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105 provisions
35 Null and void capacity agreements
(1) Any capacity agreement issued in respect of a CMU which, at the date on which the capacity agreement was issued, did not meet the general eligibility criteria is null and void.
(2) Where the Delivery Body becomes aware that a capacity agreement is null and void by reason of paragraph (1), the Delivery Body must as soon as reasonably practicable give a notice to the capacity provider and the Settlement Body which—
(a) identifies the capacity agreement; and
(b) states that the capacity agreement is null and void.
(1) The Settlement Body must make the calculations set out in this Part and Schedule 1 (the “settlement calculations”)—
(a) by such date as may be specified or, where no date is specified, by such time as is necessary to enable the Settlement Body to comply with the regulations in this Part; and
(b) so far as possible, using the required data.
(2) Where, by the time a settlement calculation is to be made, the Settlement Body has not been provided with any required data which is necessary for that calculation, the calculation must be made using the best data available to the Settlement Body.
(3) In this regulation, “required data” means data which is required to be provided to the Settlement Body under capacity market rules.
(1) Where a capacity provider (“C”) fails to comply with a requirement in capacity market rules to provide data to the Settlement Body, the Settlement Body must give a notice to C that C is in default (a “data default notice”).
(2) A data default notice may be varied by the Settlement Body and must be revoked when C has provided all the data required by capacity market rules.
(1) An invoice or credit note issued by the Settlement Body must set out the determination of the amount which the recipient is liable to pay, or is entitled to receive, in such detail as will readily show the recipient how the determination has been made.
(2) An invoice must specify the day by which it is to be paid, which must be not less than 3 working days after the date on which the invoice is issued.
(3) Each electricity supplier and capacity provider must provide the Settlement Body with an address for electronic service of invoices and credit notes.
(4) Where an electricity supplier or a capacity provider has complied with paragraph (3), the Settlement Body must send an invoice or credit note electronically to the address provided.
39 Determination of adjusted load-following capacity obligation, net output and adjusted net output
(1) For each relevant settlement period in a month (“month M”), the Settlement Body must determine for each capacity committed CMU—
(a) the adjusted load-following capacity obligation of the CMU in the settlement period ("ALFCOij”);
(b) the net output of the CMU in the settlement period (“Eij”); and
(c) adjusted Eij (“AEij”).
(2) The Settlement Body must make the determinations under paragraph (1) in accordance with capacity market rules.
(3) The determinations under paragraph (1)(a) and (b) must be made by no later than 10 working days after the end of month M.
(4) The determination under paragraph (1)(c) must be made after the close of the volume reallocation window for month M, but by no later than 34 working days after the end of month M.
(5) In this regulation—
“adjusted Eij”, in relation to a capacity committed CMU and a relevant settlement period, means Eij with any adjustment made to it as a result of volume reallocation;
“capacity market volume reallocation notifications” has the meaning given in the Rules;
“net output”, in relation to a demand side response CMU, means DSR volume (as defined in capacity market rules);
“volume reallocation” means the procedure in capacity market rules by which part of the net output of a ... CMU in a relevant settlement period may be reallocated to another ... CMU for the purpose of the settlement calculations; and
“volume reallocation window” means the period during which persons qualified to do so (within the meaning given in regulation 42(2)(c)) may submit capacity market volume reallocation notifications under capacity market rules.
(1) A capacity provider (“C”) is entitled, subject to paragraphs (5) and (6) and to regulations 49 to 51, to receive from the Settlement Body a capacity payment determined in accordance with this regulation in respect of each month of a delivery year (“month M”) for the capacity committed CMUs for which C was the capacity provider during month M.
(2) The Settlement Body must, after the end of month M—
(a) determine the amount of the capacity payment which is payable to C in respect of month M (“MCPcm”); and
(b) issue a credit note to C for the amount determined for it.
(3) MCPcmmust be calculated in accordance with paragraph 4 of Schedule 1.
(4) The Settlement Body must issue a credit note to C under paragraph (2)(b)—
(a) by no later than the 28th working day after the end of month M; but
(b) if C is liable to pay a capacity provider penalty charge in respect of month M, not earlier than the day after the day by which C is required to pay that charge.
(5) Paragraphs (1) to (4) do not apply unless by the 26th working day after the end of month M the Settlement Body has received capacity market supplier charges in respect of month M.
(6) If by the day referred to in paragraph (5) the Settlement Body has received capacity market supplier charges in respect of month M the total of which is less than the sum of MCPcm for all capacity providers, the amount of each capacity payment which would otherwise be determined under paragraph (2) must be reduced by the same proportion so that the total amount of capacity payments payable to capacity providers is equal to the total amount of capacity market supplier charges received.
(7) In this regulation, “capacity market supplier charges” means charges which electricity suppliers are required to pay under electricity capacity regulations to meet the cost of funding capacity payments.
(1) A capacity provider (“C”) must pay to the Settlement Body a capacity provider penalty charge in respect of any month of a delivery year (“month M”) if, in respect of month M, a settlement period penalty applies to one or more capacity committed CMUs for which C was the capacity provider during month M.
(2) If one or more capacity providers are liable to pay a capacity provider penalty charge in respect of month M the Settlement Body must, by no later than the 35th working day after the end of month M—
(a) determine the amount, if any, payable by each capacity provider in respect of capacity provider penalty charges incurred in month M; and
(b) issue to each capacity provider which is liable to pay capacity provider penalty charges an invoice for the amount determined for it.
(3) The amount payable by C under paragraph (2)(a) is the sum of—
(a) MPSAim, as calculated under paragraph 6 of Schedule 1, for each capacity committed CMU for which C was registered on the capacity market register as the capacity provider for the whole of month M; and
(b) C’s proportion of MPSAim, as calculated under paragraphs 6 and 8 of Schedule 1, for each capacity committed CMU for which C was registered on the capacity market register as the capacity provider for part of month M.
(3A) The percentages to be included in the capacity market register under regulation 31(2)(f) are—
(a) for the annual penalty cap, 100%; and
(b) for the monthly penalty cap, 200%.
(4) In paragraph (1), “settlement period penalty” means a penalty calculated under paragraph 5 of Schedule 1.
