Decision to direct the value of NGESO’s Electricity Market Reform Dispute Resolution Incentive 2020/21
Decision
- Publication date
- Industry sector
- Transmission Network
- Licence type
- Electricity Transmission Licence
Related links
This letter sets out our decision, following consultation with the licensee, on the value of the 2020/21 Electricity Market Reform (EMR) Dispute Resolution Incentive (DRI) pursuant to Special Condition 4L.7 of National Grid Electricity System Operator’s (NGESO) Electricity Transmission Licence in effect for the 2020/21 regulatory year.
The Dispute Resolution Incentive adjusts NGESO’s revenue, in its role as the EMR Delivery Body (EMR DB), depending on the number of the EMR DB’s reconsidered decisions that are overturned following an appeal to the Authority. The reconsidered decisions are referred to Ofgem under Regulation 70 of the Electricity Capacity Regulations 2014 (as amended), and under Part 7 of the Contracts for Difference (Allocation) Regulations 2014 (as amended).
The incentive has a value of ±£100,000 for the Capacity Market (CM) scheme, and ±£100,000 for the Contracts for Difference (CfD) scheme dependent on the number of overturned determinations by the Authority as calculated using the formula set out in Special Condition 4L.5. Therefore, the total incentive value is ±£200,000. For both CM and CfD individually, NGESO are eligible for the maximum value of £100,000 if no appeals to the Authority against reconsidered decisions made by the EMR DB are overturned. Conversely, NGESO are penalised the maximum value of -£100,000 if four or more decisions made by the EMR DB are overturned.
NGESO’s total Dispute Resolution Incentive value (DRI) for the year 2020/21 is -£65,000.