EMR Delivery Body Contract for Difference – December 2016

Agenda Overview of the EMR Delivery Body (DB) Our Role Who we are About the Allocation Process Process Overview Pre-Application & Registration Application Qualification Assessment Reviews & Appeals Valuation Auction and CFD Notification Update on the CfD Systems

The DB Role Systems Development Market Analysis Run Registration, Qualification & Auctions Administer Agreements – (CM only) Support DECC Policy Development Support Applicants Round readiness Develop enduring EMR systems Annual systems changes to reflect policy changes (CfD) Strike Price Analysis and Recommendation (CM) Capacity to Procure Market Analysis Systems Development Administer CM &CFD Customer & Stakeholder Engagement EMR is ring-fenced within the System Operator function in National Grid

The team… Anna Holleron Charlotte Watts Paul Mullen Nisar Ahmed EMR Analyst Anna Holleron Charlotte Watts EMR Delivery Manager Paul Mullen Senior EMR Analyst Nisar Ahmed Ben Smith Mark Baker CfD Manager Yasharn Smith Arjun Mukkara

About the Allocation Process

Allocation Process Overview Registration & Pre-Application Application & Qualification Allocation & Notification 1 1 1 Applicants Register Apply Request Review Request Appeal Submit Sealed Bids Sign Contract Supply Chain approval Round Variation / Budget Revision Notices Qualified Applicants Run Auction & Allocate Assess Eligibility Register Applicants Review Appeal RO Check Minor & Necessary Agreement Contract Management

Pre-application System Registration Supply Chain Plan (if >= 300MW) Minor and Necessary

Application Submission April 2017 Application Window Applicants can create, save, submit, withdraw and re-submit applications 3, April 2017 Application Window opens 21, April 2017 Application Window closes Date to be confirmed by Allocation Round Notice Only submitted applications will be taken forward to qualification assessment

Key Qualification Criteria Connection Agreement/Countersigned Offer/Signed Offer Acceptance Planning Decision Notice Supply Chain Approval Certificate if >=300MW Declarations that not in receipt of other subsidies Evidence of Incorporation Target Commissioning Date within Target Commissioning Window Crown Estate Agreement to Lease/Lease if Offshore Offshore capacity requirements Application Form to include technology, contact details, location, capacity and target dates

Valuation Formula X X X Top-Up Payment General conversion factors Strike Price minus Reference Price Top-Up Payment e.g. Transmission losses, hours to years Will be set out in Allocation Framework General conversion factors e.g. Load factors Technology Specific Factors Provided by Applicant Capacity X X X

Valuation The DB must determine the Applications Valuations in respect of each of the delivery years (DY) specified in the Budget Notice, this is done using the valuation formula. Budget Impact Delivery Year - 1 2021/2022 Delivery Year - 2 2022/23 £60m £120m £180m £240m £300m Budget line Application 1 Application 3 Application 4 Application 2 The DB determines if the valuation of qualified applications exceed the Budget and if yes an Auction is triggered…

CfD Auction – Overview Step 1 Check if Auction is required. If yes, applicants notified to submit Sealed bids Step 2 Run Allocation/ Auction Step 3 Independent Audit of DB Calculations Step 4 SoS reviews; Proceed, Re-run or Cancel Allocation Process. Step 5 DB CfD Notifications : (LCCC & Applicants)

CFD Notifications Following the CfD Auction the DB issues notification to Applicants: Notification information include: Auction Outcome Whether or not the applicant was successful in securing a CfD If successful, notifications will include: CfD Strike Price awarded Successful Allocation Capacity Target Commissioning Date The information of successful applications will also be shared with the LCCC

CfD Systems

Systems Update Web Based System Validation to support Applicants 2 Factor Authentication process Registration opens prior to opening of Application window, date TBC User guides will be provided 1-2-1 System training will be provided to applicants

Register for DB 1-2-1 Who: CfD Applicants (April 2017) When: Throughout February & March 2017 Where: DB Offices (Midlands, London) or Applicants Offices Why : Support Applicants to submit applications ‘Right first Time’ Deep dive on qualification rules, & using the CfD system Free! & Confidential First come first served! Register your interest with anyone from National Grid

Thank You & Questions