(1) A person (“P”) is entitled to receive from the Settlement Body an over-delivery payment in respect of a delivery year (“year X”) if—
(a) any capacity committed CMU (“CMU i”) for which P was the capacity provider over-delivered in any relevant settlement period in year X; or
(b) P has made a qualifying delivery in any such settlement period.
(2) For the purposes of this regulation—
(a) CMU i over-delivers in a relevant settlement period j if AEij is greater than ALFCOij in that settlement period;
(b) P makes a qualifying delivery in a relevant settlement period j if—
(i) P was a qualified person (but not a capacity provider) in respect of a CMU (“CMU i”) during that period, and
(ii) in that period, AEij is greater than zero;
(c) a “qualified person” is a person who—
(i) has registered with the delivery body under capacity market rules in respect of a CMU for the purpose of participating in volume reallocation, and
(ii) is an “acceptable transferee” within the meaning of capacity market rules; and
(d) “volume reallocation” has the meaning given in regulation 39(5).
(3) The Settlement Body must, by not later than the 28th working day after the end of year X—
(a) determine the amount, if any, of the payments payable to each person under this regulation in respect of year X; and
(b) issue to each person who is entitled to such a payment a credit note for the amount determined for it.
(4) The amount payable to P under paragraph (3)(a) is the sum of—
(a) TODPix, as calculated in accordance with paragraph 7 of Schedule 1, for each CMU—
(i) for which P was registered on the capacity market register as the capacity provider for the whole of year X, or
(ii) in respect of which P was a qualified person for the whole of year X; and
(b) P’s proportion of TODPix, as calculated in accordance with paragraphs 7 and 8 of Schedule 1, for each CMU—
(i) for which P was registered on the capacity market register as the capacity provider for part of year X, or
(ii) in respect of which P was a qualified person for part of year X.
(1) A capacity provider must pay to the Settlement Body a termination fee, by way of a financial penalty, if—
(a) a capacity agreement is terminated on a ground specified in capacity market rules; and
(b) capacity market rules specify that a termination fee is payable in the event of the capacity agreement being terminated on that ground.
(1A) A termination fee is payable in accordance with paragraph (1) if the capacity agreement is terminated in accordance with capacity market rules, notwithstanding that the termination does not take effect until after the expiry of the delivery year, or period of delivery years, to which the capacity agreement relates (“the relevant period”).
(2) The Settlement Body must, as soon as reasonably practicable after receiving notice of the termination of a capacity agreement on a ground for which a termination fee is payable—
(a) determine the amount in pounds of the termination fee that is payable; and
(b) issue to the capacity provider an invoice for that amount.
(3) Where capacity market rules specify that TFx is payable (for any value of x from x = 1 to x = 9), the amount must be determined in accordance with the formula—
T
F
1
=
T
F
1
r
a
t
e
×
C
O
.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) In this regulation—
“CO” means the capacity obligation in MW for which the capacity agreement was issued, as specified in the capacity market register;
“TFxrate” (for any value of x from x = 1 to x = 9) means the rate in pounds per MW determined in accordance with regulation 32 and specified on the capacity market register as the rate at which TFx is payable under the capacity agreement.
(6) In this regulation, references to the termination of a capacity agreement include references to the termination of a transferred part; and for that purpose—
(a) the reference to the relevant period in paragraph (1A) is to be construed as a reference to the transfer period as defined in regulation 30A(1)(b); and
(b) “CO” in paragraph (5) means the capacity obligation in MW comprised in that transferred part as specified on the capacity market register.
43ZA Termination fees: adjustment for DSR providers
(1) This regulation applies where—
(a) a termination fee is payable by a DSR provider;
(b) before that termination fee became payable, the Settlement Body had drawn down applicant credit cover provided by the DSR provider in accordance with regulation 60(3) or regulation 61(1)(a)(ii);
(c) the termination fee and the applicant credit cover relate to the same unproven demand side response CMU; and
(d) either—
(i) the termination fee and the applicant credit cover relate to the same capacity auction; or
(ii) the termination fee relates to a capacity auction for which no further applicant credit cover was required to be provided because of regulation 59(1B).
(2) The amount of the termination fee to be determined and invoiced under regulation 43 is reduced by the amount of the credit cover drawn down.
(1) A capacity provider in respect of a new build interconnector CMU must pay to the Settlement Body a fee (a “non-completion fee”) by way of a financial penalty if, in circumstances specified for the purposes of this regulation by capacity market rules, the capacity provider fails to meet the completion requirements of the capacity agreement.
(2) For the purposes of paragraph (1)—
“completion requirements” are requirements to reach a level of operational capability specified in capacity market rules by the end of a delivery year;
“new build interconnector CMU” means a prospective interconnector CMU which has not been commissioned.
(3) The Settlement Body must, as soon as reasonably practicable after receiving notice in accordance with capacity market rules of the imposition of a non-completion fee—
(a) determine the amount in pounds of the non-completion fee that is payable; and
(b) issue to the capacity provider an invoice for that amount.
(4) Paragraphs (3) to (5) of regulation 43 apply to the determination of the amount of a non-completion fee as they apply to the determination of the amount of a termination fee.
(5) For the purposes of this regulation, references in regulation 32(1)—
(a) to a “termination fee” are to be construed as references to a non-completion fee; and
(b) to termination on a ground specified in capacity market rules are to be construed as references to a failure to meet completion requirements in circumstances so specified.
(6) Regulation 33 applies (except for paragraphs (2)(b), (3) and (5)(b)) to a non-completion notice as it applies to a termination notice, and for that purpose, a reference in regulation 33 to—
(a) a “termination fee” is to be construed as a reference to a non-completion fee; and
(b) a “termination notice” is to be construed as a reference to a non-completion notice.
(1) A capacity provider must repay capacity payments to the Settlement Body if—
(a) a capacity agreement is terminated on a ground specified in capacity market rules; and
(b) capacity market rules specify that capacity payments are repayable in the event of the capacity agreement being terminated on that ground.
