The Power Purchase Agreement Scheme Regulations 2014

Regulation 11(1)

SCHEDULE BPPA auction process

PART 1 The auction

One auction in respect of each eligible generator

1.  One auction is to be held in respect of each eligible generator irrespective of the number of BPPAs determined in accordance with regulation 4 as being subject to the auction in respect of that generator.

Close of the auction period

2.—(1) Each auction closes at the end of the 10-day period which starts with the first day after the date on which the OLR notice is sent to licensed suppliers under regulation 7(1)(b).

(2) Sub-paragraph (1) is subject to paragraph 3(2) and regulation 10.

Errors or omissions in information submitted by eligible generator

3.—(1) If at any time before the close of an auction the Authority identifies that there is an error in or omission from the project information submitted by an eligible generator, the Authority must give a notice to the eligible generator which—

(a) states the details of the error or omission and asks the eligible generator to provide an explanation;

(b) states that, if the eligible generator accepts that there is an error or omission, the eligible generator must provide an updated version of the project information; and

(c) states that, if the eligible generator does not provide either an updated version of the project information or confirm to the Authority that there is no error or omission—

(i) within 2 days of the start of the 10-day period specified in paragraph 2, the date on which the auction closes is delayed in accordance with sub-paragraph (2);

(ii) within 5 days of the date of the notice under this sub-paragraph, the auction is terminated in accordance with regulation 10(1)(b) and (2)(c).

(2) Where more than 2 days of the 10-day period specified in paragraph 2 have elapsed before the Authority receives an eligible generator’s response to a notice under sub-paragraph (1)—

(a) the auction does not close until the end of a further 10-day period which starts with the date on which the response is received;

(b) the Authority must give a notice to all licensed suppliers stating the date on which the auction closes by virtue of paragraph (a); and

(c) where the Authority receives an updated version of the project information from the eligible generator, the Authority must send a copy to all licensed suppliers.

(3) Sub-paragraph (2) does not apply where the auction is terminated in accordance with regulation 10(1)(b) and (2)(c).

PART 2 Selecting a licensed supplier in respect of a BPPA

Single BPPA subject to an auction

4.  Paragraphs 5 to 7 apply in any case where—

(a) not more than one BPPA is subject to an auction in respect of an eligible generator; and

(b) one or more bids in that auction are received by the Authority before the auction closes.

Determining the successful bid

5.—(1) The Authority must in accordance with sub-paragraphs (2) to (5) select the successful bidder in respect of the BPPA.

(2) The Authority must take no account of any bid made by a licensed supplier which is not connected to the GSP group that is specified in the eligible generator’s project information in relation to the generating station specified in that project information.

(3) If only one bid was received, the Authority must select the licensed supplier which submitted that bid.

(4) If more than one bid was received, the Authority must—

(a) compare the amount of the management fee which, in accordance with relevant supply licence conditions, each bidder proposed for the BPPA; and

(b) select as the successful bidder the licensed supplier which proposed the lowest amount.

(5) Where the lowest amount of management fee is proposed in bids which are submitted by more than one licensed supplier, the Authority must select as the successful bidder the licensed supplier whose bid the Authority received first.

(6) Within one day of the close of the auction, the Authority must give a notice to—

(a) the licensed supplier which is selected under this paragraph, stating that the licensed supplier has been selected as the successful bidder in respect of the BPPA;

(b) all other licensed suppliers which bid in the auction, stating that they have not been selected; and

(c) the eligible generator, stating the name of the licensed supplier selected and enclosing the signed copies of the BPPA which the licensed supplier provided to the Authority in accordance with relevant supply licence conditions.

Reserve bids

6.—(1) Each licensed supplier which submitted a bid in respect of the BPPA subject to an auction is to be treated for the purposes of paragraph 7 as a reserve bidder which submitted a reserve bid in respect of the BPPA.

(2) Sub-paragraph (1) does not apply to—

(a) the successful bidder; or

(b) any voluntary licensed supplier which specified in its bid in accordance with relevant supply licence conditions that the bid was not to be considered as a reserve bid.

Consideration of reserve bids

7.—(1) Sub-paragraph (2) applies where an eligible generator which has entered into a BPPA with an OLR which has been selected under paragraph 5 or this paragraph gives notice which states that it—

(a) is in accordance with the terms of the BPPA;

(b) is given on the grounds that the OLR has committed a material breach of the BPPA; and

(c) results in termination of the BPPA no more than 5 days after the date determined in accordance with the BPPA’s terms as being its date of its commencement.

(2) The Authority must repeat the steps specified in paragraph 5(2) to (5) in order to select the successful reserve bidder in respect of the BPPA and, in the application of that paragraph for this purpose—

(a) any reference to “bid” is to be read as if it were a reference to “reserve bid”;

(b) any reference to “bidder” is to be read as if it were a reference to “reserve bidder”; and

(c) no account is to be taken of any bid submitted by any licensed supplier which has already received a notice in respect of that BPPA under paragraph 5(6)(a) or sub-paragraph (3)(a).

