Energy storage and flexibility

Dialing up the unknowns on network charging

In a world of open governance code modifications, change is a constant. You only have to look at the number of code modifications ongoing at any one time – National Grid lists 36 modifications in development relating to transmission network charging alone – for evidence of that. But in recent...

Energy storage and flexibility

Network charging – what’s been going on and why should I care?

The electricity network charging landscape is complex and ever-changing. We discuss recent implemented reforms and changes we expect to see.

Business supply and services

Re-balancing the balancing costs –BSUoS charges to be levied solely on suppliers from April 2023

CMP308 will be implemented on 1 April 2023 and, while an Ofgem decision is still awaited on the proposal to make BSUoS a fixed volumetric charge, transmission-connected generators now have clarity that they will no longer be liable for BSUoS costs from this date.

Low carbon generation

What to look out for in Third Party Charges in 2022-23

In recent months, the GB energy market has been exposed to extreme volatility as wholesale prices have grown rapidly, leading to a significant number of supplier exits and questions over consumer affordability of energy bills. This has resulted in notable movement across a number of non-commodity costs (also known as...

Commercial and market outlook

Cliff-hanger: supplier new entry in volatile markets

The extraordinary developments that have occurred in the energy sector in recent months have led to a tumultuous time for all participants. We have taken a look back through our archives to where we highlighted our concerns a number of years ago that this outcome was, unfortunately, a real possibility. This...

Regulation and policy

Answers to some FAQs about Brexit

Following the end of the transition period on 31 December 2020 and the signing of the Trade and Cooperation Agreement, aspects of the relationship between UK and the EU in respect of the arrangements for energy trading and cooperation have changed. We set out answers to some Frequently Asked Questions...

Commercial and market outlook

A look back at 2020 part 4

The COVID-19 crisis forced many bodies and companies to change their priorities and caused major wholesale price changes. With another national lockdown announced this week, the pandemic is certain to remain a significant factor this year.

Commercial and market outlook

A look back at 2020 part 2

The lower demand and action to curtail high renewables output, with solar and wind hitting record levels, led to a sharp rise in Balancing Services Use of System (BSUoS) costs

Low carbon generation

Analyse thy neighbour: Interconnectors and their importance to future power prices

Whilst this is an extreme example of the impacts of weather correlated pricing events, it does highlight how wider factors in Europe can have a material impact on GB wholesale price formation.

Home supply and services

COVID-19-driven changes to electricity Third Party Charges

However, due to the scale and length of the impacts resulting from the COVID-19 outbreak, and the industry’s various methods of cost recovery, the effects on TPCs are likely to be felt for many years to come.

Energy storage and flexibility

FiT costs to reach all-time high amid COVID outbreak

Suppliers have many balls to juggle, but the regulator is cementing its position that it cares most about how customers are treated.

Low carbon generation

The Balancing Mechanism and BSUoS under lockdown

With increased BSUoS costs coming at a time of difficulty for the market, the deferment of additional BSUoS costs would be a welcome relief to suppliers and transmission connected generators alike.

Regulation and policy

Industry codes flex for COVID-19

Ofgem is still considering UNC721 and UNC725, that would enable shippers to update closed sites’ consumption volumes (Annual Quantity and Supply Offtake Quantity) more frequently, and which would see reductions in energy allocation and transportation charges where the customers have reduced or discontinued activities.

Energy storage and flexibility

BSUoS in COVID-19

This week National Grid Electricity System Operator (“the ESO”) released its latest forecast of Balancing Services Use of System (BSUoS) charges – levied on suppliers and large generators to recover costs incurred by the ESO in managing the system on a second by second basis. In this blog we look...

Regulation and policy

Spring renewal: CMP332 withdrawn pending reinvigoration

Ofgem’s Targeted Charging Review (TCR) has been a major workstream in the electricity industry since it was kicked off in March 2017. Looking at several elements of the network charging regime that were deemed no longer fit for purpose in the changing energy system, it has wound its way towards...

Home supply and services

From “what if?” to “what now?”

