1. Implementation Co-ordination Workshop
12th February 2015

2. CM Delivery 2015 Welcome Safety Introductions Agenda
Re-Visit 2014 Success Factors

3. Agenda Time Topic 09:30 Introduction Summary of 2014
Feedback from the 2014 Capacity Auction
Feedback from 2014 Prequalification
10.30
Coffee Break
11.00
IT systems update
Next steps for 2018 Agreement Holders
Expected changes for 2015
2015 Timetable
Q&A
13:00
Close

4. 2014 CM Implementation Success Factors
Description
Pre-qualification & the Auction happened on time
Planned dates were met / only moved under an agreed governance process
The Auction ran and cleared in 2014
Capacity was procured for delivery year of 2018/19
Pre-qualification ran smoothly and all applicants had the best opportunity to successfully pre-qualify
Rules/Guidelines were finalised in time, available to everyone, simple to understand and delivered the results expected
Procedures were explained, available to everyone, simple to understand and supportive (e.g. helping not blocking)
NG Systems were simple to use; ready on time; seen, tested and understood by applicants in advance; worked as intended and gave the results expected
Applicant Systems were ready on time and able to communicate with NG Systems as expected
The Auction ran smoothly and all bidders had the best opportunity to secure a capacity agreement
As above for Pre-qualification
The Auction was “liquid”, included a diverse range of technologies/applicant sizes and offered best value to consumers
The Auction Monitor approved the auction outcome
Settlement is on schedule for delivery
Smooth transfer of data from NG to Elexon
Payment/Settlement systems implementation is on track
Generators and Suppliers are confident of delivery of fit-for-purpose Settlement systems

5. Summary of 2014
Ian Nicholas

6. 2014 Capacity Market Summary
67.29GW of Capacity Prequalified for the 2014 Auction representing 501 Capacity Market Units
48.6GW target Auction held over three days and 12 rounds in December 2014
49.26GW of Capacity Procured representing 306 Capacity Market Units
Clearing Price of £19.40/kW and total expenditure in 2018/19 of approx. £950million (2012 prices) 6

7. 2014 Auction Readiness 240 Authorised Users ‘Bidders’ 77 Companies
Multi format user training Material
3 Auction training Events; 130 users trained/ 900exit bids/13 backup bidding calls/ 30 calls general queries
Screen Cast
user guides
Mock Auction
Real Auction

8. Feedback
Since the auction there have been a number of feedback sessions
We have held lessons learnt sessions internally and with the Delivery Partners
DECC held an Industry Feedback session
Ofgem have commenced their Rule Change Process
We have assessed other feedback received during the process.

9. Feedback from the 2014 Capacity Auction
Ian Nicholas

10. How it is being addressed
Feedback and Q&A from 2014 Auction
Auction
Feedback
How it is being addressed
The auction took a long time to run and the rounds could be much shorter
Carried out bidder behaviour analysis, likely suggested change would be similar first round and recess with latter rounds being shortened.
Target Capacity needed more transparency winter outlook and capacity adequacy reports differed
The reporting uses different methods which is explained in the modelling stakeholder engagement, Panel of Technical Experts involvement and DECC.
Not clear when the results would be available (intra round results)
The auction guidelines will clarify how DECC and NG will report the 2015 auction
Why was excess capacity rounded
Remove the opportunity to act when the capacity is close to clearing the round.

11. How it is being addressed
Feedback and Q&A from 2014 Auction
Auction
Feedback
How it is being addressed
Can the Price maker status be made public
Ofgem review and rule change process is looking into this area.
DBA and Exit bid function (1yr refurb issue)
DECC review and rule change process
Information clarity i.e. de rating capacity entering auction
DECC review and rule change process/ possibly a review of the CM register summary details.

12. Feedback from 2014 Prequalification
Mark Duffield

13. How it is being addressed
Feedback and Q&A from 2014 Auction
Prequalification
Feedback
How it is being addressed
Late changes to rules caused a lot of problems
DECC and Ofgem are looking to ensure that any changes are made in plenty of time this year.
Legal opinion and declaration documents seem over necessary
We have proposed a Rule Change to combine the certificates and declarations (P062). A further change has been proposed to remove the legal opinion (P023).
Rule (b) states that a previously provided legal opinion can “roll over” providing the information remains accurate and up to date.
Prequalification process is intensive
Many of the rule changes proposed by NGET are intended to streamline the prequalification process. We will continue to work with stakeholders to make prequalification as straightforward as possible.
Appeals process seemed a bit formal for typos or missing data
The Appeal process is defined in the regulations and, whilst formal, is necessary to process any changes to applications.

