Stakeholder Support for Supplier – CM
This interactive process map will provide details on the activities and interactions you will have with EMRS as a licenced electricity Supplier to support you in participating in the CM scheme for EMR. When you click on each stage this will provide you with the requirements applicable for your role, tasks to be completed and relevant supporting information.
Registering with EMRS
All licensed electricity Suppliers are required to register with EMRS.
To support and allow EMRS to provide notices to appropriate individuals in a timely manner a new Supplier should follow WP21- Supplier Registration to register with EMRS.
Registration form requests:
- Company Registered Details (Name, Address, Company Number)
- EMR Party ID
- Primary Company Email Address (day to day correspondence gets sent here)
- Bank Account Details
- Authorised Contacts and Users (G4 – EMR Settlement Authorisations)
- Interface method to be used in sending backing data (email or DTN)
Where an EMR Party is a BSC Party, the EMR Party ID must match the Party’s BSC Party ID. For further information on BSC Party IDs please refer to the ELEXON website.
A completed excel form and a signed PDF form (must be a director listed on companies house) are required to be sent to Service Desk. Please also cc in the individual who’s signed the form.
Amending registration details
If you need to amend any of the details EMRS holds, you will need to return a completed WP31/1-EMR Party Details Amendment Form to the Service Desk. Please note that EMRS require both a signed (by authorised contact) PDF versionand the excel version to be sent back. We also require an authorised contact to be copied into the email before any changes can be updated.
For further information, please refer to WP31 – Amending EMR Party Details.
EMR Aggregation Rules
We create EMR Aggregation Rules for each Supplier to ensure that each Supplier is charged for their correct volume. Before metered data can be used to calculate Supplier payments, it must be aggregated by the EMR Settlement System using the EMR Aggregation Rules. It’s important the Aggregation Rules are correct as the basis for EMR charges.
For the Capacity Market, the type of demand used within the EMR Aggregation Rules is Net Demand. EMRS first creates a Supplier’s EMR Aggregation Rules when we are notified by ELEXON that BM Units have been created for them.
EMRS will send Suppliers a copy of their EMR Aggregation Rules when they’re created and when any subsequent updates are made. WP 25 – EMR Aggregation Rules provides further details.
Supplier Capacity Market Demand Forecast
In late April each year EMRS will request Suppliers to submit a net demand forecast for the upcoming Delivery Year. This forecast is based on the period of high demand (Peak Period) between 4-7pm on Working Days from November to February. Suppliers must submit their demand forecast by 1 June before the start of the Delivery Year.
EMRS need these forecasts in order to validate and provide Suppliers with their Capacity Market Supplier Charge and Credit Cover schedule which outlines the monthly requirements for these.
G12-Supplier CM Demand Forecast provides Suppliers with information on how to complete the forecast template and the process checks EMRS carry out on submitted forecasts.
WP5 – Supplier CM Demand Forecast provides Suppliers with how to provide their forecasted demand to EMRS, the associated timescales and calculate the Capacity Market Supplier Charge.
Supplier Capacity Market Credit Cover
Under the Capacity Market, Suppliers are obligated to provide Credit Cover to mitigate the risk of non-payment of charges to the Capacity Providers during a Delivery Year. The amount of Credit Cover is set at 110% of the monthly Capacity Market Supplier Charge (to allow for non-payment of the monthly charge, mutualisation and reconciliation payments and late payment interest accrued).
Credit Cover needs to be lodged no later than 12 Working Days before the start of each month within a Delivery Year (runs from October to September). Suppliers are issued with a schedule of their minimum Credit Cover requirements for an upcoming Delivery Year by the end of July. This outlines the amount and the date the Credit Cover needs to be lodged for each month.
WP45 – Supplier CM Credit Cover details the process for lodging Credit Cover including the approved bank account details for cash Credit Cover (p6) and the Letter of Credit templates (p9-23).
For Credit Cover to be considered valid:
- Cash amount must have been received in the relevant bank account;
- Valid Letter of Credit received electronically; and
- Received by 5pm.
PLEASE NOTE: The bank account details and Letter of Credit templates are different to those used for CFD Credit Cover.
Revised Credit Cover schedule
Suppliers are issued with a revised Credit Cover Schedule in March of a Delivery Year which will be based on their actual net demand during the Period of High Demand.
The revised schedule will apply from May of the Delivery Year and this may impact your Credit Cover requirement for the remaining months.
First CM Monthly Invoice – CM Supplier Charge and Settlement Costs Levy
All Suppliers are required to fund the Capacity Market (CM) arrangements through the Settlement Costs Levy (SCL) and the Capacity Market Supplier Charge. Suppliers may also receive monies in certain circumstances, such as, reconciliation payments or after Capacity Providers have paid Penalty Charges.
A Supplier’s Capacity Market payments are based on their market share during Periods of High Demand, between 4-7pm on Working Days from November to February during a Delivery Year or a Financial Year.
