1 / 108

BSC Panel 204

BSC Panel 204. 11 October 2012. Report on Progress of Modification Proposals. Adam Lattimore. 11 October 2012. Modifications Overview. 204/04 P274: Cessation of Compensatory Adjustments. Talia Addy 11 October 2012. P274: Issue.

tivona
Télécharger la présentation

BSC Panel 204

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BSC Panel 204 11 October 2012

  2. Report on Progress of Modification Proposals Adam Lattimore 11 October 2012

  3. Modifications Overview

  4. 204/04 P274: Cessation of Compensatory Adjustments Talia Addy 11 October 2012

  5. P274: Issue • Data for Settlement periods that have been subject to Final Reconciliation cannot be changed • If an error is identified in a Settlement Period it can be compensated for in a later period, that has not yet been subject to RF, by using Gross Volume Correction • P274 contends that the use of GVC can adversely affect Settlement • P274 seeks to more clearly define and impose restrictions on the use of such compensatory techniques

  6. P274: Proposed Solution • The P274 Proposed solution introduces definitions of GVC and Re-initialisation into the BSC • Re-initialisation formalises existing dummy meter exchange process • Restricts use of GVC to errors that are not ‘excessive’ and for volumes within 28 months of the date of GVC application • Mandates the use of Re-initialisation for excessive error volumes • Introduces requirements for NHHDC audit trail for both Re-initialisation and GVC • BSC changes are high level, details are in BSCP504 drafting

  7. P274: Alternative Solution • The P274 Alternativesolution continues to allow the use of GVC under existing rules but introduces a definition of GVC into the BSC and limits use of GVC to only volumes within a defined period • Limits would initially be five years prior to the latest RF Run at the date GVC is performed • Limit can be changed by the SVG following review • BSC changes are high level, details are in BSCP504 drafting

  8. P274: Proposed Modification Impacts and costs • ELEXON costs: • £1,200 (5 Man Days) • Industry Impacts: • Significant impacts and costs for both Suppliers and NHHDCs • One-off impacts and costs associated with system changes • On-going annual costs in additional resource to manage process • Impacts to GVC activities that would require staff training • Amending existing processes • Documentation changes

  9. P274: Alternative Modification Impacts and costs • ELEXON costs: • £1,200 (5 Man Days) • Industry Impacts: • Minor impacts and costs for Suppliers and NHHDCs • One-off costs and impacts associated with system changes • Little on-going annual cost in additional resource to manage process • Limited impact to GVC activities that would require staff training • Minor amendment of existing processes • Documentation changes

  10. P274: Implementation Date • Group Recommends an Implementation Date of: • Proposed - next BSC Release at least 12 months from approval date • For example, Implementation Date will be 7 November 2013 (November Release) if approval is received by 7 November 2012 • Alternative - next BSC Release at least 3 months from approval date • For example, Implementation Date will be 28 February 2013 (February Release) if approval is received by 28 November 2012

  11. P274: Consultation Responses • Respondents consisted of 5 Suppliers (1 small, 4 big), 1 Distributor and 2 Party Agents • No new arguments raised • Workgroup addressed comments received on solutions and drafting

  12. P274: Applicable BSC Objectives (1 of 4) • Majority of Workgroup members believe P274 Proposed would notbetter facilitate Objectives (c) and (d) • Objective (c) • Creates a barrier to entry as new Suppliers are likely to have difficulty managing data and addressing issues • Restriction GVC use would decrease the accuracy of Settlement • Objective (d) • Introduces significant additional complexity and cost • Arrangements excessively onerous on Suppliers and Supplier Agents • There is no defect in the BSC so changes are unnecessary • The issues identified by P274 arose due to the implementation of CP1310 and are unlikely to recur

