Statutory Consultation for adjusting the Electricity Market Reform Delivery Body Incentives and mechanisms to recover uncertain costs

Publication date
11th March 2020
Closing date
17th April 2020
Policy areas

We are consulting on our proposals to make changes to National Grid Electricity System Operator’s (NGESO) Electricity Transmission Licence in relation to their role as the Electricity Market Reform (EMR) Delivery Body (DB).   

We propose to enable an Uncertainty Mechanism (UM) window in March 2021 to manage uncertain costs through changes to NGESO’s Special Condition 7D. This UM will provide appropriate funding to cover efficient and appropriate uncertain costs.

We have reviewed the incentive framework for NGESO undertaking the role of the EMR DB and following prior consultation, we intend to retain three of the four incentives. Following consultation and review, the DSR participation incentive, which adjusts revenue as a result of the DB encouraging and facilitating participation of DSR providers in the Year Ahead Capacity Auction, does not appear to be fit for purpose.  We propose to remove this incentive from NGESO’s Special Licence Condition 4L. 

We would like views from people with an interest in the Capacity Market or Contract for Difference regimes. We would also welcome responses from other stakeholders and the public.