CMP433: Optimised Transmission Investment Cost model (OpTIC)
What is being proposed
OpTIC replaces the Transport component of the Transport and Tariff (T&T) model with an economic market model that reflects proposed network investment, creating charges that aim to leave a market participant in the expected position that they would have been in had they been operating in a zonal wholesale market with assumed optimal network investment
Current status
Proposal issued to April 2024 CUSC Panel. The April 2024 CUSC Panel unanimously agreed that CMP433 should follow the Standard Governance route and proceed to a Workgroup. The Panel did not approve the Terms of Reference for the Workgroup. Workgroup Nominations were issued on 13 May 2024 and closed on the 04 June 2024. October 2024 CUSC Panel prioritised as Medium, therefore Workgroup activity will start from Spring 2025. Workgroup nominations were re-opened to recruit additional Workgroup members and observers. This will run from 13 January to 3 February. (18/02/2025) On 14 February 2025 at the Special CUSC Panel the Panel discussed, at length and in detail, the prioritisation of CUSC Modifications. The CUSC Panel agreed there was no change to this modification status.
Details
Timeline
Analysis
OpTIC replaces the Transport component of TNUoS with an economic market model that creates transmission charges based on assumed optimal network investment in a zonal market structure. The proposal aims to charge generators and suppliers as if they operated in a zonal wholesale market rather than the current uniform pricing system. Workgroup activity starts Spring 2025 after the CUSC Panel prioritised it as Medium.
Why it matters
This represents a fundamental shift toward locational pricing signals without implementing full zonal markets — essentially charging participants for transmission constraints while maintaining uniform energy prices. The approach creates regulatory complexity by simulating market outcomes rather than allowing actual price discovery, potentially favouring incumbents who can navigate the modelling assumptions.
Key facts
- •Replaces Transport component of T&T model with economic market simulation
- •CUSC Panel unanimously approved Standard Governance route in April 2024
- •Prioritised as Medium by October 2024 CUSC Panel
- •Workgroup nominations reopened January-February 2025
- •High impact on Suppliers, Generators and Demand customers