NGESO seeks early views on changes to charging methodologies

The electricity system operator has asked for early industry input over the way it applies charges for a number of the actions it takes to manage the system. The process applies to the charging regimes for specific actions but the outcomes can make or break the financial case for some industry participants and will materially affect many of them.

The way costs are allocated and balancing actions charged have been subject to extensive change in recent years and will continue to be so. New rules from the European Commission in relation to the EU’s Internal Energy Market, so-called ‘pathfinder’ projects introduced by National Grid ESO, new products to manage issues like reserve, reactive power and stability, and changes to longstanding products like short term operating reserve, have all changed the pattern of charges and payments for system particpants and changes are continuing. NGESO also highlights a number of changes which will affect the future of balancing services and how they are procured.

NGESO consults each year on changes to the charging methodologies for its system balancing activities (referred to as C16 consultations). This year’s consultation will open in January for new methodologies that will apply from winter 2020/21, but the ESO said stakeholders had asked for more opportunity to input views earlier in the process. The ESO has already held one stakeholder workshop and the ‘informal’ consultation is the next step in this process.

The ESO said information gathered through this consultation will begin to form NGESO’s official change proposals, which will be documented in the official consultation on 13 January 2020.

Meanwhile the ESO is also consulting on new commercial arrangements that will apply to interconnectors if the system operator has to call on them during system management. Along with other system assets, the ESO sometimes calls for more or less supply from specfic interconnectors than is contracted in order to balance supply and demand. The EC’s  Internal Energy Market rules for such actions have changed  (and NGESO says they will continue to apply after Brexit) and new commerical arrangements both for compensation and for allocating associated charges. A consultation on the new arrangements (details here) closes on 3 Decemner and will also feed into NGESO’s C16 consultation.

See the full pre-consultation here