In our response, we acknowledge the potential of locational pricing to improve the system by reducing balancing and transmission constraint costs, but note consideration is needed to ensure it is for the overall benefit of consumers. Our response notes that the key challenge to implementing locational pricing is ensuring that the design is robust and its implications for all types of party are fully understood. We list several options to manage risks to consumers, suppliers and generators. If locational pricing is implemented we believe it should take place gradually using transitional arrangements. We have also provided details on attributing demand to customers and mapping metering systems.
Elexon's response to Ofgem's Call for Input on Locational Pricing Assessment (Size: 300.21 KB)