  13. P274: Applicable BSC Objectives (2 of 4) • Minority of Workgroup members believe P274 Proposed would better facilitate Objectives (c) and (d) • Objective (c) • New entrants less likely to have energy volumes attributed to them that relate to periods before they began trading • Reduces attribution to Suppliers of energy volumes that relate to periods with different wholesale energy prices • LDSOs better able to produce suitable forward looking Line Loss Factors for use in Settlement • Addresses unreasonable GVC usage, i.e. application over excessive periods • Objective (d) • Additional incentive to settle the correct volume of energy within the 14-month reconciliation window • Review of threshold introduces flexibility into the arrangements

  14. P274: Applicable BSC Objectives (3 of 4) • Majority of Workgroup members believe P274 Alternative Modification would better facilitate Objectives (c) and (d) • Objective (c) • Provides additional control around GVC and confidence in GVC application, which should be generally beneficial for competition • Addresses unreasonable GVC usage • Objective (d) • Review of threshold introduces flexibility into the arrangements • Retains GVC as a sensible means of correcting errors

  15. P274: Applicable BSC Objectives (4 of 4) • Minority of Workgroup members believe P274 Alternative Modification would not better facilitate Objectives (c) and (d) • Objective (c) • If an error is identified it should be corrected in its entirety, which GVC currently permits and the Alternative would limit • Objective (d) • Additional complexity for no benefit • No change is required

  16. P274: Conclusions • Majority of Workgroup therefore believes: • Only the Alternative better than the existing baseline • P274 Alternative is better than P274 Proposed • Workgroup’s majority recommendation is: • Approve P274 Alternative Modification • Reject P274 Proposed Modification

  17. P274: Recommendations (1 of 2) The Panel is invited to: • NOTE Assessment Report • AGREEdraft BSC & BSCP504 legal text for Proposed and Alternative • AGREE Implementation Date: • Proposed Modification - next BSC Release at least 12 months from the date of approval • Alternative Modification - next BSC Release at least 3 months from the date of approval

  18. P274: Recommendations (2 of 2) • AGREE views against Applicable BSC Objectives: • Agree Proposed Modification not better than baseline against Objectives (c) and (d) • Agree Alternative Modification better than the baseline against Objectives (c) and (d) • Agree Alternative Modification better than Proposed Modification against Objectives (c) and (d) • AGREE initial recommendation to: • Approve Alternative Modification (and therefore reject Proposed) • AGREE to submit P274 to Report Phase • ELEXON will issue Report Phase Consultation • Draft Modification Report to December Panel meeting

  19. 204/05 P282:‘Allow MVRNs from Production to Consumption or Vice Versa’ David Kemp 11 October 2012

  20. P282: Issue (1 of 2) BM Unit • Current arrangements: Production and Consumption kept separate • Fundamental principle of NETA • Keep level playing field between different types of Party • Promotes liquidity • Energy from BM Units allocated to Lead Party’s corresponding Energy Account • P BM Units to P Energy Account • C BM Units to C Energy Account P C P C Energy Account

  21. P282: Issue (2 of 2) BM Unit • Can use MVRNs to reallocate energy to corresponding Energy Account of another Party • Can reallocate either a specified volume or a percentage of the BM Unit’s volume • Can only use MVRNs from: • P BM Units to P Energy Accounts; or • C BM Units to C Energy Accounts • Trading between Production and Consumption must be done using ECVNs • ECVNs must be for specified volumes of energy • MVRNs can be for a percentage of the BM Unit’s volume P C P C Energy Account

  22. P282: Solution BM Unit • Proposal: Allow MVRNs from P BM Unit to C Energy Account or vice versa • Would also allow a Party to MVRN energy from own P BM Unit to own C Energy Account or vice versa • Can replace relevant ECVNs with percentage MVRNs • Proposer considers: • P282 increases flexibility for smaller Parties • Larger Parties have found ways around current restrictions • Exempt Export BM Units can currently choose P/C Status P C P C Energy Account

