The Electricity Capacity (Amendment) Regulations 2016

New paragraph 6A

35.  After paragraph 6 insert—

“Capacity provider penalty charges: apportionment

6A.— (1) Immediately after calculating SPPSA_ij for a relevant CMU i and any relevant settlement period j in month M under paragraph 6, the settlement body must also calculate D in accordance with the formula—

,

where “SPPSA_i(j-1)” is the settlement period penalty settlement amount for CMU i in the relevant settlement period preceding period j (or, where j is the first such period in month M, zero).

(2) For each relevant settlement period j in month M, the settlement body must then determine for each obligation ICO_ij applying to CMU i in that settlement period (“ICO_ijN”)—

(a) the monthly penalty cap applying in respect of ICO_ijN (“MPC_ijN”); and

(b) the apportioned settlement period penalty amount for ICO_ijN (“ASPPA_ijN”) as determined in accordance with sub-paragraph (4).

(3) For the purpose of sub-paragraph (2)(a), MPC_ijN is to be determined in accordance with the formula—

,

where—

“ICO_ijN” is the whole or a part of the capacity obligation CO_zx awarded in respect of CMU z for year X,

“PE_zx” means the price in pounds per MW determined for CO_zx in accordance with paragraph 3(4) to (6),

“F_z” is to be interpreted in accordance with paragraph 6(6), and

“”

means the sum of all apportioned settlement period penalty amounts calculated for ICO_ijN when that obligation applies to CMU i in any relevant settlement period in month M that precedes period j (or, where j is the first such period, zero).

(4) For the purpose of sub-paragraph (2)(b) ASPPA_ijN is to be determined as follows (where D is the result of the calculation referred to in sub-paragraph (1))—

(a) for each obligation ICO_ijN referred to in sub-paragraph (2), calculate PR_N in accordance with paragraph 5(3), and arrange those obligations in a series (beginning with ICO_ij1) as described in paragraph (b);

(b) each such obligation ICO_ijN is ranked according to the magnitude of its corresponding PR_N (in descending order with the highest corresponding penalty rate first), except that where the same penalty rate corresponds to more than one such obligation those obligations are ranked between themselves—

(i) according to the date on which the obligation was awarded in respect of CMU i, or transferred so as to apply to CMU i (with the latest such date first), and

(ii) for obligations awarded or transferred on the same date, according to the time at which a request to transfer the obligation was received by the Delivery Body (with the latest such time first), and with an awarded obligation ranking prior to any transferred obligation;

(c) then for any such ICO_ijN—

(i) if,;

(ii) if and,; and

(iii) otherwise, .”.