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<p>Under their Electricity Balancing Significant Code Review, Ofgem have committed
to implementing a move to a 1MWh Price Average Reference (PAR) measure by 2018/19,
the first delivery year by the Capacity Market:</p><p><a href="https://www.ofgem.gov.uk/ofgem-publications/87782/electricitybalancingsignificantcodereview-finalpolicydecision.pdf"
target="_blank">https://www.ofgem.gov.uk/ofgem-publications/87782/electricitybalancingsignificantcodereview-finalpolicydecision.pdf</a>.</p><p>It
is therefore expected that this modification has been already factored into Capacity
Market auction bids, by current and potential future participants.</p><p>Other things
being equal, a more cost-reflective wholesale electricity price would be expected
to lower bids in the CM; greater revenues earned through the electricity market would
offset revenues sought via the Capacity Market. Please see Ofgem’s Impact Assessment
on implementation of EBSCR changes for further details:</p><p><a href="https://www.ofgem.gov.uk/ofgem-publications/87787/electricitybalancingsignificantcodereview-finalpolicydecisionimpactassessment.pdf"
target="_blank">https://www.ofgem.gov.uk/ofgem-publications/87787/electricitybalancingsignificantcodereview-finalpolicydecisionimpactassessment.pdf</a>.</p>
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