Elexon has implemented a rule change which will help larger electricity storage facilities by reducing the financial exposure they face under the arrangements for settling supply and demand imbalances.
Storage owners face unexpected charges if unit’s status ‘flips’
The Balancing and Settlement Code, which Elexon manages, mandates that each Balancing Mechanism unit (BMU) must have either a Production or Consumption status to ensure accurate allocation of energy flows.
Storage units by their nature can switch between importing (Consumption) and exporting (Production). If a storage unit’s status flips unexpectedly, it can result in operators being unable to fulfil agreed electricity contracts, leading to unexpected imbalance charges and a potential impact on system balancing.
Storage units with a capacity of less than 50MW can either be registered in the Supplier Volume Allocation market with a fixed status of ‘Consumption’, or they can be registered in the Central Volume Allocation market* as an individual BMU and flagged as licence exempt. This in turn allowed them to fix their status as either ‘Consumption’ or ‘Production’, preventing the BMU ‘flipping’ between statuses.
Storage units with a capacity of greater than 50MW are normally licensed, meaning that until now they have not been permitted to set their Production or Consumption status, like the smaller units.
P475 gives control to storage owners so they can set a unit’s status
However, on 10 December, Elexon implemented BSC Modification P475 ‘Allowing All Storage Sites to set and fix their own Production/Consumption Flags’. Operators of storage BMUs can now set their Production and Consumption status themselves, therefore helping them to avoid unexpected imbalance charges.
Elexon is delivering changes quickly to support flexibility providers
Elexon Chief Executive, Peter Stanley, said: “To reach the Clean Power 2030 target there will need to be a major increase in flexibility provision and that includes the development of more larger capacity storage facilities.
“There is an urgent need to deliver rule changes quickly, and Elexon working with the industry to implement P475 in around six months is an example of the speed at which we need to move to support participants.”
Bringing forwarding implementation of P475
P475 was proposed in June 2024, and in September 2024, Ofgem approved it for implementation in February 2025.
Since September, Elexon worked with its third-party technology suppliers to bring forward the implementation date to 10 December, so that storage operators can benefit from the change earlier.
Ofgem approved the earlier implementation date on 6 December.
*The Supplier Volume Allocation is used to determine the amount of electricity used by each supplier’s customer base during any given Settlement period. The Central Volume Allocation is the process for determining how much electricity is used by customers or generated by producers that are directly connected to the electricity transmission system.