Transcript First (title) slide - Energy Networks Association

Energy Suppliers Forum
CDCM/EDCM - CMG Update
Mo Sukumaran – CMG
1 | Energy Networks Association
10 November 2010
Introduction
CDCM:
• Covers HV and LV DUoS charges
• Common Methodology implemented on 1 April 2010
• Subject to DCUSA
• DCMF – Annual Review and opportunity to raise
issues
• CMG WSC undertaking volatility analysis
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10 November 2010
Introduction
EDCM:
Covers EHV and HV Substation DUoS charges
Following Ofgem consultation:
• Submission of proposals - 1 April 2011
• Implementation (including pre-April 2005 DG and
CDCM/EDCM boundary change) - 1 April 2012
• CMG timeline has changed in response
• CMG has written to stakeholders about changes
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10 November 2010
EDCM Update
WSA – Development of LRIC and FCP Powerflow based
‘forward looking’ costs:
• Common FCP and LRIC methodology identifies future
demand led and generation led network
reinforcements
• Both methods produce £/kVA ‘marginal charges’ on
nodal (LRIC) or network group (FCP) basis
• Provides network ‘congestion’ cost signals to
customers
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10 November 2010
EDCM Update
WSB – Development of common charging model:
• Allocate costs on notional network basis
• Scaling - required to match target revenue
• Final Demand tariffs:
• Fixed charges p/day (sole user assets)
• p/kVA/day capacity charges
• Unit rate being considered
Final Generation tariffs:
• Fixed charges p/day (sole user assets)
• p/kVA/day capacity charges
• p/kWh generation credits
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10 November 2010
EDCM Update
WSB – Development of common charging model:
• Numerous Allocation and scaling methods considered
• Significant price impacts for customers in all DNO
areas
• Option 30 uses a notional path method for allocation
of costs
• ‘Justification’ of level of charges
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EDCM Update
WSC – CDCM / EDCM Volatility Analysis:
• CDCM
•
•
•
•
•
•
Improving transparency & predictability of CDCM
Production of 5 year tariffs
More detail and standardisation of CDCM inputs
Review of methodology statement/user guide
Volatility of inputs and solutions for mitigation
Potential DCUSA changes
• EDCM
• Undertake volatility analysis and provide scenarios over a 5
year period
• Standardise EDCM inputs once methodology agreed
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10 November 2010
Boundary change
Current Boundary for applying site specific charges:
• All customers connected at 22kV or above
• Any customers connected at less than 22kV but on site
specific charges prior to 1st April 2010, will continue to be
charged site specific charges.
• Any new connectee lower than 22kV will receive CDCM
tariffs;
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10 November 2010
Boundary change
New Boundary for applying site specific charges:
(effective from 1st April 2012)
• All customers at 22kV or above
• All customers metered at a HV substation
• Note: Customers who are currently on site specific
charges who do not meet the above criteria will migrate
to CDCM on 1st April 2012.
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10 November 2010
Ofgem decision
•
•
Ofgem have decided to move the boundary for “site-specific” customers down to
C1 and C2 – i.e. customers connected between 1kV and 22kV directly to the
substation
This decision will be implemented in April 2012 alongside the pre-2005
connected generation arrangements and the EDCM.