(2) The Settlement Body must, as soon as reasonably practicable after receiving final notice of termination of the capacity agreement—
(a) determine the amount in pounds of the capacity payments that are repayable; and
(b) issue to the capacity provider an invoice for that amount.
(3) Where capacity market rules specify that capacity payments are repayable in respect of—
(a) the period TP1, the capacity payments that must be repaid are those made in respect of the period beginning with the date of the termination notice and ending with the date of termination of the relevant capacity agreement;
(b) the period TP2, the capacity payments that must be repaid are those made in respect of the period beginning with the date of the termination event and ending with the date of termination of the relevant capacity agreement;
(c) the period TP3, the capacity payments that must be repaid are those made in respect of the period beginning with the date on which capacity payments began under the relevant capacity agreement and ending with the date of termination of the relevant capacity agreement ;
(d) the period TP4, the capacity payments that must be repaid are those made in respect of the period beginning on 1st October, and ending on 1st May, of the relevant delivery year.
(4) In this regulation—
(a) “final notice of termination” means a notice given by the Delivery Body in accordance with capacity market rules that the capacity agreement has terminated; and
(b) “termination event” and “termination notice” have the meaning given in the Rules.
(5) This regulation applies to the termination of a transferred part as it applies to the termination of a capacity agreement.
43C Repayment of capacity payments: metering fault
(1) A capacity provider must repay capacity payments to the Settlement Body if—
(a) a metering test certificate or DSR test certificate is, in accordance with capacity market rules, determined to be invalid on a ground specified in those rules; and
(b) capacity market rules specify that capacity payments are repayable in the event that a metering test certificate or DSR test certificate is determined to be invalid on that ground.
(2) The Settlement Body must, as soon as reasonably practicable after the relevant date—
(a) determine the amount in pounds of the capacity payments that are repayable; and
(b) issue to the capacity provider an invoice for that amount.
(3) In paragraph (2) the “relevant date” means the date on which, in accordance with capacity market rules—
(a) in the case of a metering test certificate, the certificate was determined by the Settlement Body to be invalid; or
(b) in the case of a DSR test certificate, the Settlement Body received notice of the invalidity of the certificate.
(4) Where capacity market rules specify that capacity payments are repayable in respect of—
(a) the period MP1, the capacity payments that must be repaid are those made in respect of the period beginning with the relevant invalidation date and ending with the date on which the relevant metering recovery payment notice is issued;
(b) the period MP2, the capacity payments that must be repaid are those made in respect of the period beginning with the relevant invalidation date and ending with the date on which the relevant completion notice is issued;
(c) the period MP3, the capacity payments that must be repaid are those made in respect of the period beginning with the first day of the relevant delivery year and ending with the date on which the relevant metering recovery payment notice is issued.
(5) In this regulation, “completion notice”, “invalidation date”, “metering recovery payment notice” and “metering test certificate” have the meaning given in the Rules.
(1) In this Chapter—
“draw down” has the same meaning as it has in Part 7;
“in default” means a failure to pay in full an invoiced amount by the end of the payment due date;
“invoiced amount” means the total amount payable by a payer as stated in the invoice issued to that payer under regulation 41, 43 ... or 49A;
“payer” , subject to regulation 47(7), means a person to whom an invoice is issued under regulation 41, 43 ... or 49A;
“payment due date” means the day specified in an invoice in accordance with regulation 38(2) as the date by which it is to be paid.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) A payer must pay the invoiced amount to the Settlement Body by no later than the end of the payment due date.
(2) Where a payer has not paid in full the invoiced amount to the Settlement Body as required by paragraph (1), the payer must pay the Settlement Body simple interest at the rate specified in paragraph (4) (“late payment interest”) on the outstanding balance of the invoiced amount from and including the payment due date until the date of payment.
(3) Where a payer disputes an invoiced amount under Chapter 2 of Part 10—
(a) if the decision of the Settlement Body under that Part is that the invoiced amount is reduced but not extinguished, late payment interest accrues on the reduced amount from and including the payment due date until the date of payment;
(b) if the decision of the Settlement Body under that Part is that the invoiced amount is extinguished, no late payment interest accrues in respect of the invoiced amount.
(4) The rate at which late payment interest is payable is 5 per cent per annum over the Bank of England base rate in force on the 30th June (in respect of interest which starts to run between 1st July and 31st December) or the 31st December (in respect of interest which starts to run between 1st January and 30th June) immediately before the date on which the interest starts to run.
(5) In paragraph (4), “Bank of England base rate” means—
(a) the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets; or
(b) where an order under section 19 of the Bank of England Act 1998 is in force, any equivalent rate determined by the Treasury under that section.
(1) The Settlement Body must maintain a register (“the non-payment register”) which is to include in respect of a payer (“P”) who has not paid an invoice by the end of the payment due date—
(a) the name of P;
(b) whether P is an electricity supplier or a capacity provider;
(c) the type of invoice in respect of which P is in default;
(d) the payment due date;
(e) the date or dates when any payment has been made by P in respect of the invoice, and whether it is a full or partial payment; and
(f) whether P has given a disputes notice to the Settlement Body in respect of the invoice;
(g) if P has given a disputes notice in respect of the invoice, whether the dispute has been determined under Chapter 2 of Part 10 and, if so, that determination.
(2) The matters included on the non-payment register under paragraph (1) are a “relevant register entry” in relation to P.
(3) The Settlement Body must—
(a) make a relevant register entry as soon as possible after P is in default; and
(b) update the relevant register entry if a payment is subsequently made, or a dispute is raised or determined.
(4) The Settlement Body must remove a relevant register entry—
(a) if it is determined under Chapter 2 of Part 10 that the payment is not due, as soon as reasonably practicable after the Settlement Body makes that determination;
(b) in any other case, 12 months after the date on which P became in default.
(5) The Settlement Body must publish the information contained in the non-payment register on a website.
(6) The Settlement Body must retain the data contained in a relevant register entry for 5 years after the relevant register entry is made.
(7) In this regulation, “payer” means a person to whom an invoice is issued under these Regulations or the Supplier Payment Regulations.
