Electricity Market Reform Capacity Market Implementation Plan

Transcription

1 Electricity Market Reform Capacity Market Implementation Plan This implementation plan identifies the key milestones and activities required to successfully implement the Capacity Mechanism Version 1.2 Published 9th September (Updated (Update from July ) Page 1

2 Contents Introduction... 3 Scope and Status... 3 Implementation Approach... 4 Roles and Responsibilities... 5 Government... 5 National Grid (Implementation Co-ordinator)... 5 National Grid (Delivery Body)... 5 Electricity Settlement Company (Settlement Body)... 6 Elexon (including Capacity Market Settlement Agent)... 6 Ofgem... 6 Key Activities and Milestones... 7 Annex A: EMR Capacity Market Implementation Plan, December 2013 June Annex B: EMR Capacity Market Implementation Plan, July January Version Original version published by DECC Updated version to reflect final legislation and updated implementation approach Updated version to reflect extension to Prequalification application window and knock-on impact to all subsequent milestone dates. Also to reflect revised wording for credit cover activities. (changes from version 1.1 are shown in red text within the Key Activities and Milestones section) December 2013 July September

3 Capacity Market Implementation Plan Introduction In December 2013 the Government published the first Capacity Market Implementation Plan in order to provide potential participants in the Capacity Market with details of the key Capacity Market implementation activities and milestones. The Implementation Plan was one of the outputs of the Electricity Market Reform (EMR) Collaborative Development Programme which took place between August 2013 and December 2013 and was based on implementing the Capacity Market as set out in the Electricity Market Reform: consultation on proposals for implementation (the EMR October Consultation Document) and the accompanying draft legislation published in October In July, an updated plan was published to reflect the final design of the Capacity Market Regulations/Rules and the latest implementation proposals from National Grid and other delivery partners. This September update provides the latest version of the plan and reflects changes made to the timetable as a result of extending the prequalification window in order to provide applicants with more time to consider the final Regulations/Rules and prepare their applications. The update also includes amended wording for credit cover activities. National Grid is publishing this update as part of its role as Implementation Co-ordinator for the Capacity Market. Scope and Status The updated timeline for the implementation of the Capacity Market is based on the Government s response to the October 2013 consultation and the subsequent secondary legislation/rules which came into force on 1st August. The plan brings together milestones from Government and each of its delivery partners. It is intended to provide a high level overview of the steps involved in the implementation of the Capacity Market and the running of the first pre-qualification and auction process, such that industry participants have the clarity they require to plan and manage their own implementation activities. Figure 1 provides an overview of the relative timings of capacity auctions and delivery years. Although this includes the proposed demand side response (DSR) specific auctions for context, this plan does not include any activities associated explicitly with the implementation of the transitional arrangements for DSR capacity. The implementation plan is a summary plan and does not replace or replicate the detailed implementation plans that Government, delivery partners and individual industry participants may need to produce to manage their respective implementation activities. Page 3

4 Capacity Market Implementation Plan Implementation Approach The first capacity auction will be held in December. It will be open to all types of eligible capacity and will award capacity agreements, which will come into effect in October This auction, 4 years ahead of delivery, is called a T-4 auction. The first year-ahead (T-1) auction will take place in late 2017 for capacity agreements which also come into effect in Figure 1 illustrates the relative timings of the standard Capacity Market auctions, the DSR transitional arrangement auctions and the associated delivery years. Figure 1 Overview of proposed capacity auctions Page 4

5 Capacity Market Implementation Plan Roles and Responsibilities A number of organisations will work together to implement the Capacity Market. This section focuses on these organisations roles in relation to the implementation phase covering the first pre-qualification and auction process. Government Overall responsibility for implementation of the EMR Programme including the Capacity Market Reporting to Ministers / communication of Ministers decisions Finalising the design and implementing legislation Establishing the Electricity Settlements Company (Capacity Market Settlement Body) Securing state aid clearance Appointing the panel of technical experts Managing updates to codes and licences Producing the EMR Delivery Plan and annual updates to it Managing any future changes to regulations National Grid (Implementation Co-ordinator) National Grid will fulfil the role of Implementation Co-ordinator for the Capacity Market. This will involve: Owning and maintaining the Capacity Market Implementation Plan Co-ordinating implementation activities across delivery partners and potential capacity providers Engaging with potential capacity providers on implementation issues and their readiness to participate in the Capacity Market Collating, tracking and helping to resolve implementation issues Passing policy issues to Government when raised at implementation events National Grid (Delivery Body) As the delivery body for the Capacity Market, National Grid will be responsible for: Procuring and implementing core systems to support the running of capacity auctions and the pre-qualification process, and the implementation and maintenance of the capacity register Designing and implementing business processes to support capacity auctions and pre-qualification, and producing supporting documentation/guides including the auction guidelines Designing and implementing business processes to support the management of each delivery year, i.e. contract management, spot testing Page 5

