On 13 August 2019, Ofgem issued a Request for Information (RfI) seeking views on the cost impact of settlement reform based on Ofgem’s preferred Target Operating Model (TOM) for market-wide Half Hourly Settlement (MHHS).
ElectraLink’s view is that procuring an entirely new network to deliver the data communications of the programme would be disproportionately costly, lengthy and risky compared to making use of the existing Energy Market Data Hub (EMDH) for the following reasons:
- The EMDH is scalable and stable with the proved capacity to manage more than 100x the volume of half hourly data currently processed by the market,
- The EMDH has already been competitively procured on the energy market’s behalf and is connected to all settlement-critical market participants, therefore reducing initial and ongoing costs to industry, and
- The EMDH meets all of the programme’s requirements as specified by Ofgem, supported by ElectraLink’s 20 years of energy market expertise as a central body with robust governance provisions and an important role in promoting market transparency, choice and competition.
We believe there is no business case to support procuring a network from scratch to deliver this programme considering the EMDH already provides this service to the energy market and can support the MHHS programme for as little as an additional £1m per year with costs spread across usual Data Transfer Service (DTS) charges.
Please read our full paper, The EMDH Delivering Half Hourly Settlement, for further evidence on our view which we hope will inform industry’s responses to Ofgem’s RfI.
For more information, please contact us at [email protected]