NESO is considering alternative arrangements to effectively manage constraints and interconnector flows. This project will consider the current NTC arrangements, assess the feasibility of an NTC market and explore the potential to systematically extend the use of trades, from interconnectors to a greater number of generators.

The project findings could offer NESO a route to procure NTCs through a competitive market and provide insights into potential efficiencies and cost savings compared to the current arrangements. 

Benefits

This project will deliver valuable insights into the drivers, benefits, and drawbacks of current NTC arrangements, providing a foundation for more efficient and cost-effective solutions. Key benefits include:

 1.        Enhanced Market Efficiency – By assessing the feasibility of a market-based approach for setting NTC restrictions, including high-level design (e.g., auction processes), fallback mechanisms, and cost-benefit analysis, this project could lead to the development of a competitive and more effective NTC market.

 2.        Reduced Reliance on NTCs – Through qualitative and cost-benefit analysis, the project will evaluate alternative approaches that minimize dependence on NTC restrictions, potentially improving system flexibility and resilience.

The final report will present actionable recommendations, supporting more efficient market-based solutions and/or reducing reliance on NTC restrictions