P462 ‘The removal of subsidies from Bid Prices in the Balancing Mechanism’
Formal title: The removal of subsidies from Bid Prices in the Balancing Mechanism
This Modification aims to reduce consumer cost potentially caused by the interaction between the BM and support mechanism arrangements. This shall be done by removing distortion of support mechanisms (such as Contracts for Difference (CfDs) and the Renewables Obligation (RO) schemes) to reduce actions being taken outside of consumer cost order when following the Bid stack merit order.
The proposed solution for consideration by an industry Workgroup is to modify the equation BSC Section T ‘Settlement and Trading Charges’ paragraph 3.11 to pay the lost support mechanism.