Credit Cover explained
The purpose of Credit Cover is to ensure that, should a Trading Party default, sufficient collateral is available to pay any debts. If a Party does not have sufficient funds it will enter into Credit Default.
On this page
Consultation: Credit Assessment Price decrease to £177/MWh from 17 May 202226 April 2022
Consultation on CAP change to £235/MWh from 20 April 202229 March 2022
Consultation on CAP decrease to £215/MWh from 8 April 202222 March 2022
Consultation on CAP increase to £231/MWh from 17 March 202228 February 2022
Consultation on CAP decrease to £175/MWh from 8 March 202217 February 2022
Consultation on CAP decrease to £190/MWh from 22 February 20223 February 2022
Consultation on CAP decrease to £245/MWh from 8 February 202220 January 2022
Consultation on CAP increase to £340/MWh from 25 January 20225 January 2022
Credit Assessment Price to remain at £380/MWh – update published 5 Jan 202229 December 2021
Consultation on Credit Assessment Price increase to £380/MWh16 December 2021
Credit Assessment Price increase to £305/MWh30 November 2021
Consultation: Credit Assessment Price decrease to £230/MWh16 November 2021
Credit Assessment Price decrease to £240/MWh on 18 November5 November 2021
Consultation issued on 01 November on decrease of the CAP to £240/MWh1 November 2021
Alternative CAP Review process consultation18 October 2021
Credit Assessment Price increase to £259MWh from 4 November15 October 2021
Consultation issued on 4 October on increase of the CAP to £259/MWh4 October 2021
Credit Assessment Price increase to £184/MWh on 21 October1 October 2021
BSC Insight: What is Credit Cover and how does the Credit Assessment Price affect it?29 September 2021
BSC Insight: What is driving the latest increases in Credit Assessment Price?23 September 2021
CAP consultation issued on 20 September on further record level of £184/MWh20 September 2021
CAP consultation issued on 6 September on record level of £137/MWh6 September 2021
Credit Assessment Price to increase on 8 September 202120 August 2021
Credit Assessment Price Consultation 9 August 20219 August 2021
CAP increase announced for 3 August 202115 July 2021
Credit Assessment Price Consultation 5 July 20215 July 2021
CAP increase announced for 16 June 202126 May 2021
CAP increase consultation announced 17 May 202117 May 2021
CAP increase announced for 3 June 202113 May 2021
CAP increase consultation announced 04 May 20214 May 2021
CAP increase announced for 12 May 202121 April 2021
CAP increase consultation announced 12 April 202112 April 2021
CAP decreases to £54/MWh from 23 March 20213 March 2021
CAP increases to £64/MWh from 23 February 20211 February 2021
CAP increases to £62/MWh from 27 January 20216 January 2021
Credit Assessment Price (CAP) – price stays at £30/MWh3 June 2020
CAP decreases to £30/MWh from 16 April 202025 March 2020
CAP review consultation – decrease from £41/MWh to £36/MWh19 February 2020
Credit Assessment Price review outcome January 202014 January 2020
How it relates to you
Each BSC Party is required to lodge collateral with Elexon to ensure that there are sufficient funds available to cover that Party’s Trading Charges should the Party become unable to pay.
Under the BSC arrangements, payments to and from Trading Parties in respect of Trading Charges arising on any particular Settlement Day are made, on average, 29 calendar days later.
Therefore, at any given time, Trading Parties may have debts (or be due payments) in respect of Trading Charges incurred, on average, over the previous twenty-nine days.
Amount of Credit Cover
The BSC does not stipulate the amount of Credit Cover that Trading Parties must provide.
Instead Trading Parties decide on the level of Credit Cover that they wish to provide based on their Trading characteristics, and credit checking is intended to ensure that a Trading Party cannot accumulate a debt over the twenty-nine day period that exceeds the amount of Credit Cover provided.
Credit Assessment Load Factors
For the few days of the Credit Cover calculation, until real metered data becomes available, Credit Assessment Load Factors (CALFs) are one of the Parameters used to determine Credit Assessment Energy Indebtedness (CEI) for non-Interconnector, non-Credit Qualifying Balancing Mechanism (BM) Units.
Keeping Elexon informed
A credit check is completed each Settlement Period , 24 hours a day and if a Credit Default occurs it has to be progressed regardless of whether Elexon has been able to speak directly to the relevant Party.
Please help us to ensure that we have up to date contacts for your Party so that if a Credit Default occurs you can be contacted immediately during both working and non-working hours.
Please note that Parties are requested to keep Elexon informed of a contact (preferably more than one) that can deal with Credit Default issues both inside and outside of normal working hours.
In accordance with the BSC, a Credit Default has to be progressed regardless of whether Elexon has been able to speak directly to the relevant BSC Party. Therefore, without the most up to date contact details, a Party may risk going into Credit Default without having the opportunity to address any potential issues.
Contacts need to be updated every six months. To submit new or updated contact details, please complete the following template and submit it to [email protected]
Credit Assessment Price
The Credit Assessment Price (CAP) is a parameter set by the Credit Committee on behalf of the BSC Panel and subject to periodic review. The CAP is a notional pound value of 1 MWh of energy that is used in determining a Party’s Energy Indebtedness and amount of Energy Credit Cover and hence adequacy of Credit Cover.
- Elexon Portal – details of current and previous values of the CAP
- Calculating new CAP values (Credit data from the Trading Operations Report)
The Credit Committee is responsible for all matters under the BSC that relate to the CAP including determining the value.
A trigger level system is used to determine when reviews of CAP shall be held.
The Credit Default processes are triggered when a Party’s Credit Cover Percentage (CCP) exceeds a number of thresholds. The Level 1 Credit Default process is triggered when the CCP exceeds 80% and the Level 2 Credit Default process is triggered when the CCP exceeds 90%. The Party must reduce the Credit Cover percentage below 80% by the end of the query period to resolve the Credit Default
If a BSC Party believes that its Credit Cover Percentage is not accurate, then the Party can submit evidence to Elexon to be considered for Material Doubt.
Where the evidence is considered valid and substantial, Elexon will monitor the Credit Cover Percentage calculated by the central systems and estimate a corrected percentage.