The Electricity Capacity Regulations 2014 No. 2043

PART 7 E+W+S Credit cover

CHAPTER 2 E+W+S Applicant credit cover

Credit obligation period E+W+S

60.—(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, A nominates before the capacity auction, in accordance with capacity market rules, a DSR bid capacity for CMU i which is less than the de-rated capacity of CMU i;

(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;

(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 unproven DSR capacity; or

(ii) a proven DSR capacity less than CMU i’s unproven DSR capacity, but equal to or greater than 90% of that capacity;

(g) where CMU i is a prospective generating CMU [F1 or a prospective interconnector CMU]—

(i) A has achieved its financial commitment milestone in accordance with capacity market rules; and

(ii) if CMU i is a distribution CMU in respect of which A did not provide a copy of a distribution connection agreement with its application for prequalification, A has provided a copy of its distribution connection agreement to the Delivery Body in accordance with capacity market rules; or

(h) the credit cover is drawn down under regulation 61.

(2) Where paragraph (1)(a) applies, A must thereafter maintain credit cover in an amount equal to £5,000 per MW of the amount of the DSR bid 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—

(6) In paragraph (5)—

“PC” means CMU i’s proven DSR capacity;

“RA” means the required amount for CMU i as calculated under regulation 59;

“UC” means CMU i’s unproven DSR capacity.

(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.

Textual Amendments

F1 Words in reg. 60(1)(g) inserted (24.3.2015) by The Electricity Capacity (Amendment) Regulations 2015 (S.I. 2015/875), reg. 1(2), Sch. 1 para. 10