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10 November 2010
Treatment of pre 2005 generation
• DPCR5 removed the exemption on pre April 2005 DG
from paying use of system charges
• Some DNOs made modification applications earlier this
year to integrate pre and post 2005 DG
• Ofgem requested that these were withdrawn to facilitate
an Ofgem consultation on these issues
• Ofgem consulted on these issues between 21/07/2010
and 01/09/2010
• Ofgem and DNOs are continuing discussions on
treatment of pre and post 2005 DG for EDCM
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10 November 2010
Treatment of pre 2005 generation
• There are three key issues that need decisions/guidance:
– Principles that should be followed in deciding whether compensation is
due and if so how it should be calculated
– If compensation is due, whether this should be an unbundled ‘one-off’
payment to the generator or whether it should be a bundled discount to
a use of system charge
– From what date should charges apply to pre April 2005 EHV generators
• Ofgem issued a decision on the second of these on 23rd August
requiring an unbundled solution
• The third issue was referred to in the decision letter on EDCM
timelines issued on 22nd September which stated
•
‘Distributed generators (DG) connected at EHV who connected on pre-April
2005 terms will be subject to the arrangements for DG customers that will
come into effect on the revised implementation date of 1 April 2012.‘
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10 November 2010
Treatment of pre 2005 generation
Proposed DNO position on compensation is as follows:
• Operations and maintenance uplift
– We believe that arrangements are needed to refund
the unexpired proportion of capitalised O&M charges
• Connection and reinforcement cost
– There is no discrimination that needs to be addressed
for these one-off costs of connection
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Treatment of pre 2005 generation
• We await Ofgems decisions on what, if anything should be
compensated for
• We also require Ofgem to consider and decide on:
– a practicable compensation scheme (e.g. if reinforcement is to
be compensated for, how to retro-apply apportionment rules;
missing records, etc)
– a uniform national basis for compensation (many DG parties are
national operators, so should not face widely varying local
interpretations)
– Clear, definite and secure arrangements for DNOs to recover all
compensation paid (in DPCR6 or otherwise)
• Ofgem are currently seeking further information from DNOs on the
detailed arrangements concerning each pre 2005 generator
• Some DNOs have, where necessary, started to seek changes to
contractual arrangements between DNOs and generators to
facilitate charging once decisions has been made
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10 November 2010
Outline timeline
DCMF meeting
Consultation published
Consultation workshop
Consultation closes
DCMF meeting
EDCM submission deadline
2 December 2010
10 December
13 January 2011
31 January
3 February
1 April
See ENA web site for details of timeline:
http://energynetworks.squarespace.com/edcm-file-storage/05-edcm-meeting-datesproject-plan-and-project-risks/
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10 November 2010
Documentation
11/12 Prices
Modelling for
Submission
Volatility Analysis
Document
Apr
Publish
Responses
Mar
Testing / Quality Review
Consult 10/12
Review
Feb
DCMF
7/10
Trial
Justification
Model Lockdown
DCMF
2/12
Consultation
Testing
End of December
DCUSA
Review
Dec
Prepare Consultation
Industry
Briefing
Workshop
18/11
Workshop
13/1
DCMF 3/2
DCUSA
Review
Further Development
IDNO Networks
Nov
Benchmarking / Justification
Opinion 7/10
Oct
Jan
Justification
Criteria
WSC Review Volatility Analysis
Option 30
28/9
Opinion 30/9
Generation in Generation
Dominated Areas
Option 27
24/9
Sept
Methodology
Review
Revised plan
DCMF
TBC
Industry
Briefing
April 2011 Submission
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10 November 2010
DCMF Open governance
Summary
• Modifications process managed under DCUSA,
like any other DCUSA change
• Ofgem has asked for issues and modification
ideas to be raised first at DCMF
• DNOs are planning their own resources under
the auspices of ENA (Commercial Operations
Group)
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10 November 2010
DCMF Open governance
•Establish a secretariat
for the DCMF change
management process –
how is this funded?
(ENA)
•How is the DMCF SIG
constituted ? (Chair
elected from the DCMF)
•Covers EDCM and
CDCM
•No proposed
limitations on the
working group numbers
DCMF
•Forum for
establishing issues
with charging
methodologies
•Communicating
and debating
solutions
DCUSA
Change
proposal 1
Change
Proposal 2
Standing issues Group
Prioritisation of issues
Manage issue proposals to DCMF
Assist end-users in forming change
proposals
Issue 1
COG Charging group
• DNO resource
management
• Scenario modelling
• Model development
Issue 2
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CDCM issue
raised
Recommendation
received
Progress
CP?
Added to next
SIG
Issue assessed
and developed
Review and
challenge
Initial
assessment
Report
presented to the
DCUSA Panel
Yes
Working Group
Invitations sent
and assessment
carried out
Progression
route and
timetable
confirmed
Consultation
presented to SIG
Min 15 WD
Consultation for
standard
changes
DNO modeling
carried out
(note: possibly
coordinated by the
COG Charging
Group)
Change
declaration
issued to
Ofgem
Response to
consultation
reviewed &
published
Parties vote and
issue DCUSA
recommendation
Potential resource
provision from COG
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Authority
decision
letter issued
10 November 2010