14. How it is being addressed
Feedback and Q&A from 2014 Auction
Prequalification
Feedback
How it is being addressed
Prequalification for Proven DSR is difficult so had to prequalify as unproven and post a bid bond
There are a number of Rule changes proposed in this area (P044, P063 and P082).
Complicated interaction between balancing services and the CM – we have proposed some rule changes but it is an area that needs further development with the industry.
Settlement periods used as delivery evidence not the same as balancing services evidence
DSR have to 'pre qual' for balancing services and it is completely different-can they be aligned

15. Stakeholder engagement/General Feedback How it is being addressed
Feedback and Q&A from 2014 Auction
Stakeholder engagement/General Feedback
Feedback
How it is being addressed
Lack of enduring IT System for Prequalification
New system being developed, will be covered later on the agenda.
The system should pre-populate the next pre-qualification application
We are planning to prepopulate the system with information submitted during 2014
Need to keep the open comms experienced between industry and NG for new entrants and the next implementation w/shops should cater for the two types of audience; existing and new participants.
We have a schedule for future IC events and we will be aiming to cover a range of subjects both for those who have already participated in 2014 and new entrants for 2015.
FAQ's not always helpful with mandatory/optional data seemed not to be consistent
We recognise there were issues with some of the guidance.
Feedback on how to improve them is always welcome and systems and guidance for 2015 will be improved.
Free text field in CM register contains sensitive info (i.e. MPAN details)
The contents of the CM register is defined in the rules. A number of Rule Changes have been proposed in this area to streamline the Register.

16. Questions?

17. IT Systems Update
Ian Woolley

18. Where are we….

19. High Level Architecture
External Parties
Energy Industry
& Trade Associations
Existing Generators
Prospective Generators
DSR Aggregators
Northern Ireland Parties (SONI)
Ofgem
DECC
Counterparty &
Settlement Agent
Comms Channels
Web
Secure
Public
User Authentication
Portal
Participants (market)
Authentication Service
Private
Alerts & Notifications
FAQ & Guidance
Interim Portal Live in June Upgrades planned for April and June 2015
CM Auction Solution
Administration System
Auction System
CRM
CfD Admin
CM Admin
Eligibility
Pre-Qualification
Companies & Users
Allocation
CfD Allocation Solution
CM Auction solution
live November 2015
Comms & Queries
Appeal
Mgmt
Obligation
Tracking
Auction System
Reporting
Registry
LCF Budget Monitor
CfD Contracts
Eligibility Documentation
CMU Obligations
New CM Administration solution to be live June 2015
2014 CfD Allocation solution to be evolved

20. CM Admin system - Plan on a Page

21. Engagement & Change Engagement Change
There will be an IS representative at all Implementation Coordination events
We will keep you updated on progress
We will communicate issues to you at earliest opportunity
We will provide “Proof-of-Concept” demonstrations at appropriate points
Change
We are working very closely with DECC, Ofgem and other Stakeholders to understand and provide for necessary Regulation and Rule changes
Where we have confident forward visibility we are building this in
IBM/Power Auctions are supporting us in change impact assessments
We will mobilise an Auction Solution change project once we have clarity

22. Questions?

23. Next Steps for 2018 Agreement Holders
Robyn Jenkins

24.  TBC Overview New Build Refurbishing Existing Proven DSR Unproven DSR
Monitoring Construction Milestones
Financial Commitment Milestone
Substantial Completion Milestone
Connection Agreement
DSR Test
Metering Assessment
New Build 
TBC
Refurbishing
Existing
Proven DSR
Unproven DSR
Note – not all of these will apply to every CMU, you should check the CM Register, your Capacity Agreement Notice and seek advice if you are not sure which apply to you.

