Cash Out Arrangements

If a market participant generates or consumes more or less electricity than they have contracted for, they are exposed to the imbalance price, or ‘cash-out’, for the difference. Cash-out directly affects the incentives on electricity market participants to invest in secure supplies, so the arrangements are central to the delivery of a secure and competitive electricity market.

The aim of the cash out arrangements review was to provide incentives for sufficient investment in capacity to ensure an efficient level of security of supply.