Issue 106 ‘Review of BSC Credit Cover Arrangements’

Existing Credit Cover arrangements have not been sufficient to cover outstanding Trading Charges in most market failures in the past. This has led to debt mutualisation of over £71m through the Default Funding Share accumulated over the last five years. These arrangements do not consider the additional BSC Trading Charges that collateral may be required to cover if a Supplier has not sufficiently balanced their Settlement position.

There is a direct link between market prices for electricity and Credit Cover requirements. As market prices fluctuate, the amount of credit to be lodged with the BSC also fluctuates. Further, as the market goes through a period of change to meet future consumer needs, such as changes being introduced as part of Market-wide Half Hourly Settlement (MHHS), now is a good time to review whether wider credit calculations remain fit for purpose.

The Issue 106 Final Report was tabled for the BSC December 2024 Panel and can be found below.

Issue 106 was raised by Elexon on 13 January 2023.