energy suppliers forum cdcm/edcm - cmg update mo sukumaran – cmg 10 november 2010 1 | energy...
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Energy Suppliers Forum
CDCM/EDCM - CMG Update
Mo Sukumaran – CMG
10 November 20101 | Energy Networks Association
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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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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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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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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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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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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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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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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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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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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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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Outline timeline
DCMF meeting 2 December 2010
Consultation published 10 December
Consultation workshop 13 January 2011
Consultation closes 31 January
DCMF meeting 3 February
EDCM submission deadline 1 April
See ENA web site for details of timeline:
http://energynetworks.squarespace.com/edcm-file-storage/05-edcm-meeting-dates-project-plan-and-project-risks/
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Revised plan
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Model Lockdown
End of December
April 2011 Submission
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
Option 27 24/9
Opinion 30/9
Option 30 28/9
Opinion 7/10 DCMF 7/10
Trial Justification
Workshop 18/11
Further Development
Consultation Testing
Industry Briefing
Industry Briefing
DCMF 2/12
Workshop 13/1
DCMF 3/2
Prepare Consultation
DCMF TBC
Justification Criteria
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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DCMF Open governance
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•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
10 November 2010
CDCM issue raised
CDCM issue raised
Recommendation received
Recommendation received
Issue assessed and developed
Issue assessed and developed
Min 15 WD Consultation for standard changes
DNO modeling carried out(note: possibly coordinated by the COG Charging Group)
Min 15 WD Consultation for standard changes
DNO modeling carried out(note: possibly coordinated by the COG Charging Group)
Review and challenge
Review and challenge
Consultation presented to SIG
Consultation presented to SIG
Initial assessment Report presented to the DCUSA Panel
Initial assessment Report presented to the DCUSA Panel
Response to consultation reviewed & published
Response to consultation reviewed & published
ProgressCP?
ProgressCP?
Added to next SIG
Added to next SIG
Progression route and timetable confirmed
Progression route and timetable confirmed
Working Group Invitations sent and assessment carried out
Working Group Invitations sent and assessment carried out
Authority decision
letter issued
Authority decision
letter issued
Change declaration issued to Ofgem
Change declaration issued to Ofgem
YesYes
Potential resource provision from COG
Potential resource provision from COG
Parties vote and issue DCUSA recommendation
Parties vote and issue DCUSA recommendation
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