Settlement Reform George Huang, Senior Policy Manager, 30 November - - PowerPoint PPT Presentation
Update on Market-Wide Settlement Reform George Huang, Senior Policy Manager, 30 November 2017 What well cover Agenda Introduction to Half-Hourly Settlement Project overview including benefits and a snapshot of where we are
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– including benefits and a snapshot of where we are
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Non Half Hourly Settlement: Customers Settled Using Profiles
Average domestic consumer consumption pattern = assumed profile
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Standard Domestic Profile
Actual Consumption: Flat
00 06 12 18 24 00 06 12 18 24
Actual consumption: High peak
Consumption Consumption Consumption
low peak electricity consumption means cheaper customer to serve High peak consumption means more expensive customer to serve Half Hourly Settlement: Customers settled based on their actual consumption patterns
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Certain to occur Likely to occur Outcome Output
Long term Medium term Short term
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Medium and large business users
Half-hourly settlement (HHS) for Profile Classes 5-8 by 01 April 2017 through P272.
Elective
We have removed barriers to make half-hourly settlement for smaller domestic and non- domestic customers cost-effective on an elective basis.
Market-wide Significant Code Review
We expect that we will need to mandate MHHS to realise the full benefits. We’re working in three areas:
HHS, including an economic assessment of the costs and benefits.
collection/aggregation, consumer issues A decision will be made by Ofgem on if, how and when to implement MHHS in the second half of 2019.
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SCR launch (24 July) RFI - Business case and data collection/ aggregation (21 Aug) Project
assessment
published (12 Sept) 1st TOM Design Working Group (11 Oct) Voluntary RFI – access to data (October) Strategic Business Case (Winter 17/18) 1st TOM Design Advisory Board (14 Nov)
July 2017 Winter 2019
Decision
(Winter 2019) Outline Business Case (Summer 18) Skeleton TOMs finalised (Spring 18)
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See:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/469317/green_book_guidance_public_sector _business_cases_2015_update.pdf
case for change
scope of economic costs and benefits
assessment to set out preferred way forward
commercial, financial and management cases
specific options
Operating Model work and policy decisions
and deliver reform and the transition to market-wide HHS
We are following HM Treasury best practice guidance to develop a Business Case based on the 5 Case Model methodology. This will include an economic impact assessment (the Economic Case).
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settlement arrangements which will deliver MHHS.
new technologies and business models. For example
group that will provide design options to Ofgem
external Design Advisory Board, consisting of members from industry, innovation, academic and consumer backgrounds
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Ofgem is leading on consideration and decision making on the following policy and consumer questions separately from the Target Operating Model development: Approach on whether or not to centralise functions currently performed by supplier agents Approach to access to data for settlement
The potential impacts on consumers of mandatory HHS and whether any additional protections will be needed as result (including microbusiness consumers)
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