CMP308: Removal of BSUoS charges from Generation

This proposal seeks to modify the CUSC to better align GB market arrangements with those prevalent within other EU member states. This will deliver more effective competition and trade across the EU and so deliver benefits to all end consumers.

Modification status: Current - Awaiting Decision

Last updated: 23 September 2021

Code Administrator Contact: Joseph Henry - [email protected]

Governance Route: Standard 

Impacts:

* High: Our estimate is that GB generation was disadvantaged, compared to our European trading partners and other interconnected countries, by an extra cost of approximately £600m in 2017. GB interconnection growth is set to significantly increase from 4GW today to 8GW by 2021 and, with Ofgem’s approved pipeline, up to 18GW by the early 2020s. In the long run removal of a distortion in the wholesale market will ensure more effective competition which is in consumers’ interests: i.e. will ensure dispatch and investment in new generation is more efficient.

* Medium: As a result of CMP202, the G:D split in terms of the total BSUoS payments made by generation versus those made by demand in 2017 was around 49:51 and is expected to be 47:53 by 2020. This reduces the cost increase for suppliers to a value that is roughly equal to the reduction in GB wholesale prices. With sufficient lead time for implementation, our modelling indicates that that the consumer impacts in the short-term are neutral.

Documents

Proposal

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