Issue 98 ‘Review of the current practice of setting Dynamic Parameters’

Strict compliance with the market manipulation rules following Ofgem’s ‘Open letter on Dynamic Parameters and other information submitted by generators in the Balancing Mechanism’ may lead to a less economic/efficient outcome than what some generating plant was doing prior Ofgem’s open letter being published.

There is a difference between the absolute limit of a technical parameter that a unit can operate at and the level at which it can do so in the most economically efficient manner. For example pushing a generation unit to the limit of its Minimum Zero Time would be more expensive due to the associated risks. Therefore, there is a commercial trade-off between risk and capability.

We are seeking to engage Market Participants to join an Issue Group to help review the current practice of setting Dynamic Parameters within the Balancing Mechanism.

Issue 98 was raised by Energy UK on 13 October 2021.

The first Issue 98 Workgroup was held on 25 November 2021.

The second Issue 98 Workgroup was held on 4 February 2022.

The third and final Issue 98 Workgroup was held on 9 March 2022.

The Issue 98 Issue Report was tabled at the Panel meeting on 9 June 2022.