Ofgem has granted a request by National Grid Electricity System Operator (ESO) to delay its implementation of the Trans European Replacement Reserves Exchange (TERRE) until the beginning of next year.
The go-live date was originally due by 15 January 2020 but several months earlier the regulator allowed the ESO to postpone implementation until 30 June at the latest due to technical issues being faced by its French equivalent RTE.
In April, Ofgem informed the ESO that it would be given leeway to de-prioritise some areas of work as part of the regulatory flexibility afforded to license holders in response to the coronavirus pandemic. Ofgem told the ESO in June that this exception would end on 27 October 2020 in the case of TERRE.
The latest derogation comes after the ESO issued an update in early September stating that the pandemic had affected the launch of the application programme interface (API) developed as part of its efforts to widen access to the balancing mechanism. It said this would also affect TERRE which could not be implemented until early December.
National Grid also suggested that the go-live date should be postponed until 1 January 2021 given the uncertainty over the UK’s access to EU balancing platforms following Brexit.
In an open letter published on Friday (6 November), Ofgem said that since granting a derogation to National Grid, stakeholders have “expressed frustration at the delays, lack of certainty regarding the implementation timelines and the level of engagement they’ve received from the ESO.
“Stakeholders have stated that they have not had sufficient clarity to plan the necessary updates to their own systems and that this is leading to increased costs and uncertainty.”
The regulator said the ESO’s engagement with stakeholders has been “below our expectations”.
Ofgem accepted National Grid’s motivations for wanting a further postponement until the start of the new year but said the “lack of clear planning” beyond that point could lead to “much longer delays”.
The regulator said the ESO must therefore work with key stakeholders, including Elexon, interconnector operators and market participants, to develop a new implementation plan “based on a small range of credible scenarios for 1 January 2020.”
It said the ESO must make “quick progress against that plan as soon as we have certainty of what the situation will be” and ensure there are measures in place to allow it to continue trading cross-border balancing services if it is unable to access TERRE.