6 Capacity Market Implementation Plan Implementing processes and systems and testing these with stakeholders Producing annual capacity reports for Government, which will advise on capacity requirements to meet the published reliability standard Appointing the Auction Monitor Electricity Settlements Company (Settlement Body) Established to provide ultimate accountability, governance and control of the monies collected and disbursed under the Capacity Market (Payment) Regulations. During the implementation phase, responsible for the design and implementation of the processes and systems it needs to fulfil its role. Responsible for contracting a settlement agent to carry out the administrative functions associated with the collection and verification of bid bonds and collateral Elexon (including Capacity Market Settlement Services Provider) The settlement body will be ultimately accountable for the holding of bid bonds and collateral ahead of the auction. It is intended that the settlement agent (Elexon) will carry out the verification of bid bonds and collateral on behalf of the settlement body. During the implementation phase, Elexon will also be responsible for the following activities: Procuring settlement agent services and systems Managing changes to Balancing and Settlement Code (BSC) systems Drafting some changes to balancing and settlement documentation Designing and implementing payment related processes and systems Ofgem Designing, implementing and publishing processes for changes to Capacity Market rules Modifying enforcement guidelines for EMR (if required) Handling disputes which have been escalated following the delivery body disputes process Page 6

7 Key Activities and Milestones Activity/Milestone Owner 1 Delivery Plan published Publish the final reliability standard and the methodology for the demand curve in the delivery plan 19th December 2013 Government 2 Publish draft Capacity Market Rules "change process" Consultation on the draft governance and change mechanism for Capacity Market Rules April Ofgem 3 Electricity capacity modelling and analysis Modelling and analysis work to provide recommendation on the target volume and the demand curve for the T-4 auction March June Delivery Body Receipt of winter data Receipt of Government input assumptions 4 "Informal" auction guidelines Initial publication (which will need to be confirmed once secondary legislation is in force) to include: 1. s for pre-qualification opening/closing/results and the provisional auction date 2. Details of pre-qualification IT systems including the format for applications 3. Auction Parameters (inc demand curve and target volume) 4. De-rating factors 5. Details of the Delivery Body decision review process 30th June Delivery Body IT systems Electricity Capacity modelling Auction parameters from Government Dependencies

8 Activity/Milestone Owner 5 Offline applicant Registration starts can submit offline Registration details via templates provided by the Delivery Body w/c 14th July Applicant/ IT systems testing complete Delivery Body 6 Provide access to Delivery Body prequalification IT systems Provide access and instructions to applicants to enable bulk upload of pre-qualification data w/c 21st July Delivery Body IT systems 7 Legislation and code/licence changes in force Secondary legislation comes into force (along with all directed code/licence changes) 1st August Government Parliamentary process 8 Electricity Settlements Company operational Electricity Settlements Company fully operational 1st August Government Electricity Settlements Company incorporated and bank accounts in place. 9 Publish final Capacity Market Rules change guidelines Publish final guidelines on the governance and change mechanism for Capacity Market Rules. 1st August Ofgem Consultation completion 10 Publish auction determination and parameters Confirm that an auction is required and publish this confirmation alongside final auction parameters 1st August Government Secondary legislation in force 11 Publish "Formal" auction guidelines Publish final guidelines to reflect Government auction parameters 1st August Delivery Body Secondary legislation in force Government publication of auction parameters Page 8 Dependencies

9 Activity/Milestone Owner Dependencies 12 Pre-qualification window opens IT systems "active" and applicants submit formal registration and data submission 4th August Delivery Body/ Secondary legislation in force IT systems 13 Pre-qualification window closes Last date for applications to be submitted 5th September Secondary legislation in force IT systems 14 Publish Tier 2 Publish guidelines on the tier 2 disputes guidelines disputes processes. 29th August Ofgem Consultation completion 15 Pre-qualification results day 3rd October Delivery Body Secondary legislation in force Completion of pre-qualification application assessments IT systems Inform applicants of the outcome of assessment and issue conditional pre-qualification certificates to all. Provide Government with aggregate de-rating capacity for each category of applicant and any recommendation for adjusting the demand curve (as a result of plant opting out whilst still operational) Update CM Register and share information with Ofgem and Elexon 16 Reconsideration request (Tier 1) window open Opening date for applicants to ask the Delivery Body to review its prequalification decision 3rd October 17 Earliest date for posting collateral Earliest date that applicants can post collateral with the Electricity Settlements Company 6th October Page 9 Pre-qualification results day