Subject to regulations 49 to 52, the Settlement Body must pay the amount due to—
(a) each capacity provider issued with a credit note for a capacity payment, by no later than the end of the 33rd working day after the end of the month to which the payment relates; and
(b) each capacity provider issued with a credit note for an over-delivery payment, by no later than the end of the 33rd working day after the end of the delivery year to which the payment relates.
(1) This regulation applies if, at the time when a credit note is issued to a capacity provider (“C”) for a capacity payment, C is in default in respect of a capacity provider penalty charge (an “unpaid penalty charge”).
(2) If this regulation applies—
(a) the Settlement Body must ensure that the credit otherwise payable to C is reduced—
(i) by the amount of the unpaid penalty charge;
(ii) to nil, if the amount of the unpaid penalty charge is equal to or greater than the amount of the credit; and
(b) the amount by which the credit is reduced is to be treated as a payment or part payment of the unpaid penalty charge.
(3) The Settlement Body must ensure that the credit note issued to C states the amount by which the credit is reduced, and the reason for the reduction.
(1) This paragraph applies if, before the time when a credit note is issued to a capacity provider (“C”) for a capacity payment, the Delivery Body has acknowledged receipt of a declaration under the Rules that—
(a) relevant expenditure has been incurred, or is expected to be incurred; or
(b) relevant benefit has been received, or is expected to be received,
in respect of the capacity committed CMU for which C is responsible (“CMU i”).
(2) If paragraph (1) applies, the Settlement Body must ensure that the credit otherwise payable to C is reduced—
(a) by the aggregate amount of any outstanding relevant expenditure and outstanding relevant benefit; or
(b) to nil, if the aggregate amount of any outstanding relevant expenditure and outstanding relevant benefit is equal to or greater than the amount of the credit.
(3) The Settlement Body must ensure that the credit note issued to C states the amount by which the credit is reduced, and the reason for the reduction.
(3A) This paragraph applies where—
(a) the aggregate amount of any outstanding relevant expenditure and outstanding relevant benefit (“aggregate outstanding amount”) in respect of CMU i is greater than nil; and
(b) there are no further capacity payments in respect of CMU i which the Settlement Body would be required to reduce under paragraph (2) to offset this aggregate outstanding amount.
(3B) Where paragraph (3A) applies—
(a) C is liable to pay to the Settlement Body an amount equal to the lesser of—
(i) the aggregate outstanding amount; or
(ii) the total amount of all the capacity payments paid to C in respect of CMU i, less the amount of any repayment of these capacity payments by C to the Settlement Body under regulation 43B, 43C or 50; and
(b) the Settlement Body must, as soon as reasonably practicable after paragraph (3A) becomes applicable, issue to C an invoice for the amount C is liable to pay under sub-paragraph (a).
(4) This regulation applies to a credit note or invoice issued in respect of a transferred part as it applies to a credit note or invoice issued in respect of a capacity agreement, and where a capacity agreement has been transferred pursuant to regulation 30A(1)(b) or (2)(b)—
(a) the reduction in the amount payable to C pursuant to paragraph (2) is to be calculated so that it is proportionate to the period and part of the capacity obligation held by C during the month to which the credit note relates; and
(b) the aggregate outstanding amount attributable to C under paragraph (3B)(a) is to be determined by adjusting this amount so that it is proportionate to the period and part of the capacity obligation held by C throughout the duration of the capacity agreement.
(5) In this regulation—
“outstanding relevant benefit” means relevant benefit that has not been deducted from capacity payments pursuant to this regulation;
“outstanding relevant expenditure” means relevant expenditure that has not been deducted from capacity payments pursuant to this regulation; and
“relevant benefit” has the meaning given in the Rules.
“relevant expenditure” has the meaning given in the Rules.
50 Reducing capacity payments: failure to demonstrate satisfactory performance
(1) This regulation applies in relation to a capacity committed CMU (“CMU i”) and a delivery year (“year X”) if—
(a) a satisfactory performance requirement applies in respect of CMU i in year X; and
(b) the requirement has not been met by 30th April in year X.
(2) If, by the end of a relevant month, the capacity provider in respect of CMU i (“C”) has not complied with the satisfactory performance requirement, no monthly capacity payment is to be paid in respect of CMU i for that month.
(2A) If C complies with the satisfactory performance requirement during May in year X, no monthly capacity payment is to be paid in respect of CMU i for that month.
(3) If C complies with the satisfactory performance requirement during a relevant month other than May, the Settlement Body must ensure that the credit which would otherwise be payable to C in respect of the monthly capacity payment for CMU i for that month is reduced by the proportion AB, where—
(a) A is the number of days in the relevant month before the day on which C complies with the satisfactory performance requirement; and
(b) B is the number of days in the relevant month.
(4) If C has not complied with the satisfactory performance requirement by the end of year X—
(a) C must repay to the Settlement Body all capacity payments made in respect of CMU i and year X less the total amount of any capacity provider penalty charges that C has paid in respect of CMU i and year X; and
(b) the Settlement Body must, as soon as reasonably practicable after the end of year X, issue an invoice to C for the amount due under sub-paragraph (a).
(5) The Settlement Body must—
(a) if paragraph (2) or paragraph (2A) applies, give a notice to C which states that no monthly capacity payment is to be paid in respect of CMU i for the relevant month, and states the reason;
(b) if paragraph (3) applies, ensure that the credit note issued to C for the relevant month states the amount by which the credit is reduced, and states the reason;
(c) if paragraph (4) applies, ensure that the invoice issued to C under paragraph (4)(b) states the reason for the issue of the invoice.
(6) In this regulation—
“extended performance” has the meaning given in the Rules;
“relevant month” means May, June, July, August or September in year X;
“satisfactory performance day” has the meaning given in the Rules;
“satisfactory performance requirement” means a requirement in capacity market rules for a capacity provider to demonstrate satisfactory performance days or extend performance during a satisfactory performance day in respect of a capacity committed CMU.
51 Withholding credit payments to capacity providers
(1) This regulation applies where, at the time when a credit note is issued to a capacity provider (“C”) under this Part—
(a) C is subject to a data default notice; ...
(aa) C is issued a termination notice in relation to a CMU (“CMU i”) for an insolvency termination event (a “relevant termination notice”); or
(b) other than when sub-paragraph (aa) applies, the Settlement Body is aware that C is insolvent.