  23. P282: Costs and Impacts • Costs: • Central Costs: Approx. £140k • Party Costs: Range from minimal to £130k • Participant Impacts: • MVRNAs • BSC Trading Parties • ECVAA and SAA • Document Impacts: • BSC Sections D, P, T, X-1 & X-2 • ECVAA & SAA Service Descriptions & URSs • NETA IDD Part 2

  24. P282: Applicable BSC Objectives (1 of 5) • Workgroup’s majority view is to Approve P282 • Views based on Applicable BSC Objectives (b), (c), (d) and (e)

  25. P282: Applicable BSC Objectives (2 of 5) • ‘Winners’ and ‘Losers’ from P282 • Reduction or no change in Parties’ imbalance charges • But reduction in amount of RCRC, disbenefiting Parties paid RCRC • Parties worse at balancing seem to benefit the most from P282 • Only benefit if long in one Account and short in the other • Net shortfall in one Account with gain in other – avoid SBP/SSP spread • Notified Volume Charge also impacted • Calculated on volume of ECVNs and fixed-volume MVRNs • P282 likely to result in ECVNs being replaced with percentage MVRNs • Materiality much lower than imbalance charge/RCRC impacts

  26. P282: Applicable BSC Objectives (3 of 5) • P282 will allow Parties to consolidate all volumes in one Account • Biggest benefit to Parties on both sides of market • May allow smaller Parties to club together, but other obstacles remain • Interconnector Users could net imports and exports • SO feels P282 may increase no. of balancing actions required • Reduce incentive to go long, reducing ‘free’ reserve • Constraint actions could become balancing actions – impact SBP/SSP • But ‘self-balancing’ could help balance system • Consideration that P282 unlikely to have significant impact on incentive to balance

  27. P282: Applicable BSC Objectives (4 of 5) • Unconvinced separation of Production and Consumption has led to intended liquidity • Can currently use ECVNs/MVRNs to ‘self-balance’ • Unconvinced P282 will have material impact on liquidity • Impact confined to short-term intra-day market due to better self-balancing • Unsure about longer-term – impacted by other factors • Liquidity about who Parties trade with, not number of Energy Accounts

  28. P282: Applicable BSC Objectives (5 of 5)

  29. P282: Consultation Responses • Views of respondents split equally for and against • Agree with Workgroup’s views for and against • No new arguments raised

  30. P282: Implementation Date • Workgroup recommends Implementation Date of: • 07 Nov 13 if P282 is approved on or before 07 Feb 13 • 27 Feb 14 if P282 is approved after 07 Feb 13 but on or before 27 May 13 • Lead time to make required Central System changes • ECVAA, SAA and Funding Share changes

  31. P282: Conclusions • Workgroup has discharged its Terms of Reference • Workgroup recommends that P282isApproved

  32. P282: Recommendations (1 of 2) The P282 Workgroup invites the Panel to: • AGREEan initial recommendation that P282 should be made; • AGREE an initial Implementation Date of: • 7 November 2013 if an Authority decision is received on or before 7 February 2013; or • 27 February 2014 if an Authority decision is received after 7 February 2013 but on or before 27 May 2013; Continues

  33. P282: Recommendations (2 of 2) • AGREE the draft legal text; • AGREE that P282 is submitted to the Report Phase; and • AGREE that ELEXON will issue the P282 draft Modification Report (including the draft BSC legal text) for a 15 Working Day consultation and will present the results to the Panel at its meeting on 13 December 2012.

