Calculating new CAP values

The Credit Assessment Price (CAP) is used to determine a Party’s Energy Indebtedness. These graphs show the reference CAP and the live CAP and are used by Elexon to support the regular CAP Review process.

Data used for the CAP Review process

These graphs show the reference CAP and the live CAP. On a particular date, these values may not match as the reference CAP is the value used to assess whether the CAP value needs to be reviewed and the live CAP is the value used in Credit Cover calculations.

The Reference Price is derived from average monthly forward market prices currently provided by ICIS Heren. The Reference Price is essentially a forward price which covers a two month period.

Once the reference price has been calculated, it will be compared against the latest reference CAP value. Where these two prices deviate by more than the trigger level value, it will be termed a trigger event and trigger a review of the CAP.

Reference Price and CAP

This graph shows the Reference Price in comparison to the reference CAP value and the upper and lower trigger level limits.

The area shaded in yellow on this graph indicates periods where the value of the CAP was under review.

A review can be triggered by the absolute difference between the reference CAP value and the reference price being greater than the upper trigger level or below the lower trigger level.

30 day moving average SBP and CAP

This graph shows the 30 day moving average System Buy Price (SBP) and the live CAP.

The CAP is intended to be a proxy for outturn System Prices.

Credit Committee’s role

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.


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