DMAT and CADL will be reduced on 1 April 2019

Ofgem have approved the changes to these parameters following the recommendation of the Imbalance Settlement Group (ISG) and the BSC Panel.

How it relates to you

The following changes will take effect on 1 April 2019:

  • The De-Minimis Acceptance Threshold (DMAT) will reduce from 1MWh to 0.1MWh
  • The Continuous Acceptance Duration Limit (CADL) will change from 15 minutes to 10 minutes

The System Price Analysis Report will monitor how these changes affect Imbalance Prices.

Prior to implementation, ELEXON will be publishing System Prices recalculated with DMAT of 0.1MWh and CADL of 10 minutes on the ELEXON Portal.

Background to these changes

Consultation

We issued a consultation to industry on 24 October 2018 explaining why we proposed reducing CADL from 15 minute to 10 minutes and reducing DMAT from 1MWh to 0.1MWh.

Ofgem acceptance of the Panel recommendation

Dear Victoria, BSC Panel Secretary,

I am writing to you on behalf of the Authority to accept the recommendation of the Panel, to change the De Minimis Acceptance Threshold (DMAT) value from 1MWh to 0.1MWh and to change the Continuous Acceptance Duration Limit (CADL) value from 15 minutes to 10 minutes.

The Authority has considered the analysis and stakeholder views put forward in the paper presented to the December 2018 BSC Panel, 285/13 and has concluded that the changes are an improvement on the current pricing parameters. These changes should further the benefits delivered by P217a, by more accurately removing system pollution from imbalance pricing.

It is the view of the Authority that the changes, to come into effect on 1 April 2019, continue to further Objective (b) – the efficient, economic and co-ordinated operation of the GB transmission system and Objective (c) – promoting effective competition in the generation and supply of electricity, and (so far as consistent therewith) promoting such competition in the sale and purchase of electricity.

We expect the ISG to continue to monitor the impact of these changes and, if necessary, propose future changes to these parameters in accordance with BSC Sections T1.8 and T1.9. We welcome the recommendation that the next scheduled review of DMAT and CADL should be held in two years’ time with the provision to trigger this review earlier if necessary.

Regards,
Grendon Thompson
Head of Electricity SO Regulation
Signed on behalf of the Authority and authorised for that purpose

What are DMAT and CADL?

DMAT and CADL are two parameters used for tagging and flagging actions in the Imbalance Price Calculation. ELEXON reviews these parameters from time to time as part of the Parameter Review process.

In the 2018 DMAT and CADL parameter review, ELEXON identified that the parameters should change so the Imbalance Price could better reflect the real time value of balancing energy.

ELEXON presented the results of their review to the ISG and Panel and issued a consultation to get industry views on the change.

DMAT and CADL were introduced into the Imbalance Price calculation in 2001; this will be the first change to their values since their introduction.

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