Each flexibility market will be assessed for its liquidity and competition.
Markets which are deemed uncompetitive or without liquidity will be offered a price ceiling to participate in a flexibility contract. This is illustrated in the diagram below.
We will offer a flexibility price ceiling of £300/MWh for flexibility on our sustain peak management flexibility service. A calculator will be provided to help translate this into availability (a commitment to deliver energy) and utilisation (energy delivery) payments.
Markets which are deemed competitive i.e. have more than one entrant and offer a supply of flexibility (measured in Megawatts (MW)) greater than the DNO’s demand for flexibility, will be run through competition. As shown below, the competitive market will offer two options: auctions or a fixed price contract.
Auctions will require participants to submit competing bids and offers and SSEN selecting the lowest cost solutions to deliver its constraint.
A fixed price contract will offer the average price at which auctions settle at minus a degree of risk which TRANSITION absorbs by taking this approach.
The fixed price initially offered within competitive markets will be £200/MWh. Competitive auctions may settle above or below this price.
The third route option is through one of our Market Stimulation Packages. They will offer simplicity and financial support to help assets enter the market. They may pay less than the market options presented above.
The different routes to market acknowledge people are comfortable taking different levels of financial risk and intend to allow you to choose a package that involves the level of risk you are confident with.
We can help you to understand the different options so you can make the choice that is right for you.