The Financial Transmission Rights (FTR) market is settled using Loss and Constraint Excess (LCE) and auction income
The FTR manager is required to calculate the amount of LCE to be allocated to FTRs in accordance with Schedule 14.3. The FTR LCE allocation calculation is complex. It requires specialist software that is costly to upgrade and maintain.
Since shifting to an eight-hub FTR market in June 2018, on average 90% of LCE is available for settlement of FTRs. However, the amount of LCE required to settle the FTR market is almost always less than the LCE made available.
We're proposing to revoke Schedule 14.3 of the Electricity Industry Participation Code 2010 (Code) and make consequential amendments to clause 14.16 and 14.20 of the Code so that all LCE is available for the settlement of the FTR market.