Market integration england wales and scotland
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Market Integration: England, Wales and Scotland. Brian Saunders. The information in this presentation has been collated by ELEXON and while all due care has been taken to ensure the accuracy of this information, ELEXON accepts no responsibility for errors. Contents. ELEXON and NETA

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Market integration england wales and scotland

Market Integration: England, Wales and Scotland

Brian Saunders

The information in this presentation has been collated by ELEXON and while all due care has been taken to ensure the accuracy of this information, ELEXON accepts no responsibility for errors.


Contents

Contents

  • ELEXON and NETA

  • The BSC is not NETA

  • How is it supposed to work?

  • How has it worked?

    • Prices, volumes, changes

  • Impact on/of the market

  • Security of Supply

  • NETA to BETTA There are two T’s in BETTA


Overview of the e w electricity market place

Overview of the E&W Electricity Market Place

Transmission and SO

Private Monopoly

No generation – open access

Can trade for system balancing

Shallow Connection Charges

Mild Zonal UoS Charges

Self Despatch

Partial separation of SO/TO coming

RPI –x Control

Distribution

12 Private Monopolies

No Supply or Generation (but can be owned by VI companies)

Open access

Facing major change if distributed generation grows

RPI-x Control

Supply

Private

Fully competitive

No “Host Supplier” (legally)

Fragmented competitive services

No price controls

Generation

Private

Fully competitive

Some Vertical Integration of Generation and Supply

Diverse mix for now

No price controls


Elexon s role in neta

ELEXON’s Role in NETA

ELEXON &Panel

Contracts

Trading

New Electricity Trading Arrangements

(E&W)

BSC

Risk Management

Exchanges


Problems of the pool

Problems of the Pool

  • One price

  • Mechanism

  • Manipulable

  • Compulsory

Production

set the price

Demand

Took the price

  • Barrier

Also inherently difficult to change


Exchanges

Exchanges

  • 2 Exchanges – UKPX & APX

    • Typical Exchange Volumes

      *Contracts* Volume

  • Standardise Contract Form – GTMA

    • Bilateral

  • Volume in BM – 2%

    • SO can buy forward


Market integration england wales and scotland

Contract Notifications

Meter Readings

Cashout Prices - SSP/SBP

Accepted Bids & Offers

Energy Imbalance Cashout

System Operator Charges

Spread of Surplus

Settlement

Accepted Bids and Offers

And PX data

(Don’t forget competition

for 22 million customers)

Settlement Process


Transmission cross border

Transmission & Cross Border

  • UoS Charging -Slightly zonal

    -Developing TTR

  • Interconnectors-Auction for Capacity

    -Trade at entry

  • Connection-Shallow


Why the design intent of the bsc

Why? The design intent of the BSC

  • Replace the Pool

  • Encourage bi-lateral trading

  • Enable competition for Balancing Services

  • Allocate costs of imbalance

  • Responsive governance

  • Get out of the way!


Imbalance cash out prices

Imbalance Cash out prices


Wholesale prices

Wholesale Prices


Wholesale prices1

Wholesale Prices


Volumes

Volumes

  • Imbalance volume ~2%

  • Total notified contracts 3 times physical consumption

  • Number of notifications 4.7 million* since Go live

    * As at 09/06/03


Flexible

Flexible?!

  • 143 Proposed Modifications to the BSC

  • 114 decisions made, 12 withdrawn

  • Many already implemented


Impact on the market

Impact on the Market

  • Low wholesale generation prices, but rising

    (NETA plus )

  • Some consolidation

  • Vertical integration

  • Industrial and commercial customers happy

  • Doubts about pass through to domestic customers – more work on change of supplier in hand


Impact of the market

Impact of the Market

  • BSC and NETA coped well with corporate failures and administration

  • Credit arrangements well tested - robust but complex - Cash or LoC only; Credit Rating not accepted

  • Security of Supply?


Security of supply

Security of Supply

  • This was examined carefully by a report to Government and by a recent White Paper by Government

  • Security of Supply (generation) has been left to the market

  • Government and Regulator have statutory responsibilities

  • Some mothballing – No major permanent closures yet. SO caution


Neta to betta

NETA to BETTA

  • Working so well it is being rolled out to include Scotland

  • There are two T’s in BETTA

    British Electricity Trading and TransmissionArrangements


The big change

The Big Change

  • System and Transmission Operation

GB System Operator

How deep?

England and

Wales

TO

Scotland TO

Scotland TO

Scottish and

Southern

Scottish Power

NGC


Gb settlement

GB Settlement?

  • BSC to GB BSC

  • Extension of geographic scope

  • Consequential changes only

  • Still a significant piece of work for ELEXON


Summary

Summary

  • NETA has worked and delivered its design intent

  • Recent reviews have identified no major changes

  • Flexible governance has enabled beneficial change – more to come

  • Roll out to GB – transmission issues still outstanding

    BUT THE LIGHTS HAD BETTER STAY ON!


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