with the current mechanics of the BSC, and so the defect being addressed by P410 ‘Changing imbalance price calculations to comply with the Imbalance Settlement Harmonisation regulations’ no longer exists. As such National Grid ESO withdrew P410 on 5 January 2022, and it officially closed 1t 12:00 on Thursday 13 January 2022 following the end of the adoption window.
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