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Ofgem is proceeding will plans to establish a new advisory group as part of reforms to the rule change process for the Capacity Market.
The regulator said new arrangements will enable the process to become “more dynamic and adaptive to changing market conditions, whilst also increasing transparency and promoting collaboration”.
Ofgem said the current annual process has increased “duration, complexity, and difficulty” over time, with the current timescales for developing, approving and implementing changes placing “significant burden and risk” on participants, delivery partners and itself.
The Capacity Market Advisory Group (CMAG) will provide “a forum for industry to develop, scrutinise and prioritise proposals.” Ofgem said ending the annual process and giving industry a greater role in the development of changes will reduce this burden.
The regulator stressed that it will retain “full decision-making responsibility” for approving rule changes and there will be no obligation for it to proceed with the group’s recommendations. It is also noted its position that it no longer considers it appropriate for consultations to be timed to meet prequalification deadlines for auction rounds.
Ofgem has appointed Balancing and Settlement Code (BSC) administrator Elexon to act as secretariat for the new group. It said the first meetings will only be held once the new arrangements have been put in place through a BSC modification, which it expects to be implemented in September or October 2022.
The members of the group, who will sit for an initial period of two years, will also be appointed by the regulator, which has invited qualified candidates to apply.
Commenting on the decision, Elexon chief executive Simon McCalla said: “The Capacity Market plays an important role in securing electricity supplies and we are very pleased that Ofgem has confirmed that Elexon will take on the CMAG secretariat role.
“We already work closely with BSC parties to develop and consult on reforms to the BSC, and we can apply this significant expertise and experience to managing the CMAG on behalf of Ofgem, for the benefit of industry parties and consumers.”
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