10 Activity/Milestone Owner Dependencies 18 Reconsideration request (Tier 1) window closed Closing date for applicants to ask the Delivery Body to review its prequalification decision 10th October 19 Deadline for applicants to post credit cover with ESC that receive a notice of conditional pre-qualification from the Delivery Body must lodge credit cover in pre-qualification 10th October Deadline is 5 business days after pre-qualification results day 20 Delivery Body decision review (Tier 1) complete notified of the Delivery Body s reconsidered decision (via reconsidered decision notice) 17th October Delivery Body Any/all Delivery Body decision reviews complete Deadline is 5 business days after pre-qualification results day Capacity Register updated Government notified of decision review outcome 21 Tier 2 dispute submission window opens Opening date for applicants to raise a dispute with Ofgem against the pre-qualification outcome 17th October 22 Tier 2 dispute window closes Closing date for applicants to raise a dispute with Ofgem against the pre-qualification outcome 24th October 23 Publish updated auction guidelines Publish updated Auction 27th October Parameters (as a result of opt outs). Confirm status to conditionally prequalified applicants. Deadline is 5 working days after the Delivery Body reconsideration notice is issued/received Delivery Body Government update to Delivery Body on parameters Page 10

11 Activity/Milestone Owner Dependencies 24 Initial credit cover verification Latest date for ESC to notify applicants that have posted credit cover whether their credit cover has been approved 31st October Electricity Settlements Company 25 Initial notification of Latest date that applicants who credit cover to have been notified that their original Delivery Body credit cover has been approved must notify the Delivery Body 7th November Within 5 Working days of ESC notifying applicants whether their credit cover has been approved Initial collateral verification results Collateral re-posting Delivery Body needs this information 25 business days before the auction starts Deadline for applicants to repost credit cover to ESC Within 15 working days of applicants posting credit cover Latest date that applicants who have been notified that their original credit cover has not been approved must re-post credit cover for second verification 26 Final credit cover verification Latest date for ESC to approve resubmitted credit cover 11th November Electricity Settlements Company 27 Enable IT auction system access for user trials Provide auction IT system access to all pre-qualified applicants to enable user trials (interactive, scripted mini-mock auctions using dummy data) 11th November Delivery Body Page 11 IT systems

12 Activity/Milestone Owner Dependencies 28 Tier 2 dispute process target completion date Following completion of tier 2 disputes, inform appellants and Delivery Body of outcomes. 21st November Ofgem Tier 2 disputes assessed and decisions made where possible by 21st November 29 Final date for Planning Consent submission Final date for new build applicants to submit Planning Consent evidence to the Delivery Body 21st November Delivery Body providing Prequalification system access 30 Pre-qualification confirmation Delivery Body notifies new build 24th November applicants that submitted late Planning Consents of their final prequalification status 31 Process unsuccessful tier 2 dispute applicants Remove IT systems access from unsuccessful tier 2 dispute applicants & update the Capacity Register 24th November Delivery Body Completed Tier 2 disputes confirmed by Ofgem 32 Publish "Final" auction guidelines and bidder details Publish final guidelines to include: 25th November Delivery Body Government notification of final auction parameters Completion of tier 2 disputes process and notification Results of collateral verification Must be published 15 business days before the auction Final deadline for Delivery Body to confirm prequalification status for applicants requiring credit cover 1. and time the auction will start; 2. Notification of post-dispute identity and status of prequalified CMUs; 3. Any updates to Auction Parameters since October; 4. Details of Auction Monitor Delivery Body Applicant submissions Page 12

13 Activity/Milestone Owner Dependencies 33 Closing date for auction status confirmations to Delivery Body Last date for applicants to submit confirmations to the Delivery Body, including: 2nd December Delivery Body providing appropriate system access 34 Provide final auction access codes Delivery Body provides final auction access codes to all confirmed, prequalified applicants 2nd December Delivery Body Completion of Tier 2 disputes Receipt of all applicant auction status confirmations 35 Submit all auction status confirmation information to Government Delivery Body collates all auction status confirmations and submits to Government for assessment of auction liquidity 4th December Delivery Body Receipt of all applicant confirmations 36 Run mock auction Run mock auction with all confirmed, pre-qualified applicants (interactive, scripted using real CMU data) 8th December Delivery Body IT systems User Trials complete 37 Start auction Start the first auction round 16th December Delivery Body IT systems Publication of "Final" auction guidelines and bidder details Auction monitor operational 38 Complete auction Auction closes 19th December Delivery Body Auction clearing 1. Existing Price Maker/Taker 2. DSR Size + In/Opt out 3. New/Refurbished In/Opt out + agreement length Page 13

