Winter energy and capacity margins review 2017/2018
In its 2017/18 work programme the Authority committed to a review of the winter energy margin (WEM) and winter capacity margin (WCM) security of supply standards.
These standards are key parts of the framework for monitoring medium-term security of supply. They assess what an efficient level of generation surplus would be to minimise the sum of the costs of providing generation, plus the costs to consumers from outages caused by insufficient generation being available.
The WEM is measured against the aggregate demand for electricity over winter. The WCM is measured against the peak demands for electricity that occur during winter. The standards were last reviewed and amended in 2012.
The completed review showed that some changes to the security of supply standards may be warranted. However, the benefits of amending the standards at this time are limited because the effect of any potential amendments would be minor.
To reduce the regulatory burden on stakeholders we will not propose any changes at this time or issue a paper for consultation.
We do however intend to review the standards again sooner than the regular five-yearly period. We have made improvements to our modelling tools to make it easier to undertake more frequent reviews.