The Supplier CM payments are:
- Settlement Costs Levy is a monthly charge to cover the operating costs of the Settlement Body for the coming Financial Year. It uses the data from the Period of High Demand from the previous Financial Year to initially calculate a Supplier’s monthly Settlement Costs Levy. Suppliers will receive a schedule of Settlement Costs Payments in March for the upcoming Financial Year.
- Capacity Market Supplier Charge is a monthly charge to cover the cost of making Capacity Payments to Capacity Providers for a Delivery Year. It uses a Supplier’s forecast of their demand for Periods of High Demand. Suppliers receive a schedule of their monthly Capacity Market Supplier Charge by the end of July. A revised schedule will be issued in March once metered data is available.
The timing of when a Supplier will first receive a Capacity Market invoice will vary depending on when they first start supplying electricity and if this was in a Period of High Demand or not.
|Time period a Supplier starts to supply in||When do SCL payments start?||When do Supplier Charge payments start?|
|Period of High Demand (4-7pm on Working Days from November to February)||As the Supplier didn’t have metered volume during the Period of High Demand from the previous Financial Year, they are not included in the initial SCL calculations for the next Financial Year.
The Supplier’s volumes will be taken into account when calculating the SCL revision and they will receive an invoice in March of the Financial Year they started to supply electricity in.
The Supplier’s volumes will be taken into account when calculating the SCL payments for the next Financial Year. They will receive a notice of these payments in the March of the Financial Year they start supplying in.
|If the Supplier submitted a Demand Forecast by 1 June, they will receive a payments schedule in July and will make payments from October and lodge Credit Cover in September.
Supplier’s volumes will be taken into account when calculating Supplier revised Supplier Charge and Credit Cover. They will receive a revised notice.
The Supplier’s volumes will be taken into account in the monthly reconciliations of the Supplier Charge.
|Outside the Period of High Demand||As the Supplier didn’t have metered volume during the Period of High Demand from the previous Financial Year, they are not included in the initial SCL calculations for a Financial Year.
As the Supplier didn’t have metered volume during the Period of High Demand for the Financial Year they started supplying in, their volumes will not be taken into account when calculating SCL revision or SCL payments for the next Financial Year.
|Supplier’s volumes are not used in the Supplier Charge revision or Reconciliation calculations. They therefore don’t pick up charges for the Delivery Year they started supplying in.
Supplier is required to submit a Demand Forecast for next Delivery Year by 1 June. They will receive a payments schedule in July before a Delivery Year starts and will make payments from October onwards and first required to lodge Credit Cover in September.
G15-Capacity Market Supplier Payments give Suppliers information on what the Capacity Market payments are for, how they are calculated and when to expect the associated invoices or credit notes.
Key Figures for Payments sets out the main rates and amounts used in the calculation of payments under both the Contracts for Difference (CFD) and Capacity Market (CM) schemes.
EMRS Settlement Calendar provides a schedule of when payments for Suppliers will be invoiced, when payment is due, and if applicable, the Settlement Date and the Settlement Run.
Monthly & Annual Reconciliations
Regular reconciliations are conducted to take into account improved data and changes to total Capacity Provider payments. These reconciliations runs are carried out up to three times for each month of a Delivery Year and consist of monthly and annual reconciliations. They are carried out no later than 90, 160 and 295 Working Days following the last day of the relevant month or Delivery Year.
When we perform these reconciliation runs, separate invoices or credit notes are generated for the difference between what was originally invoiced and the new amount based on more recent data are generated for the reconciliation process. The same payment terms as normal invoices (5WD’s payment term).
EMRS Settlement Calendar provides a schedule of when reconciliation invoice or credit notes will be issued, when payment is due, and if applicable, the Settlement Date and the Settlement Run.
Settlement Costs Levy Reconciliation
There are two instances where we will reconcile:
- Settlement Costs Levy Revision – For a Financial Year we initially use the previous year’s Supplier market share to determine a Supplier’s share of the Settlement Costs Levy. At the end of the Financial Year, the Settlement Costs Levy is recalculated once net demand data for the SF Run is available for all Periods of High Demand within the Financial Year. The revised amount will be either invoiced or returned to the Supplier after the end of the Financial Year.
- Settlement Costs Levy Refund – Settlements Costs are forecasted in advance, once the actual costs for running the Capacity Market scheme are determined for a Financial Year, the difference will be split between Suppliers dependant on market share. EMRS will notify Supplier on behalf of the Electricity Settlements Company if a refund is due to occur.
Penalty Residual Payment
During a System Stress Event, Capacity Providers will either be financially penalised or rewarded depending on whether they fail to meet or exceed their Capacity Obligations.
Over-Delivery payments are funded from the Under-Delivery penalties, in which if the penalties aren’t large enough to fund them fully, they’ll be scaled back proportionally for each Capacity Provider. If the penalties are greater than the Over-Delivery payments (after paying the Capacity Providers there are left over funds), this will be distributed to Suppliers dependent on their share of the Supplier Charge paid within the Delivery Year.