We’re proud that DECC has chosen us to undertake the role as the EMR Settlement Services Provider and that we’re working to deliver this key piece of UK energy market infrastructure.
The EMR Settlement Ltd (EMRS) is a wholly owned subsidiary of ELEXON Ltd and was set up in March 2014 after DECC recognised that ELEXON has the experience and capability to be the Settlement Agent for the Contract for Difference (CfD) and Capacity Market (CM), seeing the similarities between the data, systems and processes that successfully operate under the BSC and those that will be required for CfD and CM.
Governance and funding
Governance
ELEXON’s appointment as the Settlement Services Provider (SSP) for Contract for Difference (CfD) and Capacity Market was formalised by the successful passage of the Energy Bill setting up Electricity Market Reform (EMR) through Parliament in December 2013. In August 2014, BSC changes needed for EMR were directed by the Secretary of State providing ELEXON with a framework to carry out their role as the EMR Settlement Services Provider.
ELEXON is delivering its EMR settlement functions through a subsidiary body – EMR Settlement Ltd. A managed services agreement has been put in place which sets out the arrangements for the provision of shared services and resources between ELEXON Ltd and EMR Settlement.
Contractual arrangements have been set up for the provision of EMR settlement services by EMR Settlement Ltd to the CfD Counterparty Body and the CM Settlement Body.
Funding
How will the implementation of the Settlement Services Provider role be funded?
Although many EMR suppliers and generators will also be BSC Parties, the arrangements for funding the Capacity Market and CfD Settlement Service Provider (ie the roles being undertaken by EMR Settlement Ltd) are covered under different governance and funding arrangements to the BSC.
DECC has put in place a grant for the set up period to ensure that BSC Parties are not required to shoulder the implementation costs. EMR Settlement’s operating costs are funded via the contract for settlement services with the CfD Counterparty Body and CM Settlement Body and will ultimately be recovered from electricity suppliers.