Chief Executive’s foreword
to BSCCo Business Plan
By 2025 we will create the leading provider of essential market services to the GB energy sector, for the benefit of market participants and their customers
A strategy to meet an evolving market as the UK moves to ‘net zero’
We know that the energy landscape is changing and the needs and demands of our customers and consumers are evolving, particularly as we face the challenge of achieving net-zero. The environment in which our customers operate is changing too, with significant regulatory interventions and commercial challenges. Our focus is on providing our new and existing services to our historical high standards while delivering value for money.
At Elexon, we are proud of being created by industry and charged with providing essential market services for its benefit. That is our purpose, our reason for being. We are therefore determined to support the industry in key ways and I make the following commitments to:
- provide our existing services to industry leading standards
- enable and support innovative consumerfacing solutions
- consolidate and simplify central market arrangements
- engage with our stakeholders and
- deliver a truly customer-centric service And we will carry out these commitments by:
- delivering value for money and transparency in our operations, building on our not-for-profit funding model
- providing a flexible, scalable and open digital platform to meet the needs of the changing energy market
- retaining, attracting and developing our expert resources to support our stakeholders
Both our vision and corporate strategy are based on these principles and I expand on these below.
Maintaining our services to industry leading standards
Our highly skilled, knowledgeable teams have an extensive understanding of the energy industry and we strive to maintain our role as trusted, independent reliable market experts. That is why we are delighted with your feedback through our own, and the regulator’s survey of customer satisfaction, which says we are continuing to meet our high standards of service and market expertise. As you would expect, we use those results to drive our focus for the forthcoming year, to further improve our services to you.
We recognise the energy market is changing so our experts have and will proactively strive to identify and implement improvements to market arrangements
Creating innovative consumer-facing solutions for you
We recognise the energy market is changing so our experts have and will strive to identify and implement improvements to market arrangements and will work with government, the regulator and industry to deliver solutions for the benefit of our customers and consumers. These solutions can enable the innovations and new products that will help to achieve net zero. These can take the form of further opening up access to our data, leading on the design of Market-wide Half-Hourly Settlement, enabling behind the meter activities or opening up the Balancing Mechanism to new and smaller providers. In short, we see our role as supporting parties centrally to reduce the burden on each of you.
Supporting consolidated central market arrangements
Current central market arrangements are criticised for being too complex and fragmented. That’s why we have been calling for increased cooperation to simplify, streamline and speed up the central industry processes and codes, as well as promoting the benefits of reducing the number of different central bodies, so that it is easier and cheaper for you to operate in the market. We also want to use Elexon’s breadth of services (such as performance assurance and robust governance) along with our high standards of service, to aid other central arrangements in the sector.
We want to understand your business more, so that we can develop our services to suit your needs and work with you to provide practical solutions to industry issues.
Delivering a truly customer-centric service
We pride ourselves in how we engage with the industry via our dedicated Operational Support Managers (OSMs) and other colleagues. Naturally we focus on existing BSC Parties who fund our services, but we also support the Parties of the future to help them understand the market. Innovation and new services are being created by existing and new market participants and with our end-to-end model of governance services, administration, operations, delivery and support, we help to shape and implement industry change. We also fully explain these changes to the Parties.
Value for money and transparency
Our not-for-profit funding model allows us to focus on customer needs rather than our own returns. Our funding model, together with the transparency of our costs and our focus on value for money over cost minimisation provides great benefits to Parties. We believe that this drives our high customer survey scores. Notably, this year we achieved our best ever results for value for money.
Creating a digital platform to meet the changing energy market
We are determined to ensure that our systems and processes facilitate the changes needed in the energy sector to achieve net zero. That is why we have been investing to enhance those systems to deliver a flexible digital platform which is cloud-based and scalable to meet the needs of the evolving energy market. This will also mean we can reduce the time and cost of future changes by simplifying the implementation process for changes to the BSC.
Investing in our people
We are proud of our reputation for professionalism and expertise (as borne out by our customer survey results) and therefore retaining and developing our people is key, along with attracting new colleagues. This is increasingly important as our customers are under significant cost pressures which can result in reduced engagement with our change processes. We therefore need to be able to use our expertise to develop solutions for industry.
2020/21 BSC Budget
We are committed to both efficiency and transparency in our operations and delivering more of a value added service to our customers, who are facing unprecedented challenges. With industry’s support, we have taken on more responsibilities, such as cost recovery of the radio teleswitching (RTS) infrastructure, enhancing the performance assurance processes, driving innovation and supporting ever-larger numbers of BSC Parties. Nonetheless, we have kept our proposed 2020/21 budget within 2.3% of that for 2019/20 (aside from the new, additional £1.4m RTS costs). At the same time, we have retained the headcount for BSC activities at the same level as budgeted for 2019/20.
2020/21 BSC Budget
When the 2020/21 budget is compared to our forecast for 2019/20, the majority of the difference can be attributed to the additional RTS costs, which did not exist in 2019/20, and the increased spend (compared to 2019/20) on our systems refresh (the Foundation Programme). On the latter, in 2019/20 we have had to prioritise regulatory changes, such as Project TERRE (Trans European Replacement Reserves Exchange) over the systems strategy work, resulting in us underspending our 2019/20 budget. However for 2020/21 we are budgeting to spend at the level that we set out in last year’s business plan.
Supporting our customers now and in the future
The energy market is undergoing unprecedented change and we fully recognise the pressures that our customers are under, including regulatory interventions such as the retail price cap and smart meter rollout. Therefore, we believe that it is more important than ever for Elexon to remain a trusted, independent reliable market expert that is here to help you. We will step up our support to you, our customers, in delivering the challenges of net zero and I look forward to continuing to work closely with you in 2020 and beyond.
Chief Executive Officer