(2) The Settlement Body must ensure that—
(a) the credit is withheld; ...
(aa) where a relevant termination notice has been issued, no monthly capacity payment is paid in respect of the relevant CMU from the date the relevant termination notice is issued, and credit is withheld in accordance with paragraph (2A); and
(b) the credit note states that the payment is to be withheld and states the reason why.
(2A) Where C is issued a relevant termination notice, the Settlement Body must withhold credit in accordance with the formula—
A=X×YZ
where—
A is the adjusted capacity payment;
X is the full monthly capacity payment;
Y is the number of days in that month before the date the relevant termination notice was issued; and
Z is the total number of days in the month during which the termination notice was issued.
(2B) The Settlement Body is not required to withhold credit from C under paragraph (1)(aa) if the relevant termination notice is withdrawn.
(2C) Paragraph (1)(aa) applies to the termination of a transferred part as it applies to the termination of a capacity agreement.
(3) In this regulation—
“data default notice” has the meaning given in regulation 37(1);
“insolvency termination event” and“termination notice” have the meanings given in the Rules.
(1) Paragraphs (2) and (3) apply where a credit is withheld from a capacity provider (“C”) under regulation 51.
(2) If, where the credit is withheld for the reason in regulation 51(1)(aa) or 51(1)(b), an invoice is due to be issued to C, the Settlement Body may deduct all or part of the withheld credit from the amount invoiced, and the amount so deducted is to be treated as having been paid to C.
(3) Except where the withheld credit has been deducted from an invoice in accordance with paragraph (2), the Settlement Body must pay the withheld credit on the next occasion which the Settlement Body considers practicable when—
(a) credit payments are made under this Part; and
(b) the Settlement Body is not required to withhold a credit from C under regulation 51.
(4) Where credit is withheld from C under under regulation 51(1)(aa) and a relevant termination notice is subsequently withdrawn, the Settlement Body must pay the withheld credit in accordance with the formula—
A=X×YZ
where—
A is the adjusted capacity payment;
X is the full monthly capacity payment;
Y is the number of days in that month after (and including) the date the relevant termination notice was issued; and
Z is the total number of days in the month during which the termination notice was issued.
(5) Paragraph (4) applies to the termination of a transferred part as it applies to the termination of a capacity agreement.
(6) In this regulation, “relevant termination notice” has the meaning given in regulation 51(1)(aa).
(1) This Part applies to a person who—
(a) has applied to prequalify for a capacity auction; and
(b) receives a notice from the Delivery Body under capacity market rules (a “conditional prequalification notice”) that it has prequalified in respect of that CMU subject to satisfying the requirements of this Part.
(2) In this Part, “A” means a person who is required to provide credit cover.
(3) In this Part—
“applicant credit cover” means credit cover provided, or required to be provided, by a person to which this Part applies;
“credit cover” means a letter of credit or cash deposit which meets the requirements in regulation 54;
“credit obligation period” means the period for which, under regulation 60, A is required to provide credit cover;
“draw down” means—
in relation to a cash deposit in a bank account, the withdrawal of funds from the account by the Settlement Body;
in relation to a letter of credit, the payment of funds by the issuing bank to the Settlement Body further to a notice of drawing;
“letter of credit” means a letter, in a form approved by the Settlement Body, which contains an irrevocable and unconditional authorisation in favour of the Settlement Body to be paid on demand up to an amount stated in the letter from an account held at a qualifying bank at any time during a period specified in the letter;
“notice of drawing” means a notice signed by or on behalf of the Settlement Body demanding payment under a letter of credit;
“qualifying bank” means—
a United Kingdom clearing bank;
any other bank which has a long term debt rating of—
not less than A– by Standard & Poor's ; or
not less than A3 by Moody's ; or
such other bank as the Settlement Body may approve;
“the required amount” means the amount of credit cover which A is required to provide, as determined in accordance with regulation 59(1), (4) or (5A) or, if applicable, regulation 60(2).
(4) In this Part, references to a prospective generating CMU are to be treated as including any generating CMU in respect of which a bidder is awarded, or an applicant pre-qualifies to bid for, a multi-year capacity obligation in a T-4 auction held on or before 31st July 2016.
(5) In paragraph (3), in the definition of “qualifying bank”—
“Moody's” means the corporation known as Moody's Investors Service, Inc, incorporated in the US State of Delaware with the file number 0577904;
“Standard & Poor's” means the corporation known as Standard & Poor's Corporation, incorporated in the US State of Delaware with the file number 4621989.
(1) A person who is under an obligation to provide credit cover must do so—
(a) for at least the required amount; and
(b) in a permissible form (or partly in one permissible form and partly in the other).
(2) The following are permissible forms of credit cover—
(a) a letter of credit which meets the conditions in paragraph (3);
(b) a cash deposit in a bank account specified by the Settlement Body in accordance with paragraph (4).
(3) The conditions in this paragraph are that the letter of credit is—
(a) issued by a qualifying bank;
(b) in sterling;
(c) available for payment at a London branch of the issuing bank against a notice of drawing delivered by the Settlement Body; and
(d) valid—
(i) at least until the end of the credit obligation period; or
(ii) if the credit obligation period is more than 6 months, for a period of not less than 6 months.
(4) A bank account specified by the Settlement Body for the purpose of paragraph (2)(b) must—
(a) be an interest bearing account in the name of the Settlement Body;
(b) be used only for the purpose of holding credit cover provided under these Regulations; and
(c) be an account the funds in which may only be withdrawn by or on behalf of the Settlement Body.
(1) When credit cover is provided by A, the Settlement Body must—
(a) determine whether the credit cover is—
(i) approved in full;
(ii) approved in part and not approved in part; or
(iii) not approved; and
(b) give a notice to A of its determination.
(2) The Settlement Body must approve credit cover if it meets the requirements in regulation 54, and must not approve it otherwise.
(3) The notice under paragraph (1)(b) must be given—
(a) in the case of additional credit cover provided by A under regulation 56(2), not later than 2 working days after the additional credit cover is provided; and
(b) in any other case, not later than 15 working days after the credit cover is provided.
