Elexon’s response to Ofgem’s Consultation on the Market facilitator delivery body

We’ve published our response to Ofgem’s consultation on the market facilitator delivery body.

In our response to Ofgem’s consultation we:

Lay out our vision for this role
Explain priorities that the market facilitator should immediately address
Discuss key milestones in the medium and long-term
Highlight the benefits Elexon could bring to the role.

Following extensive engagement with industry to understand their needs, and drawing on our considerable experience – ranging from Balancing Mechanism settlement and data transparency to market design and ensuring the accuracy of settlement data through metering and process assurance – we highlight the strong similarities between the role’s requirements and the capabilities we have developed over the past 25 years.

We express support for Ofgem’s vision for the market facilitator and commend their efforts to establish the necessary governance arrangements at a sub-national level required to achieve net zero.

We note that some aspects of Ofgem’s consultation may have overlooked Elexon’s characteristics due to limited awareness of our past deliverables. To address this gap and assist Ofgem and others, we have compiled a series of Discussion Papers. These papers address key areas that must be considered and decided upon once the market facilitator delivery body is appointed. Areas include accountability, market design expertise, metering, data management, and industry-wide programme design that deliver complex change, among others.

Elexon has taken a proactive approach by outlining the requirements we believe the market facilitator will need to evaluate, which are beyond the scope of the consultation. We also highlight some of our past and present deliverables that align with these requirements.

Key points

Some of the key points outlined in our consultation and supplementary documents include:

1. Agreement with Ofgem’s design principles, emphasising the addition of “Trust” as a crucial principle. In our view, the lack of trust in the market facilitator could significantly hinder the development of flexibility markets. We also suggest that Ofgem consider principles holistically, rather than in isolation. For example, combining expertise, impartiality, and trust for transparent processes and inclusivity.

2. Emphasised the importance of impartiality, neutrality, trust, inclusivity and accountability for effective implementation and delivery of the market facilitator role. The absence of these core principles could lead to inefficient outcomes or a conflict of interest.

3. Partial agreement with Ofgem’s assessment of Elexon’s suitability, highlighting specific principles where evidence may have been incomplete. To demonstrate our expertise in areas where evidence may have been lacking, we generated a collection of Discussion Papers covering various aspects of Elexon’s expertise in relation to the design principles for the market facilitator role, such as governance, market design, metering, data, and others. The aim is to provide additional evidence, demonstrating our expertise in those specific areas and explain why this expertise is important, if not critical, for the market facilitator.

4. Acknowledgement that any entity taking on the role will need to develop distribution level expertise. While we have over five years of experience in collaborating with the Energy Networks Association Open Networks group and other initiatives focused on sub-national arrangements, we have pinpointed specific areas where our expertise will be strengthened, if appointed. We are committed to addressing these gaps and continuing to work with the industry to build our knowledge comprehensively.

5. We propose that Ofgem expands the accountability scope, viewing it as twofold: the accountability of the market facilitator to Ofgem and the accountability of market participants to the market facilitator.

Irrespective of the consultation’s outcome, we are confident that Elexon has a valuable role to play within local markets. We remain committed to supporting the Government, Ofgem, and industry in streamlining arrangements and making them more accessible for market participants.

Our goal is to facilitate the delivery of benefits not only for the energy system but also for end consumers.

Read our full response

Our full response to the consultation and supporting information is available below:

Elexon’s response to Ofgem’s Consultation on the Market facilitator delivery body

Key points

Read our full response

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