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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.

Current Status

Submission

Assessment Procedure

Report Phase

With Authority

Awaiting Implementation

Implemented

Assessment Procedure

An updated Terms of Reference (ToR) will be presented to the Panel at its next meeting on 14 December.

If the ToR are agreed on 14 December, the first Workgroup meeting will be set up, the earliest this would be is W/C 8 January 2024.

If you are interested in joining the P462 Workgroup, please sign up via this link: Modification and Issue Workgroup sign-up.

Submission

P462 was raised by NGESO on 27 October 2023. The Proposer has requested that P462 is sent for assessment by a Workgroup.

Elexon has published the Initial Written Assessment for P462 which was presented to the BSC Panel on 9 November 2023. (344/05)

The Panel agreed to submit P462 to the Assessment Phase with the recommendation that the Terms of Reference (ToR) should be updated to reflect the Panel’s feedback from the meeting on 9 November, prior to the first Workgroup meeting taking place. An updated ToR will be presented to the Panel at its next meeting on 14 December.

P462 Initial Written Assessment

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P462 Proposal form

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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

Current Status

Assessment Procedure

Submission

My BSC