(1) A must maintain credit cover equal to or more than the required amount at all times during the credit obligation period.
(2) If the Settlement Body gives notice to A that any credit cover provided by A is not approved, A must within 5 working days provide additional credit cover so that the total amount of credit cover provided (excluding credit cover which is not approved or has been drawn down) is equal to or more than the required amount.
(3) Where a letter of credit which A has provided as credit cover is due to expire on a date before the end of the credit obligation period (“the expiry date”), A must, not later than 10 working days before the expiry date, provide to the Settlement Body—
(a) written confirmation from the issuing bank that the letter of credit will be extended by a further period of not less than—
(i) 6 months; or
(ii) the remaining duration of the credit obligation period, if less; or
(b) replacement credit cover.
(3A) If A does not comply with paragraph (3)—
(a) the Settlement Body may immediately draw down on the letter of credit to the full amount stated in the letter of credit and on receipt of funds from the paying bank place the funds in a bank account which satisfies the conditions in regulation 54(4); and
(b) funds placed in a bank account under sub-paragraph (a) shall be treated as credit cover provided by A.
(4) A may at any time during the credit obligation period provide additional credit cover, whether or not A needs to provide the additional credit cover in order to comply with paragraphs (1) to (3).
(1) If A becomes aware that the bank issuing the letter of credit ceases to be a qualifying bank (a “ downgrade ”), then A must give notice to the Settlement Body as soon as it becomes so aware.
(2) If the Settlement Body becomes aware of a downgrade, the Settlement Body may give notice to A to that effect.
(3) A must within 10 working days of the giving of such notice by the Settlement Body or A, whichever is the earlier, provide replacement credit cover so that the total amount of credit cover provided which conforms with regulation 54 is equal to or more than the secured amount.
(4) If A does not comply with paragraph (3)—
(a) the Settlement Body may immediately draw down on the letter of credit to the full amount stated in the letter of credit and on receipt of funds from the paying bank place the funds in a bank account which satisfies the conditions in regulation 54(4); and
(b) funds placed in a bank account under sub-paragraph (a) shall continue to be treated as credit cover provided by A.
(1) This paragraph applies if A has provided credit cover and one of the following circumstances applies—
(a) A is no longer required, under regulation 60, to maintain any credit cover;
(b) A has provided further credit cover under regulation 57(3) to replace the credit cover previously provided, and the Settlement Body has approved the replacement credit cover; or
(c) the amount of credit cover provided by A and approved by the Settlement Body exceeds the required amount.
(2) Where paragraph (1) applies—
(a) A may, by giving notice in writing to the Settlement Body, request the Settlement Body to release—
(i) if paragraph (1)(a) applies, all or part of the credit cover;
(ii) if paragraph (1)(b) applies, the credit cover that has been replaced;
(iii) if paragraph (1)(c) applies, an amount of credit cover not exceeding the amount by which the credit cover referred to in paragraph (1)(c) exceeds the required amount; and
(b) the Settlement Body must release that amount of credit cover as soon as reasonably practicable.
(3) Credit cover is released—
(a) in the case of a cash deposit, by repaying the principal to A; and
(b) in the case of a letter of credit, by issuing notice to A confirming that the letter of credit is no longer required.
(1) Subject to paragraph (1B), an applicant to prequalify for a capacity auction in respect of a CMU (“CMU i”) must, if the applicant receives from the Delivery Body a conditional prequalification notice under capacity market rules, provide applicant credit cover in the amount determined in accordance with paragraph (2).
(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1B) Where an applicant provides applicant credit cover for a capacity auction in respect of an unproven demand side response CMU or an interconnector CMU, the applicant is not required to provide further applicant credit cover for any subsequent capacity auction in respect of that CMU except in circumstances specified in capacity market rules.
(2) Subject to paragraph (2C), the amount of applicant credit cover to be provided is—
(a) in the case of an application to prequalify for a T-4 auction or a T-1 auction—
(i) subject to paragraph (ia), if CMU i is an unproven demand side response CMU, an amount equal to £6,500 per MW of the de-rated capacity of CMU i; ...
(ia) if CMU i is an unproven demand side response CMU, in respect of which the applicant has applied to prequalify to bid for a multi-year capacity obligation and has not yet met the requirements for DSR partial credit cover release in accordance with the Rules, an amount equal to £13,000 per MW of the de-rated capacity of CMU i; and
(ii) if CMU i is not an unproven demand side response CMU, an amount equal to £13,000 per MW of the de-rated capacity of CMU i;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2C) The applicant credit cover provided under paragraph (1) must, where an applicant which applied to prequalify to bid for a multi-year capacity obligation in respect of an unproven demand side response CMU has met the requirements for DSR partial credit cover release in accordance with the Rules, be reduced to an amount equal to £6,500 per MW of the de-rated capacity of the CMU.
(3) If A is required to provide credit cover under paragraph (1), A must do so within 15 working days after receiving the conditional prequalification notice.
(4) The applicant credit cover provided under paragraph (1) in respect of a new build CMU must—
(a) where 12 months have elapsed after auction results day and where an applicant has not met the financial commitment milestone in accordance with the Rules, be increased by the capacity provider to an amount equal to £19,500 per MW of de-rated capacity; and
(b) where subsequently the applicant meets the financial commitment milestone in accordance with the Rules, be reduced to an amount equal to £13,000 per MW of de-rated capacity.
(5) The increased credit cover required to be provided under paragraph (4) must be provided within 15 working days after the end of that twelve-month period.
(5A) Where CMU i is not an unproven demand side response CMU, the applicant credit cover provided under paragraph (1) in respect of CMU i must, where notice requiring an increase in applicant credit cover is given to a capacity provider by the Delivery Body under the Rules, be increased by the capacity provider to an amount equal to £45,500 per MW of de-rated capacity.
(5B) The increased credit cover required to be provided under paragraph (5A) must be provided within 15 working days of notice being given by the Delivery Body.
(6) For the purposes of paragraph (4)—
(a) “new build CMU” has the meaning given in the Rules; and
(b) “auction results day” means the date on which the auction results are published under regulation 25(1)(c).
