Balancing Services Charges 1 st Task Force 29 January 2019
Welcome and introduction Colm Murphy
Agenda No Subject Lead Time 1 Welcome and introduction Colm Murphy 10:00-10:30 2 Scope, Programme and Ways of Working Colm Murphy 10:30-11:00 3 Engagement and Modelling Overview and Discussion Sophie van Caloen, Paul Wakeley 11:00-12:00 Lunch - 12:00-12:30 4 BSUoS Overview and Wider Context Tom Edwards 12:30-13:00 5 Breakout Session on Deliverable 1 Mike Oxenham 13:00-15:30 6 Summary, Actions and Next Steps Colm Murphy 15:30-16:00 3
Scope, Programme and Ways of Working Colm Murphy
Drivers, Scope and Impact Drivers • Balancing Service Charges recover the efficient costs incurred by National Grid ESO in undertaking our obligations in respect of operating the national electricity transmission system. • As the energy system is changing, there are questions about how these charges work: charge not viewed to be cost-reflective, increased volatility, does not assist in system operation, etc. Scope • The objective of Task Force is to provide analysis to support decisions on the future direction of balancing services charges. • In particular, we will examine the potential for and feasibility of some elements of balancing services charges being made more cost-reflective and hence providing stronger forward-looking signals. Impact • The potential impact is significant and our wider aim is to ensure a more level playing field and to facilitate competitive markets 5
Deliverables of the Task Force The new Balancing Services Charges Task Force will run from January 2019 and will deliver a final report in May 2019 . Deliverables Date Task Force document assessing the extent to which elements of balancing services charges currently provide a Feb 2019 forward-looking signal that influences the behaviour of system users. Task Force document assessing the potential for existing elements of balancing services charges to be charged March 2019 more cost-reflectively and hence provide better forward-looking signals. The analysis should explore each of the existing components of balancing services charges and to what extent they have the potential to influence the behaviour of different parties. Task Force document assessing the feasibility of charging any identified potentially cost-reflective elements of April 2019 balancing services charges on a forward-looking basis. (draft report) Based on the candidate elements of balancing services charges from the previous stage, assess the feasibility of May 2019 charging these elements to influence user behaviour. This could include consideration of whether constraint signals (final report) are more effectively sent through balancing services charges or transmission use of system charges. It should consequently identify the extent to which the different elements of balancing services charges should be considered cost-recovery charges and therefore have potential for the TCR approach for cost-recovery charges to be applied. 6
Ways of Working - Responsibilities TF Chair TF Members ESO Secretariat • • • The TF will be chaired by ESO. Bring expertise and experience Provide secretariat services • Provide leadership to the TF, to the TF. (organise meetings, booking • ensure each meeting is Be committed to making venues, send invitations, conducted in accordance with improvements to delivering agenda, minutes, etc.) • the ToR and in an orderly and benefits to consumers. Maintain a list of TF actions. • • efficient manner. Be available to attend all Produce and update a detailed • Ensure that all TF Members are meetings and engage more project plan. • able to contribute their views. widely with industry. Manage stakeholder • • Coordinate with the Secretariat Be able to work collaboratively engagement, i.e. act as first to ensure effective management with others and seek to find point of contact for stakeholders • Ensure regular updates are consensus. who wish to contact the TF. • • provided to Ofgem, the CDB, Actively contribute towards the Update the Charging Futures etc. work of the TF outside of TF website, providing stakeholders • Ensure sufficient wider industry meetings. with relevant information. • • communication and engagement Be expected to contribute Collate and publish the final TF towards the milestones. report on behalf of the TF. Collaboration is crucial to ensure the TF delivers its objective in a timely manner 7
Ways of Working - critical success factors • The aim of the TF is to produce a report that answers the 3 questions (currently, potential, feasible) to provide a set of conclusions that may lead to changes in the recovery of balancing services charges. • The conclusion of the report should be supported by good analysis , including a reasonable qualitative and, to the extent possible, quantitative assessment. This all must be concluded in tight timescales. • The TF is committed to keep wider industry updated and engaged on its work throughout the process through regular engagement and publication of agreed documents. • The TF will aim to not duplicate work including in relation to other workgroups under the modification process and where there is potential for overlap, the Secretariat will ensure that the TF is updated. • The TF will be mindful of other views and arguments within and outside of the TF and will ensure that these views and arguments are debated to ensure a more robust final report. • Are there any other ways of working which we need to discuss and note to ensure that we collectively and effectively work towards our common goal for the TF? 8
Communication and engagement plan Sophie Van Caloen
Session Objective The objective of this agenda item is to discuss and agree on a communication and engagement plan. The aim is to ensure we provide industry with regular updates on progress and also give them the ability to engage and contribute. Content: • Objectives • Approach • Draft programme plan 10
Communication and Engagement - Objectives Know Feel Do • Understand the TF objective and the tight • Involved • Provide constructive input timescales (draft report in April – final in May). • Able to contribute and feedback to support the • We’re committed to inform ongoing progress • Confident in the TF TF work programme of the TF and enable the possibility for our ability to reach a stakeholders to engage and provide feedback. considered position • We are listening to feedback and will take it into account in the TF process. We want to ensure our communication and engagement plan enables the industry to have their say! 11
Industry communication and engagement approach Recurrence/date Channel Topic Lead Every fortnight, before Web TF agenda and ad-hoc pre-read ESO sec Task Force Every fortnight, after Email & web TF minutes and relevant presentations ESO sec Task Force (through CF newsletter) TF “informal” summary Every month Podcast ESO sec host (alternate/ad hoc) The objective is to distribute information to industry TF Members Every month Webinar with Q/A TF deliverables (current, potential, feasible, report) ESO sec host (alternate) The objective is to share more complex input and get feedback TF Members Ad hoc Email, call, etc. Targeted (bilateral) engagement + potential to invite to future ESO & TF task forces to present views or analysis, if applicable Ad hoc Report to existing Report TF work to Charging Delivery Body (CDB), code mods ESO & TF groups panels/workgroups, etc May Consultation Draft report ESO & TF May/June Event Final report ESO & TF All the communication to industry will be coordinated through the Secretariat and the Charging Futures website. Are we confident this will ensure we work collectively and transparently? 12 If you weren’t in the Task Force, how would you like to be engaged?
Draft programme plan Jan 19 Feb 19 Mar 19 Apr 19 May 19 ... 1 st TF 2 nd TF 3 rd TF 4 th TF 5 th TF 6 th TF 7 th TF 8 th TF 9 th TF Deliverable Current Potential Draft report Final report Feasible Current analysis Potential criteria analysis TF Work Feasible criteria analysis Ad hod NG ESO draft draft draft draft draft draft Task Force Report review review review review Industry review podcast Engage webinar prep prep prep Other Event Ad hoc updates to CDB, mod panel, etc. Consult prep 1- TF 29Jan 2- TF Feb 3- TF Feb 4- TF Mar 5- TF Mar 6- TF Apr 7- TF Apr 8- TF May 9- TF May • TF plan • Currently : • Potential : • Potential : • Feasible : • Feasible : • Report : • Report : • Final report + • Currently : agree further agree further agree finalisation comments event analysis conclusion analysis conclusion analysis conclusion before review and • Potential : • Feasible : actions actions + actions + consultation actions define criteria draft define criteria predictability 13 + analysis conclusions + analysis + other actions actions signals
Modelling plan Paul Wakeley
Paul Wakeley Future Markets Modelling Manager T: 01926 655582 E: paul.wakeley@nationalgrid.com 15
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