(3) Within one day of receiving the notice under sub-paragraph (1), the Authority must give a notice to—

(a) the licensed supplier which is selected under this paragraph, stating that the licensed supplier has been selected as the successful reserve bidder; and

(b) the eligible generator, stating the name of that licensed supplier and enclosing the signed copies of the BPPA which the licensed supplier provided to the Authority in accordance with relevant supply licence conditions.

Multiple BPPAs subject to an auction

8.  Paragraphs 9 to 11 apply where—

(a) in accordance with regulation 4, two or more BPPAs are to be subject to an auction in respect of an eligible generator; and

(b) two or more bids in that auction are received by the Authority before the auction closes.

Determining the successful bid: multiple BPPA auction

9.—(1) The Authority must take no account of any bid made by a licensed supplier which is not connected to the GSP group that is specified in the eligible generator’s project information in relation to the generating station specified in that project information.

(2) The Authority must—

(a) identify the amount of the management fee which, in accordance with relevant supply licence conditions, was proposed in each bid submitted by a licensed supplier; and

(b) draw up a list which ranks all such amounts in order, from lowest to highest.

(3) The Authority must select from the list drawn up under sub-paragraph (2)(b)—

(a) the licensed supplier which proposed the lowest amount as the successful bidder for one of the BPPAs subject to auction; and

(b) the licensed supplier which proposed the next lowest amount as the successful bidder for another of the BPPAs subject to auction,

and so on until a successful bidder has been selected for all of the remaining BPPAs subject to auction.

(4) Where the same amount of management fee is proposed by more than one licensed supplier who would otherwise be selected under sub-paragraph (3) in respect of a BPPA, the Authority must—

(a) select as the successful bidder for that BPPA the licensed supplier whose bid the Authority received first; and

(b) if another BPPA remains to be considered by the Authority, select as the successful bidder for that other BPPA the licensed supplier whose bid the Authority received second,

and so on until all of the licensed suppliers which proposed that amount of management fee have been selected.

(5) Within one day of the close of the auction, the Authority must give a notice to—

(a) each licensed supplier which is selected under this paragraph, stating that the licensed supplier has been selected as the successful bidder in respect of a BPPA;

(b) all other licensed suppliers which bid in the auction, stating that they have not been selected; and

(c) the eligible generator, stating the name of each licensed supplier selected and in each case enclosing the signed copies of the BPPA which the licensed supplier provided to the Authority in accordance with relevant supply licence conditions.

Reserve bids: multiple BPPA auction

10.—(1) Each licensed supplier which submitted a bid in respect of a BPPA subject to an auction is to be treated for the purposes of paragraph 11 as a reserve bidder which submitted a reserve bid in respect of that BPPA.

(2) Sub-paragraph (1) does not apply—

(a) to any bid submitted by a licensed supplier which has already been selected under paragraph 9 or 11; or

(b) to any bid submitted by a voluntary licensed supplier which specified in its bid in accordance with relevant supply licence conditions that the bid was not to be considered as a reserve bid.

Consideration of reserve bids: multiple BPPA auction

11.—(1) Sub-paragraph (2) applies where an eligible generator which has entered into a BPPA with an OLR which has been selected under paragraph 9 or this paragraph gives notice which states that it—

(a) is in accordance with the terms of the BPPA;

(b) is given on the grounds that the OLR has committed a material breach of the BPPA; and

(c) results in termination of the BPPA no more than 5 days after the date determined in accordance with the BPPA’s terms as being its date of its commencement.

(2) The Authority must exclude from the list drawn up under paragraph 9(2)(b) any bid made by a licensed supplier which has already received a notice in respect of a BPPA under paragraph 9(5)(a) or sub-paragraph (4)(a).

(3) The Authority must select from that list the successful reserve bidder for the BPPA as being the licensed supplier which—

(a) by virtue of paragraph 10 is treated as a reserve bidder in respect of any bid made by the supplier; and

(b) proposed an amount of management fee which is lower than any other amount which is then remaining on that list.

(4) Within one day of receiving the notice under sub-paragraph (1), the Authority must give a notice to—

(a) the licensed supplier which is selected under this paragraph, stating that the licensed supplier has been selected as the successful reserve bidder; and

(b) the eligible generator, stating the name of that licensed supplier and enclosing the signed copies of the BPPA which the licensed supplier provided to the Authority in accordance with relevant supply licence conditions.

Publishing the outcome of an auction

12.  In relation to each BPPA which is entered into by an OLR, the Authority must publish a statement specifying—

(a) the name of OLR;

(b) the name of the eligible generator which is party to the BPPA; and

(c) the amount of the management fee payable to the OLR under the BPPA, expressed as an amount for each megawatt hour of electricity.