  34. 204/06 P285:Revised treatment of RCRC for Interconnector BM Units David Kemp 11 October 2012

  35. P285: Issue • CMP202: Removed BSUoS charges from Interconnector BM Units • Implemented on 30 August 2012 • Proposer considers RCRC to be related to imbalance cost element of BSUoS • Potential to distort cross-border trades • Potential for windfall gains/losses • Could also be perceived as non-compliant with Third Package • Requires no additional charges levied on cross-border trades • P285 raised following consideration of relationship by CMP202 Workgroup

  36. P285: Solution • Proposal: Exclude Interconnector BM Units from RCRC • RCRC would be allocated based on Parties’ non-Interconnector volumes • Materiality: Approx. 3% of total RCRC • Net redistribution of £700k in 2011 • Materiality of current situation low, but should be resolved as soon as possible

  37. P285: Costs and Impacts • Costs: • Central Costs: Approx. £70k • Combined central saving of 40% if deployed in parallel with P286 • Party Costs: Range from minimal to £10k • Participant Impacts: • Interconnector Users and IEAs • All other BSC Trading Parties that are subject to RCRC • SAA and ECVAA • Document Impacts: • BSC Section T • SAA Service Description & URS

  38. P285: Applicable BSC Objectives (1 of 3) • Workgroup’s majority view is to Approve P285 • Views based on Applicable BSC Objectives (a), (c) and (e)

  39. P285: Applicable BSC Objectives (2 of 3) • Unclear if RCRC is a charge on cross-border flows • Part of imbalance cash-out mechanism, which Third Package permits • Not convinced RCRC and BSUoS are related • RCRC part of imbalance charges; BSUoS is a cost-recovery mechanism • Believe correlation is poor

  40. P285: Applicable BSC Objectives (3 of 3)

  41. P285: Consultation Responses • Majority of respondents agree with Workgroup’s view • Agree with Workgroup’s views for and against • No new arguments raised

  42. P285: Implementation Date • Workgroup recommends Implementation Date of: • 27 Jun 13 if P285 is approved on or before 24 Jan 13 • 07 Nov 13 if P285 is approved after 24 Jan 12 but on or before 06 Jun 13 • Lead time to make required Central System changes

  43. P285: Conclusions • Workgroup has discharged its Terms of Reference • Workgroup recommends that P285isApproved

  44. P285: Recommendations (1 of 2) The P285 Workgroup invites the Panel to: • AGREEan initial recommendation that P285 should be made; • AGREE an initial Implementation Date of: • 27 June 2013 if an Authority decision is received on or before 24 January 2013; or • 7 November 2013 if an Authority decision is received after 24 January 2013 but on or before 6 June 2013; Continues

  45. P285: Recommendations (2 of 2) • AGREE the draft legal text; • AGREE that P285 is submitted to the Report Phase; and • AGREE that ELEXON will issue the P285 draft Modification Report (including the draft BSC legal text) for a 15 Working Day consultation and will present the results to the Panel at its meeting on 13 December 2012.

  46. 204/07 P286: Revised treatment of RCRC for generation BM Units David Kemp 11 October 2012

  47. P286: Issue • CMP201: Proposes to remove BSUoS charges from generation BM Units • CUSC Panel recommends implementing Original Solution • Currently with Ofgem for decision • Allows GB generators to compete on equal basis with imports over Interconnectors • Proposer considers RCRC to be related to imbalance cost element of BSUoS • Potential for windfall gains/losses • P286 raised following consideration of relationship by CMP201 Workgroup

  48. P286: Solution • Proposal: Exclude BM Units in delivering Trading Units from RCRC • RCRC would be allocated based on Parties’ volumes from BM Units in offtaking Trading Units • Materiality: Approx. 35% of total RCRC • Net redistribution of £7.5m in 2011

  49. P286: Costs and Impacts • Costs: • Central Costs: Approx. £70k • Combined central saving of 40% if deployed in parallel with P285 • Party Costs: Range from minimal to £10k • Participant Impacts: • Generators • All other BSC Trading Parties that are subject to RCRC • SAA and ECVAA • Document Impacts: • BSC Section T • SAA Service Description & URS

  50. P286: Applicable BSC Objectives (1 of 3) • Workgroup’s majority view is to Approve P286 • Conditional on CMP201 being approved – if CMP201 is rejected, then Workgroup’s unanimous view is to Reject P286 • Views based on Applicable BSC Objectives (a), (b) and (c)

More Related