Paragraph 6 Capacity provider penalty charges: calculation of monthly penalty charge for a capacity committed CMU

(1)

The Settlement Body must, after the end of each month of a delivery year (“year X”) in which one or more relevant settlement periods occur (“month M”), calculate for each relevant CMU (“CMU i”) the monthly penalty charge to be paid in respect of month M (“ $S P P S A_{i m}$ ”).

(2)

For the purpose of sub-paragraph (1), the Settlement Body must perform both of the calculations in sub-paragraphs (3) and (5), and $S P P S A_{i m}$ is equal to whichever is the lesser of the two amounts so calculated.

(3)

The first calculation is—

(\frac{S P_{i}}{M a x S P_{i}}) \times \min (M a x S P_{i}, M P C_{i m}) .

(4)

For the purpose of the first calculation, $M P C {}_{i m}$ is the monthly penalty cap in pounds applying to CMU i in respect of month M, and is to be calculated in accordance with the formula—

M P C_{i m} = 2 \times M C P_{i m} .

(5)

The second calculation is—

A P C_{i x} - \sum S P P S A_{i (m - 1)} .

(6)

In this paragraph—

“ $A P C_{i x}$ ” means the annual penalty cap in pounds applying to CMU i in respect of year X, as stated in the capacity market register;
“ $M a x S P_{i}$ ” is the sum in pounds of all settlement period penalties which would have applied to CMU i in respect of relevant settlement periods in month M, as calculated in accordance with paragraph 5, if $A E_{i j}$ had been 0 for all such settlement periods;
“ $M C P_{i m}$ ” means the amount of the monthly capacity payment calculated under paragraph 3 for CMU i and month M;
“relevant CMU” has the same meaning as in paragraph 5;
“ $S P_{i}$ ” is the sum of all settlement period penalties applying to CMU i in respect of relevant settlement periods in month M, as calculated in accordance with paragraph 5;
“ $\sum S P P S A_{i (m - 1)}$ ” means the sum of the monthly penalty charges paid or payable in respect of CMU i for each of the months of year X preceding month M.