This article was originally published on 6 April 2020 in Energy Spectrum Issue 709.

Energy storage and flexibility

Storage story: a regulatory run-down

It will be a little while yet before we see true parity between storage and generation, but the direction of travel is clear.

Low carbon generation

Editor’s Pick | A marathon and a sprint? What next for onshore renewables?

Our own long-term power market model, utilised to produce our Benchmark Power Curve, incorporates net zero scenarios and shows that onshore wind capacity is likely needed to be 16.0GW to 22.0GW by 2030 to ensure we are on a pathway to meet net zero targets. For solar PV, the level...

Energy storage and flexibility

I can change – what’s wrong with the Capacity Market (and what we need to do to fix it)

The return of the Capacity Market (CM) after its legal hiatus in November 2019 was a relief to many owners and developers of generating capacity in GB. But I think it’s time to ask whether it’s really the best tool to reach net zero at lowest costs to consumers. The...

Commercial and market outlook

Editor’s Pick | The latest chapter in the ongoing network charging saga

The TCR is just one element of a package of major reforms which are underway. It is, in theory, complemented by the Network Access and Forward-Looking Charges SCR (the “Access SCR”). Both are looking at Distribution and Transmission Use of System (DUoS and TNUoS) charges and both have wide-ranging implications.

Commercial and market outlook

Network Charging Reforms Factsheet: Targeted Charging Review

This factsheet summarises the key changes which will be implemented following Ofgem’s decision on the TCR, noting that Forward Looking Charges are also under review under the Network Access and Forward Looking Charges SCR.

Low carbon generation

Constrained development: Scottish wind and the issues of network charging

Under subsidy schemes, there is also a pipeline of over 800MW of Remote Island Wind (RIW) projects looking to develop in the Scottish Isles under the Contracts for Difference (CfD) scheme.

Regulation and policy

BSUoS task force report sets scene for Targeted Charging Review decision

The strong support for the BSUoS task force conclusions in the short consultation on its draft findings gives weight to the charge continuing to be treated as a cost recovery charge, rather than a forward-looking charge that users can reasonably respond to.

Commercial and market outlook

Five things we learnt from Energy Spectrum | 659

In this week’s Energy Perspective, we set out the main developments in the GB Capacity Market since the November 2018 ruling by the European Court of Justice that led to its suspension including, most recently, the European Commission’s confirmation it is to undertake a full investigation into the scheme.

Commercial and market outlook

Five things we learnt from Energy Spectrum | Issue 652

We present five key themes and findings from this week’s edition of Energy Spectrum issue 652

Regulation and policy

Can Capacity Market costs be recovered via a ‘mirroring’ process in the Balancing and Settlement Code?

The deliberations could come to naught if it is found that the proposed approach does not meet BSC Objectives, which are framed around effective operation of the wholesale market and transmission system (and make no explicit reference to the CM), and more fundamentally if it is ruled that it is...

Low carbon generation

Owner of a lonely heart: Intraday continuous liquidity

When the I-SEM detailed design was released, many participants were concerned about potential liquidity issues in the Intraday Continuous (IDC) market. It would seem that their concerns have merit. As the first few weeks of I-SEM have certainly displayed low volumes in comparison to the Day-Ahead Market (DAM) and three...

Low carbon generation

Paradise Lost: The changing face of Embedded Benefits

Embedded benefits have risen in value as network charges, in the round, have increased for suppliers primarily due to the required investment in electricity networks to replace ageing assets

Commercial and market outlook

This week’s Energy Spectrum overview | 14 May 2018

In this week’s Energy Perspective, we consider the current options for appealing industry code changes, following the Competition and Markets Authority (CMA) issuing its final determination on the allocation of costs in relation to the EDF Energy/SSE appeal on an electricity transmission charging rule change (CMP261), relating to alleged breach...

Home supply and services

Index of Domestic Energy Supply Costs | March 2018

Overall the data upon which the indices are based shows that a growing proportion of supplier costs come from third party charges.