Thank you to our industry colleagues who responded to the ODFM EBGL consultation. It was submitted to Ofgem on the 19th March 2021, the documents submitted to Ofgem can be found below.
In accordance with the requirements of EBGL Article 18, National Grid ESO is holding a consultation on terms and conditions of the reinstated Optional Downward Flexibility Management (ODFM). The ODFM service has been developed to mitigate low electricity demand risks resulting from unprecedented changes caused by COVID-19 pandemic. We are consulting on the mapped ODFM Contract Documents listed below.
We recognise where providers have previously told us that service improvements could be made to ODFM, and whilst we welcome your views and comments through this consultation, we are also keen to highlight that changes to this years' service will only be made where necessary, economic and efficient to do so. One such area we do not propose to change is a movement to pay-as-clear pricing. Analysis shows that pay-as-bid is much more economically efficient than pay-as-clear. We therefore propose to seek a derogation for ODFM to remain as pay-as-bid. A derogation was not required last year because ODFM was not a specific product.
We will explore improvements in parallel to the consultation, it is unlikely that significant changes such as addressing imbalance and cashout can be accommodated due to the costs and time that would be required. Our focus will instead be on more enduring solutions that offer greater value to the end consumer. ODFM is not considered to be an enduring solution to downward flexibility management. The enduring solution will be delivered through our Reserve Reform programme, while wider access to the Balancing Mechanism also provides a continuous route to an enduring downward flexibility service.
We wish to remind you that whilst our central case for this summer suggests there is no requirement for ODFM, our forecasts demonstrate that there are credible worst-case scenarios where we might experience lower demand periods for longer durations that could require additional downwards flexibility. We therefore feel it is prudent to have access to an ODFM service for the Summer of 2021. The service will only be instructed in the event that such challenging conditions occur and will therefore be in place to insure against the need for emergency disconnections.
Consultation closes: 15 March 2021 at 17:00 ahead of submission to Ofgem.
The consultation is now closed and was submitted to Ofgem: 19 March 2021.
Responses to the consultation must be sent to: [email protected]