25. Monitoring of Construction Progress (Rule 12.2)
The Capacity Provider of any New Build or Refurbishing CMU must (every 6 months from the date of the auction) provide a progress report for each Generating Unit in the CMU comprising
A schedule of earliest and latest dates for construction milestones (with an explanation of any material change to the last report)
Any material changes to the works described in the construction plan
The report must be accompanied by
An assessment from an Independent Technical Expert
A certificate from 2 directors that they believe the report is an accurate and fair view of the matters described
Such report is required every 6 months until the CMU meets Substantial Completion Milestone or the Capacity Agreement Terminates
First report due 16 June 2015 – 6 months from the date of the Capacity Auction.

26. Satisfying Financial Commitment Milestone (Rule 6.6)
The fulfilment of the Financial Commitment Milestone requires the submission to the Delivery Body of an Independent Technical Report (ITE) where the author of the technical report must declare
that they are an Independent Technical Expert and
that the report satisfies the Required Technical Standard
The ITE report must then declare that
Capital Expenditure to at least 10% of the Total Project Spend has been incurred
OR:
The Capacity Provider has, or will have, sufficient financial resources available to it to meet the Total Project Spend, and the following commitments have been made:
the Capacity Provider has entered into a Major Contract;
The board of directors have made all of the declarations listed in Rule (b)
Deadline – 2 July 2016

27. Substantial Completion Milestone (Rule 6.7)
New Build CMU will have met SCM if the generating unit(s) is/are operating in excess of 90% of its Capacity Obligation
Refurbishing CMU will have met SCM when the generating unit(s) is/are operating at or in excess of 100% of the Capacity Obligation*
The Capacity Provider must notify the Delivery Body when an ION is issued (or equivalent tests are passed)
*DECC have consulted on aligning the requirements for refurbishing CMUs with those for New Build CMUs
A rule change has been proposed (P028) highlighting that some refurbishment CMUs will not receive an ION.

28. Evidencing Connection Agreement and/or TEC
If you declared that a Distribution Connection Agreement will be in place 18 months prior to the Delivery Year (Rule (c)) you must submit the Connection Agreement to the Delivery Body.
The connection agreement must;
Permit the export of at the de-rated capacity of the CMUs it applies to
Contain a Registered Capacity or Maximum Export Capacity figure.
If you declared the Transmission Entry Capacity will be in place 18 months prior to the Delivery Year (Rule 3.6.3(a) (i)) you must submit the Grid Connection Agreement to the Delivery Body.
Secure sufficient TEC to meet the de-rated capacity of all CMUs it applies to
Include the signature pages
Deadline – 31 March 2017

29. Metering Assessments
Deadline: 30 September 2015 (T Successful Applicants)
Who: Successful Applicants who deferred their metering assessment. (See column AK from the capacity market register)
Option 1 - We have developed an excel form which applicants can complete and submit. This will be made available from Friday 13th February on our portal website:
Option 2 – The new online system will be available over the summer which will allow applicants to log in and complete their metering assessment.

30. DSR Tests (Rule 13.2)
Who: Unproven DSR CMUs who wish to become Proven.
To carry out a DSR Test the capacity provider must;
Provide the Delivery Body with the MPAN numbers and any other meter details necessary to monitor the component and the Metering Test Certificate or confirmation of the metering configuration for each component (being a configuration approved by the CM Settlement Body).
Give the DB notice of its intention to test the DSR CMU through submission of a form
The DB may up to 4 hours prior to the settlement period instruct the capacity provider not to activate the DSR CMU
Within 5 working days or receipt of the metered volume data the DB must for each settlement period notify the capacity provider of the Baseline Demand, the DSR evidenced and the Proven DSR Capacity.
Notification form available from 1 March
We expect the Portal to be available before most people are ready to do this
Deadline – 31 August 2018

31. Questions?

32. Expected Changes for 2015
Mark Duffield

33. Regulations and Rules changes for 2015
All changes published in draft form in Parliament as The Electricity Capacity (Amendment) Regulations 2015
Key Changes affecting Prequalification 2015
Inclusion of capacity from Interconnectors from the 2019/20 Delivery Year
Aggregation of Generating Units
De Minimis threshold for DSR CMUs
Ineligibility of EDR Pilot Participants for the Transitional Auctions
Ability to submit additional information at Tier 1 Dispute
Other Changes not affecting Prequalification
Provisions relating to the repayment of capacity payments
Demonstrating Satisfactory Performance

