The CACM Regulation is a central component of the Internal Energy Market, as set out in the EU Third Energy Package. It aims to maximise the efficient use of interconnection and facilitate greater cross-border electricity trade. It seeks to do this by introducing rules for market coupling and providing the legal framework for a single, modern and more efficient capacity allocation and congestion management system in both the day-ahead and intraday timeframe. Market coupling should ensure that power is produced where it is most efficient and transported to areas of consumption where it is most valued.
In March 2017, we consulted on our proposed approach to cost recovery in relation to the CACM Regulation. We have taken responses to that consultation into account in formulating our revised proposals and also further engaged with relevant industry parties.
This consultation sets out our updated minded-to position with respect to how costs related to the CACM Regulation should be shared between relevant parties and the appropriate mechanism for recovery of such costs in GB. We welcome comments on the proposals set out in this letter from all interested parties.