(7) In this regulation, “DSR partial credit cover release” has the meaning given in the Rules.
59A Requirement to provide applicant credit cover: Transitional provision
(1) This regulation applies to applications made before the coming into force of the Electricity Capacity (Amendment and Transitional Provision) Regulations 2026.
(2) Where this regulation applies, regulation 59 applies as if—
(a) in paragraph (2)—
(i) in sub-paragraph (a)(i), for “£6,500” there were substituted “£5,000”;
(ii) in sub-paragraph (a)(ia), for “£13,000”, there were substituted “£10,000”;
(iii) in sub-paragraph (a)(ii), for “£13,000”, there were substituted “£10,000”;
(b) in paragraph (2C), for “£6,500”, there were substituted “£5,000”; and
(c) for paragraph (4), there were substituted—
(4) In circumstances specified in capacity market rules, the applicant credit cover provided under paragraph (1) in respect of a new build CMU must, where twelve months have elapsed after auction results day, be increased by the capacity provider to an amount equal to £15,000 per MW of de-rated capacity.
.
(1) Where A provides applicant credit cover in respect of a CMU (“CMU i”), A must maintain credit cover in the amount calculated in accordance with regulation 59 until the earliest of the following events has occurred—
(a) where CMU i is an unproven demand side response CMU, the de-rated capacity for CMU i becomes, in accordance with capacity market rules, less than the product (in MW to three decimal places) of the unproven DSR capacity of CMU i and the de-rating factor;
(b) where A is required by capacity market rules to provide confirmation to the Delivery Body of its intention to bid in the capacity auction in respect of CMU i, it does not provide such confirmation within the time required by capacity market rules;
(ba) where A is required by capacity market rules to provide a notice of confirmation or other document as a requirement for being eligible to bid in the capacity auction in respect of CMU i, it does not do so within the time required by capacity market rules;
(c) the capacity auction is—
(i) cancelled; or
(ii) postponed or stopped, and rearranged, and A gives notice to the Delivery Body (where permitted to do so by capacity market rules) that it does not intend to bid in the rearranged auction in respect of CMU i;
(d) A is unsuccessful in its bid at the capacity auction in respect of CMU i;
(e) A has transferred its capacity agreement in respect of CMU i to another person in accordance with capacity market rules and the transferee has provided replacement credit cover which the Settlement Body has approved;
(f) where CMU i is a demand side response CMU, A has in accordance with capacity market rules provided to the Delivery Body a DSR test certificate which evidences—
(i) a proven DSR capacity equal to or greater than CMU i’s de-rated capacity; or
(ii) a proven DSR capacity less than CMU i’s de-rated capacity, but equal to or greater than 90% of that capacity;
(g) where CMU i is not an unproven demand side response CMU, A has fully discharged all the requirements in capacity market rules against which its applicant credit cover was secured, and which a failure to meet would either—
(i) result in its capacity agreement being terminated under capacity market rules; or
(ii) prevent A from being entitled under capacity market rules to capacity payments in respect of CMU i;
(ga) where CMU i is a generating CMU, the Delivery Body has terminated the capacity agreement in respect of CMU i—
(i) under regulation 34(1); or
(ii) under regulation 34A(3);
(h) the credit cover is drawn down under regulation 61.
(2) Where paragraph (1)(a) applies, A must thereafter maintain credit cover—
(a) for a T-4 or a T-1 auction, in an amount equal to £5,000 per MW of the amount of the de-rated capacity of CMU i ; or ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) where CMU i is awarded a capacity obligation following an application made after the coming into force of the Electricity Capacity (Amendment and Transitional Provision) Regulations 2026, in an amount equal to £6,500 per MW of the amount of the de-rated capacity of CMU i,
until the earliest of the events in sub-paragraphs (b) to (h) of paragraph (1) has occurred.
(3) Where paragraph (1)(f)(ii) applies—
(a) the Settlement Body must draw down part of the credit cover calculated in accordance with paragraph (5); and
(b) the applicant must maintain credit cover in the amount so calculated until it has been drawn down, but is no longer required to maintain the remainder of the credit cover.
(4) Where any other sub-paragraph of paragraph (1) applies, the applicant is no longer required to maintain any credit cover.
(5) The amount of credit cover to be drawn down under paragraph (3)(a) (“DD”) must be calculated in accordance with the formula—
D
D
=
R
A
×
U
C
−
P
C
U
C
.
(6) In paragraph (5)—
“DC” means CMU i’s de-rated capacity;
“PC” means CMU i’s proven DSR capacity;
“RA” means the required amount for CMU i as calculated under regulation 59;
...
(7) In this regulation “the capacity auction” means the capacity auction in relation to which applicant credit cover has been provided in respect of CMU i.
(1) The Settlement Body must draw down applicant credit cover provided by A in respect of a CMU (“CMU i”) if—
(a) where CMU i is an unproven demand side response CMU—
(i) the credit obligation period has not ended by the date on which the delivery year of A's capacity agreement in respect of CMU i commences; or
(ii) the Settlement Body receives a notice from the Delivery Body that A has provided a DSR test certificate which evidences a proven DSR capacity less than 90% of CMU i's de-rated capacity;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) payment of a termination fee or non-completion fee has become due pursuant to an invoice issued under regulation 43 or 43A, and the termination fee or non-completion fee is unpaid.
(2) Where the Settlement Body is required to drawn down applicant credit cover—
(a) under sub-paragraph (a)(i) ... of paragraph (1), it must do so within 60 days from the date specified in that sub-paragraph;
(b) under sub-paragraph (a)(ii) of paragraph (1), it must do so within 60 days from the date on which the Settlement Body receives the notice referred to in that sub-paragraph;
(c) under sub-paragraph (c) of paragraph (1), it must do so as soon as reasonably practicable after the date on which payment of the termination fee or non-completion fee becomes due.
(3) Subject to paragraph (4), applicant credit cover which is drawn down in accordance with this regulation is forfeited by A.
