Ofgem has launched a consultation into the implementation and governance arrangements of the introduction of half-hourly settlement.
It follows the regulator’s announcement on 20 April that it will implement market-wide half-hourly settlement (MHHS) to allow for a more flexible energy system in Britain.
The consultation will look to gain views on the obligation on parties, the governance structure, independent assurance and Ofgem’s role.
Ofgem is looking for views on the new provisions to the Balancing and Settlement Codes (BSC) primarily within the obligation of parties segment of the consultation. This includes the proposed obligations on Elexon and its role as the administrator of the BSC, with the goal of ensuring the ownership and accountability is clear.
For the governance structure, the regulator is looking to see if industry parties agree with the approach it has taken to governance, with Ofgem also asking for companies to set out preferred alternatives.
Independent assurance for the implementation of MHHS will be anchored in set principles, Ofgem clarified, designed to ensure it is well managed. This includes the independent assurance function, which will allow independent evidence to disagreements to be brought forward. Within the consultation, it lays these out in detail and requests comment.
Finally, Ofgem is consulting on its own role as Programme Sponsor within the implementation, and in particular the thresholds of its intervention and involvement. It queries amongst other aspects whether intervention from the regulator should be based on five key criteria of: adherence to the Target Operating Model, delivery of benefits and costs, timeliness of delivery, impact on competition and consumer impact.
The consultation is set to run till 25 June, following which Ofgem will produce a consultation decision in summer/autumn 2021.
For more information and to take part in the consultation, see here.