14 Activity/Milestone Owner 39 Notify bidders whether, based on provisional results, they have been awarded a capacity agreement (with the details) 19th December Delivery Body Auction closing (must be notified within 24 hours of closing) Notification of provisional auction results Dependencies Notify Government and Ofgem of the provisional results 40 Auction monitor report Auction monitor provides report on auction to Government 23rd December Delivery Body Auction closing (must be provided within 2 business days of closing) 41 Auction results day Publish results of the auction to bidders, the auction monitor and other administrative parties 5th January 2015 Delivery Body Auction closing (must be published within 8 business days of closing) 42 Issue capacity agreements Issue agreements to successful bidders No later than 30th January 2015 Delivery Body Auction results day (must be issued within 20 business days of results day) Page 14

15 EMR Capacity Market Implementation Plan Version 1.2 Capacity 2013 Market Implementation Plan Dec Jan Feb Mar Apr May Jun Government Analysing consultation responses, finalising policy and draft secondary legislation Annex A: EMR Capacity Market Implementation Plan, Dec 2013 June Royal assent to Energy Bill Consultation closes 1 Delivery plan published Government response to consultation published Includes final reliability standard and methodology for the demand curve Code and licence changes Ofgem Consultation on Capacity Market Rules change process Publish draft Capacity Market Rules change guidelines 2 DeliveryBody Auction IT systems design and build To provide recommendations on the target volume and the demand curve for the T-4 auction Electricity capacity modelling and analysis Pre-qualification IT systems design and build Implementation planning Includes: s for pre-qualification opening / closing / results and the provisional auction date Details of pre-qualification IT systems including the format for applications Auction Parameters (including demand curve and target volume) De-rating factors Details of the National Grid disputes process Applicant CapacityMarket SettlementBody 3 Implementation planning Electricity Settlements Company setup Key DECC Delivery body Ofgem Applicant Settlement body Page 15 4 Informal auction guidelines

16 Capacity Market Implementation Plan Annex B: EMR Capacity Market Implementation Plan, July January 2015 EMR Capacity Market Implementation Plan Version 1.2 Government Jul Aug Sep Oct Nov Dec 01/08 Legislation and code / licence changes in 7 force 01/08 Publish auction determination and 10 parameters Ofgem 9 01/08 Publish Capacity Market Rules change guidelines 14 Consider disputes 29/08 Publish Tier 2 disputes guidelines 17/10 Decision reviews complete and reconsideration notices issued 05/09 Prequalification window closes Pre-qualification prep 12 04/08 Prequalification window open 13 Assess applications 15 Review Decisions 21/11 Tier 2 dispute process 28 target completion date 27/10 Publish 23 updated auction guidelines 24/11 Process unsuccessful tier 2 dispute applicants 20 03/10 Prequalification results day /12 Submit all auction 35 status confirmations to Government 25/11 Final Auction Guidelines published, final prequalification status notified 11/11 Provide IT system access for User Trials 27 02/12 Provide auction access codes to 34 confirmed pre-qualified bidders 19/12 Complete 37 Auction 38 Auction Applicant CapacityMarket SettlementBody 24/11 Notify New Build of final preq status 30 21/07 Applicant access to Delivery Body pre-qualification IT systems Key DECC Delivery body Ofgem Applicant Settlement body Request Application 6 User Trials 16 Review Dispute 22 03/10 10/1017/10 24/10 17 Post 19 credit 06/10 Earliest cover 10/10 Deadline date for submitting credit cover 01/08 Electricity 8 Settlements Company operational 21/11 Final date for New 29 Build to submit planning consents Participant User Trials for posting 25 credit cover 07/11 Notify credit cover to DB / credit cover reposting deadline Verify credit 24 cover 31/10 Initial credit cover verification 23/12 Auction Monitor report 40 submitted to Government 16/12 Start Auction Participant User Trials 14/07 Offline applicant registration starts 5 Jan Consider auction status/outcome Update auction parameters 01/08 Publish "Formal" auction 11 guidelines DeliveryBody /12 Mock Auction 33 02/12 Closing for auction status confirmation 11/11 Final credit cover verification 26 Page /01 Auction Results Day 19/12 Notification of provisional Auction results 42 30/01 latest date to Issue Capacity Agreements

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