Market Monitoring
Why is market monitoring needed?
The National Energy System Operator (NESO) has a licence obligation (C1.5(c)) to actively monitor balancing services markets for any breaches of REMIT, the Grid Code, and other market rules, such as the Transmission Constraint Licence Condition (TCLC) and the Inflexible Offer Licence Condition (IOLC). To fulfil this role, the Market Monitoring Team was established as a ringfenced area within NESO. Below are some statistics on the work we do:
The market monitoring team
Our team is engaged in continuous oversight of electricity market activities to identify and address potential non-compliance issues. We work to ensure transparency and integrity within the market by analysing market data and trends. This is achieved through sophisticated in-house tools, reports from market participants, and insights from internal colleagues within NESO. These resources enable us to detect suspicious activities in the wholesale energy market effectively.
Consequently, we provide valuable insights and recommendations aimed at enhancing market efficiency and reducing the costs associated with balancing electricity markets. One of our key initiatives includes developing guidance on enhancing PN accuracy among market participants.
Our primary stakeholder is Ofgem, who implement decisions based on the investigations we conduct. Our role involves sharing our findings with them through detailed reports, enabling them to take appropriate action. In addition to engaging with Ofgem, we also collaborate with the Department for Energy Security and Net Zero (DESNZ)
We are focused on ensuring the best possible customer support on market rule compliance queries, if you spot anything that you would like us to investigate or would like any support in understanding your own obligations please contact us on [email protected]
Work to Improve Information Accuracy
Since October 2023, we have been undertaking work to quantify the scale of the inaccuracy of certain information submitted to us. There are several information inaccuracies that we have identified that create additional challenges for us in balancing the GB electricity system. In some cases, inaccurate information can lead to greater Balancing Costs being incurred, but more accurate information can also help us balance the system and maintain system security more effectively.
As of August 2024, the PN accuracy project has achieved substantial progress, notably in reducing both the net and absolute errors associated with wind BMUs. This improvement has contributed to more efficient system balancing and has enhanced our capability to ensure system security.
View the ACER guidance on application on REMIT - View ACER guidance
View Ofgem policy on REMIT - View policy
For any queries or concerns, please reach out to the Ofgem market conduct team on [email protected]