CAP will decrease to £56/MWh from 6 March 2019

On 6 March 2019, the Credit Assessment Price (CAP) value will decrease from £68/MWh to £56/MWh. Parties may notice a change in their Credit Cover Percentage, and should review the amount of Credit Cover lodged.

Why has this happened?

A consultation paper on the value of CAP was issued on Monday 4 February 2019 following a breach of the CAP trigger level. Parties were invited to indicate whether they agreed with the proposal to decrease the value of CAP to £56/MWh, from its current approved level of £68/MWh.

The consultation closed on Tuesday 12 February 2019. All responses were in agreement with the proposed value and therefore, in accordance with the CAP Review Guidance, a Credit Committee meeting will not be held.

Revised CAP

The CAP value will decrease from £68/MWh to £56/MWh. The CAP review trigger level value will remain at its current value of +/- £6/MWh.

Calculating CAP

We have published a webpage with two interactive graphs displaying the CAP and the Reference Price. The new graphs are versions of those contained within our consultation and will be updated weekly.

The CAP Review Process

On the first working day of each week, we compare the value of CAP to the Reference Price, which is derived from average monthly forward market prices currently provided by ICIS Heren. Where the absolute difference between the two values exceeds the trigger level, it is termed a ‘trigger event’.

Once a new CAP value is notified to BSC Parties, the weekly trigger process is resumed on the first working day of the following week. The trigger process uses the newly notified CAP value for the comparison with the Reference Price.

Following a trigger event, we issue a consultation proposing that the CAP is changed to the current Reference Price.

Following the consultation, if at least one respondent or Credit Committee member requests it, ELEXON will arrange a Credit Committee meeting to determine the new CAP value. If all respondents and Credit Committee members agree with the proposed value no meeting will be held.

If a Credit Committee meeting is held, the Credit Committee will confirm the date from which change will take effect. This date will not be less than 15 Working Days after BSC Parties receive notification of the change.

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