Response to the NESO Balancing, Settlement, and Dispatch Reform

Key messages

<!-- [if !supportLists]-->·  We support the RNP (Reformed National Pricing) process and remain active in our engagement, as balancing reform is an important component. We continue to generally support a gradual phased approach to implementing impactful reforms.

<!-- [if !supportLists]-->·     As previously supported in our 2024 REMA response, the proposals to lower the threshold for mandatory participation in the balancing mechanism and to shorten the Imbalance Settlement Period to 15 minutes merit further consideration. Any such changes would need to be supported by robust evidence and a clear benefit case demonstrated through a comprehensive cost-benefit analysis.

<!-- [if !supportLists]-->·   We do not support changes like unit-level bidding, aligning gate closure and trading deadline, and matching Final Physical Notifications with traded positions. As observed by market participants, only one of the three options listed could be realised (alignment), the other two indicating a return to a gross pool. These measures also head towards a central dispatch model, whereas we argue for the retention and improvement of the self-dispatch model.

<!-- [if !supportLists]-->·      <!--[endif]-->Considering ongoing negotiations to reintegrate GB markets with EU Internal Energy Market, we strongly recommend keeping alignment on design elements to facilitate technical processes following the political negotiations outcomes.