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New to the Electricity Industry?
If you're new to the electricity industry, it can be a challenge to understand exactly
what ELEXON does!
Put simply, ELEXON administers the wholesale electricity balancing and settlement
arrangements for Great Britain. This affects all of Great Britain’s electricity
users, some 28 million customers, and the energy companies that generate and supply
the electricity. The documentation that governs these arrangements is known as the
Balancing and Settlement Code (BSC).
ELEXON has four main roles:
- Run the day to day settlement of wholesale electricity balance and imbalance
amounts. Like most commodities, electricity is produced, sold into
a wholesale market and then resold to consumers. Contracts are made for each half
hour between Generators who produce the electricity and Suppliers who sell it on
to commercial and domestic consumers. These contracts are notified into central
systems so that any difference between the amount of electricity contracted for
and delivered by Generators or sold on by Suppliers, must be bought or sold through
the systems managed by ELEXON. ELEXON manages this process and arranges for debts
and credits to be cleared for each day.
These systems capture data on the electricity generated and supplied across Great
Britain, with most of the work performed by agents contracted by ELEXON (BSC Agents).
It is ELEXON’s job to manage these agents so that they deliver a seamless service
to ELEXON’s customers: the electricity industry. If its still unclear don’t worry
– we run an
Introduction Seminar for industry
new-comers, which will help you understand some of the technicalities of
ELEXON and the electricity industry. Look on the Events section of
www.elexon.co.uk.
National Grid's website also has general information on the electricity
industry:
www.nationalgrid.co.uk.
- Manage changes to the systems and processes of settlement. This
ranges from changes to the BSC documentation, to extensive changes to systems and
processes operated by BSC Agents. There are two types of change that can be raised:
Modification Proposals which impact the BSC and Change Proposals which impact the
subsidiary documentation, systems and processes.
When a BSC Party suggests a change to the BSC, ELEXON works with industry representatives
on Modification Groups to assess the impact. This work is overseen by the BSC Panel.
The electricity regulator, Ofgem, has the final say over whether changes to the
BSC are implemented or not, and any approved changes are then implemented by ELEXON.
The Industry can also raise Change Proposals which are assessed by ELEXON in consultation
with the industry and BSC Agents. Panel Committees oversee the Change Proposal assessment
and approval process.
- Provide assurance that the BSC arrangements work. Companies in
the electricity industry rely on ELEXON’s systems and processes for significant
amounts of their costs / income and need to know that they work. The BSC and related
documents provide a set of obligations, including performance standards and targets
that BSC Parties, Party Agents and BSC Agents are required to adhere to. You can
read more on the
Performance Assurance Framework pages of www.elexon.co.uk. ELEXON provides
advice and guidance on the BSC and what parties should do to comply with it, and
suggests corrective actions where they are not complying. ELEXON also provides assurance
that other electricity companies are abiding by the rules set out in the BSC and
subsidiary documents.
- Support the governance arrangements as set out in the BSC. This
involves providing support and advice to the BSC Panel and BSC Panel Committees,
running committee meetings, sending out information for meetings, taking minutes,
chasing actions etc. This is a significant and time-consuming role!
As well as these main roles, ELEXON provides significant support to the industry.
ELEXON's Operational
Support Managers (OSMs) provide support to BSC Parties. ELEXON publishes
a weekly newsletter 'Newscast'
and other regular publications, as well as hosting
regular and ad hoc events to help facilitate industry debate and gather
feedback.
For more information on the electricity industry:
National Grid www.nationalgrid.com/uk/Electricity
Office of Gas and Electricity Markets www.ofgem.gov.uk
Department for Environment, Food and Rural Affairs
www.defra.gov.uk
Department for Business Enterprise and Regulatory Reform (BERR) www.berr.gov.uk/
National Consumer Council http://www.consumerdirect.gov.uk
Major Energy Users’ Council www.meuc.co.uk
Association of Electricity Producers www.aepuk.com
Renewable Energy Association www.r-p-a.org.uk
The Association of Meter Operators www.meteroperators.org.uk