34. Regulations and Rules changes for 2015
Regs Changes affecting 2015 Prequalification
Inclusion of capacity from Interconnectors from the 2019/20 Delivery Year
Interconnector Owners will be able to participate in capacity market auctions but will be eligible for 1-year agreements only
De-rating factors for interconnectors to be determined by the Secretary of State
Prospective interconnectors that fail to complete construction face a “non-completion fee”
Aggregation of Generating Units
Restriction on common ownership of CMU components relaxed for CMUs with Capacity less than 50MW

35. Regulations and Rules changes for 2015
Regs Changes affecting 2015 Prequalification
De Minimis threshold for DSR CMUs
Clarity added to Regulations to confirm DSR CMUs only eligible if meet a 2MW de-minimis capacity
Ineligibility of EDR Pilot Participants for the Transitional Auctions
Plant with Electricity Demand Reduction pilot not eligible for the Transitional Capacity Auctions
Ability to submit additional information at Tier 1 Dispute
Special circumstances that were applied to National Grid disputes for the first auction extended to the second auction

36. Regulations and Rules changes for 2015
Regs Changes not affecting 2015 Prequalification
Provisions relating to the repayment of capacity payments
Certain Capacity Payments must be repaid if the agreement is terminated or if there is a metering fault
Demonstrating Satisfactory Performance
If satisfactory performance is not demonstrated by 30 April in a Delivery Year then payments for whole of May withheld regardless of when, subsequently, satisfactory performance is demonstrated

37. Regulations and Rules changes for 2015
Ofgem has published 81 separate proposals for amending the Capacity Market Rules
Ofgem Consultation planned for Spring 2015 on the changes they are proposing to take forward and implement in time for Prequalification in 2015
All changes to the CM Rules planned to be implemented by June 2015
National Grid has submitted 29 change proposals in all
Majority focussed on streamlining prequalification
Some minor changes to clarify the auction process
Some proposals requiring further industry development put forward in expectation they could be implemented in time for 2016 prequalification

38. Questions?

39. 2015 Timetable
James Greenhalgh

40. Overview of 2015 Capacity Market process
Jan
Mar
May
June
July
Sept
Nov
Dec
2015
Auction parameters- target volume, Price cap (15th June)
Auction Guidelines
2016
Prequalification results for CM
DECC/Industry Review Process
Prequalification open for CM (T-4 & TA)
8th Dec NG runs T-4 CM auction
NG runs Transitional CM auction
Revised Rules

41. 2015 CM Timeline – Key dates When What Who By 1st June
Submit Electricity Capacity Report to SoS
Delivery Body
By 15th June
Decision on whether a T-4 auction is to be held
SoS
Late June
Publication of final CM Rules
Ofgem
CM Pre-qualification System available to applicants
29th June
Publish “Formal” Auction Guidelines (T-4 & TA)
20th July – 14th Aug
Pre-qualification window open for Applicant submissions (T-4 & TA)
Applicants
14th Aug – 25th Sept
Assessment of Pre-qualification submissions (T-4 & TA)
25th Sept
Pre-qualification Results Day (T-4 & TA)
17th Nov
Publish “Final” Auction Guidelines & Bidder details (T-4 only)
25th Nov
Run “Mock” Auction (T-4 only)
App / DB
8th – 11th Dec
Run “Full” Auction and notify bidders of provisional results (T-4 only)
15th Dec
Auction Monitor report submitted to SoS (T-4 only)
Auction Monitor
23rd Dec
Auction Results Day (T-4 only)
DB / DECC
5th Jan 2016
Publish “Final” Auction Guidelines & Bidder details (TA only)
13th Jan 2016
Run “Mock” Auction (TA only)
22nd Jan 2016
Issue Capacity Agreements (T-4 only)
26th – 29th Jan 2016
Run “Full” Auction and notify bidders of provisional results (TA only)
2nd Feb 2016
Auction Monitor report submitted to SoS (TA only)
10th Feb 2016
Auction Results Day (TA only)
26th Feb 2016
Issue Capacity Agreements (TA only)

42. Stakeholder events Calendar 2015
Jan
Feb
March
April
May
June
July
Sept
2015
Feb 12th AM
March 18th AM
April 15th AM+PM
May 19th AM+PM
June 2nd AM
June 17th AM+PM
July 6th AM
Prequalification open for CM (T-4 & TA)

43. Information DECC Stakeholder Bulletins
contact Harry Bannister
National Grid
Portal
Mail list
Helpline
Alternatively contact

44. Questions?