- Publication date
- 13th August 2019
- Closing date
- 10th September 2019
- Policy areas
We are consulting on our proposals to adjust revenue allowances for National Grid Electricity System Operator (NGESO) to fulfil its role as the Delivery Body (DB) for Electricity Market Reform (EMR) for the period April 2016 to March 2021.
The EMR DB has achieved effective delivery of the EMR Framework, including the Capacity Market (CM) and Contracts for Difference (CfD) regimes in the context of a high volume and pace of change. We recognise that the DB has driven process improvements in order to manage this change and minimise cost impacts.
Additional spend to deliver EMR over this period is associated with significant investment in the IT administration system (the ‘Portal’) which has required continuous development to maintain functionality and adapt to change. Additional revenues are proposed to be allowed where justified and efficient.
Recognising the continuing critical feedback on the functionality and flexibility to change of the Portal, funding is proposed to be provided to replace this IT administration system and thereby achieve a step change in user experience and value for money by April 2021. We do not believe it would be value for money to allow additional revenue to initiate further changes to the Portal. We consider that the DB should prioritise the replacement IT administration system.
The total cost to deliver the replacement system is uncertain, hence we have considered the appropriate method to manage this uncertain spend and the justification for a future Uncertainty Mechanism (UM) to assess additional efficiently incurred costs. Under the scenario of a continuing EMR framework, this proposed UM would be recommended to be solely to manage the cost of the new system. However, we do recognise the current standstill period for the CM and await the decision of the European Commission on State Aid clearance. Significant urgent policy changes resulting from this decision or further external disruption to the operation of the EMR framework would be considered under this proposed future UM.
We would like views from people with an interest in the CM or CfD regimes. We would also welcome responses from other stakeholders and the public.