(4) If, after applicant credit cover has been drawn down, it is determined under Chapter 2 of Part 10 that the credit cover should not have been drawn down, the Settlement Body must pay to A the amount of the credit cover that was wrongly drawn down.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A may not bid in a capacity auction in respect of a CMU for which applicant credit cover is required, if A has not complied with this Part in relation to the provision of applicant credit cover in respect of that CMU.
(1) The Secretary of State may, for the purpose of any review of the capacity market under regulation 81, require—
(a) an administrative party;
(b) an electricity supplier; or
(c) the owner of a CMU (whether or not a capacity provider),
to provide the Secretary of State with any specified information.
(2) The Authority may, for the purpose of exercising its functions under regulation 82 or 83, require—
(a) an administrative party;
(b) an electricity supplier; or
(c) the owner of a CMU (whether or not a capacity provider),
to provide the Authority with any specified information.
(3) A person appointed under capacity market rules as an auction monitor may require—
(a) any bidder in a capacity auction;
(b) the Delivery Body; or
(c) the auctioneer,
to provide it with any specified information relating to the conduct of a capacity auction.
(4) Any requirement on a person to provide information under this regulation must be made by giving notice to the person in writing; and references in this regulation to “specified information” mean information specified in such a notice.
(5) Any person on whom a requirement is made under this regulation must, subject to regulation 64, comply with the requirement as soon as reasonably practicable.
(1) A person may not be required under these Regulations or capacity market rules to produce, disclose or permit the inspection of protected items.
(2) In paragraph (1) “protected items” means—
(a) communications between a professional legal adviser (“LA”) and LA's client or any person representing LA's client which fall within paragraph (3);
(b) communications between LA, LA's client or any person representing LA's client and any other person which fall within paragraph (3) (as a result of sub-paragraph (b) of that paragraph);
(c) items which—
(i) are enclosed with, or referred to in, such communications;
(ii) fall within paragraph (3); and
(iii) are in the possession of a person entitled to possession of them.
(3) A communication or item falls within this paragraph if it is made—
(a) in connection with the giving of legal advice to the client; or
(b) in connection with, or in contemplation of, legal proceedings and for the purposes of those proceedings.
(4) A communication or item is not a protected item if it is held with the intention of furthering a criminal purpose.
(1) A person who, by virtue of these Regulations or capacity market rules, has obtained information which relates to the affairs of any individual or to any particular business (“protected information”) must not except as provided in paragraphs (2) to (4)—
(a) use that information for any purpose other than—
(i) participating in the capacity market;
(ii) exercising capacity market functions; or
(iii) providing services to a person exercising capacity market functions; or
(b) disclose that information.
(2) Paragraph (1) does not prohibit a use or disclosure of protected information which is—
(a) made with the consent of the person to whom the information relates; or
(b) required by—
(i) an enactment (including capacity market rules);
(ii) auction guidelines;
(iii) a licence condition (where the person using or disclosing the information is a licence holder);
(iv) a condition of an industry code to which the person using or disclosing the information is a party; or
(v) an assimilated obligation.
(3) Paragraph (1) does not prohibit the use of protected information—
(a) by the Secretary of State, the Authority or the Delivery Body, for the purpose of exercising any EMR functions;
(b) by the Authority, for the purpose of exercising any other statutory functions; or
(c) where the Delivery Body is the national system operator, by the national system operator for the purpose of exercising its functions, to the extent that the use of the information is permitted by the conditions of the national system operator's transmission licence.
(4) Paragraph (1) does not prohibit the disclosure of protected information—
(a) to a person exercising capacity market functions, to the extent that the disclosure is required to enable that person to carry out those functions;
(b) by an administrative party to any public authority exercising any functions in relation to competition law, to the extent that the disclosure is required to enable that authority to carry out those functions in relation to the capacity market;
(c) by an administrative party to a person providing services to it in connection with its performance of capacity market functions, to the extent that the disclosure is required to enable that person to provide those services;
(d) which is already publicly available (other than by reason of a breach of this regulation); or
(e) in accordance with an order of a court.
(5) In this regulation—
“capacity market functions” means functions conferred by or by virtue of Chapter 3 of Part 2 of the Act;
“EMR functions” means functions conferred by or by virtue of Chapter 2, 3 or 4 of Part 2 of the Act;
...
“licence” means a licence under section 6 of EA 1989.
(1) The following requirements are enforceable by the Authority as if they were relevant requirements on a regulated person for the purposes of section 25 of EA 1989 —
(a) the duties and prohibitions in Part 8 (information), except in so far as they apply to the Secretary of State or the Authority;
(b) any other requirement to which any person other than the Secretary of State, the Authority or the Settlement Body is subject under these Regulations , the Supplier Payment Regulations or capacity market rules.
(2) For the avoidance of doubt, paragraph (1) applies whether or not the person on whom a requirement is imposed is in fact a regulated person within the meaning of EA 1989.
(1) In this Chapter, a “delivery body reviewable decision” means a decision by the Delivery Body under capacity market rules of a kind specified in the first column of the following table.
(2) A dispute or appeal in relation to a delivery body reviewable decision may only be brought—
(a) by a person specified in the corresponding entry in the second column of the table (an “affected person”); and
(b) in accordance with this Chapter.
Table
Decision | Person who may bring dispute or appeal
A prequalification decision. | The applicant or secondary trading entrant in relation to whom the decision has been made.
A refusal of a request for rectification of the capacity market register on the basis of factual inaccuracy. | The person who made a request for rectification in accordance with capacity market rules.
A refusal of a request to amend a capacity agreement notice on the basis of factual inaccuracy. | The capacity provider to whom a capacity agreement notice has been issued, and who has made a request to amend it in accordance with capacity market rules.
The issue of a non-completion notice, a termination notice, or a notice of intention to terminate a capacity agreement or a transferred part. | The capacity provider to whom the notice has been issued.
A low emissions determination | The capacity provider to whom the notice of the determination was given
The issue of a CCS CFD transfer refusal notice. | The capacity provider who made a request for termination and to whom the notice has been issued.
(3) In the table in paragraph (2), “CCS CFD transfer refusal notice”, “secondary trading entrant” , “termination notice” and “notice of intention to terminate” have the meaning given in the Rules.