Section M: Credit Cover and Credit Default

Section M covers the provision of Credit Cover by each Trading Party and the consequences in the event that this Credit Cover is insufficient. These consequences are primarily the refusal and rejection of Energy Contract Volume Notifications (ECVNs) and Metered Volume Reallocation Notifications (MVRNs) as provided for in Section P. Consequences of persistent Credit Default are also outlined in Section H.

Accordingly, Section M sets out:

  • calculation of a Trading Party’s Energy Indebtedness
  • the basis on which a Trading Party’s Energy Credit Cover will be determined
  • the calculation to determine the amount of a Trading Party’s Energy Credit Cover
  • circumstances which constitute Credit Default and the consequences of Credit Default
  • Trading Party compensation arrangements in certain circumstances where errors have been made in calculations under Section M

Content list

  • General
  • Credit Cover
  • Reduction of Credit Cover
  • Energy Credit Cover
  • Credit Default Status
  • Level 1 Credit Default
  • Level 2 Credit Default
  • Authorisation by Elexon
  • Result of Trading Dispute
  • Credit Cover Errors and Compensation


Annexes M-1 to M-3 provide examples of acceptable Letters of Credit and Approved Insurance Products.

Any Letter of Credit and Approved Insurance Product provided by a Trading Party must  substantially be in the form of one of the examples set out in Annex M-1 to M-3 (or another form approved by the Panel).


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