Enhancing and evolving our services to support industry changes and development of the energy market.
01 Wider Access to the Balancing Mechanism (BM)
Working with National Grid Electricity System Operator, Ofgem and the industry, we developed the solution for Wider Access to the BM for independent aggregators. This enables flexibility service providers 0to participate in the BM in their own right as a new type of BSC party (a Virtual Lead Party). Ofgem approved P344 in August 2019, concluding the two-year development phase. From December 2019, the BM was open to independent aggregators, which helped create a wider pool for provision of demand side response.
02 Market-Wide Half-Hourly Settlement (MHHS)
Working with Ofgem and the industry, we completed the design work on the MHHS Target Operating Model (TOM) and transition approach in August 2019 – to which Ofgem subsequently gave its preliminary approval in October 2019. This represented the culmination of two years’ collaboration with Ofgem, the Design Working Group and wider industry on this phase of work.
03 Enabling flexibility services and distribution network operator to distribution system operator transition
In November 2019, we published our Policy View: Setting up Electricity Flexibility Platforms. We proposed that nationwide ‘flexibility markets’ could be set up to operate in a similar way to the existing wholesale electricity market, where buyers and sellers can trade electricity or spare capacity at prices set by the market. We proposed action from the DNOs and Ofgem to bring this about and pledged our support. Flexibility platforms will facilitate more efficient network usage and fully realise the value of assets connected to the system. Figure 07 overleaf summarises our proposals.
Our focus is to provide more opportunities for demand-side response, to realise the benefits of smart meters, and achieve more efficient use of the electricity networks.
We see the BSC and the Elexon team as enablers to innovation in services and business models that will bring benefits to our customers, end consumers and society as a whole. Central market arrangements and systems will have a vital role to play in progress towards the net zero emissions target.
01 Modification P344 – Project TERRE
Enabling BSC Parties to start trading in the European
Market During 2020 we will be deploying the changes required for P344 Project TERRE (Trans European Replacement Reserves Exchange), which will enable GB market participants to trade in the European electricity markets.
We began work on implementing Project MARI (Manually Activated Reserves Initiative) in 2019/20. MARI is the project name for the second of the Electricity Balancing Guideline (EB GL) balancing products to be introduced to the GB market. While it may be similar to Project TERRE initially, this will be an entirely new pan-European balancing product. We will work with National Grid ESO to ensure future BSC modifications to enact MARI and meet BSC Parties’ needs. We plan to start working with industry through the Workgroup process in spring 2020 once National Grid ESO completes its initial preparations.
02 Leadership on future markets and settlement design
Market-wide Half-Hourly Settlement (MHHS)
We will continue to lead on Market-wide Half-Hourly Settlement. This follows Ofgem’s preliminary approval of the Target Operating Model (TOM) design, delivered by the Elexon-led Design Working Group (DWG). In November 2019, Ofgem launched the next phase for developing the industry code changes and system architecture needed to implement the TOM. This includes establishing two new industry working groups: the Code Change and Development Group and the Architecture Working Group. Elexon will chair these groups, provide technical leadership and work closely with Ofgem, industry and other codes throughout 2020/21.
03 Enabling new paradigms in the energy sector
Multiple Providers through Meter Splitting (P379)
BSC Modification P379 will enable multiple suppliers to provide energy to the same consumer via a single meter (for example, where a customer has a domestic supplier, but has electricity for their electric vehicle provided as part of the EV leasing arrangements). The Modification was raised following an Elexon Policy View, where we articulated how this could be enabled. The Modification will facilitate non-traditional business models and innovation through the simplification of current meter splitting arrangements and the creation of a new Party Agent role, the Customer Notification Agent (CNA). During 2020/21, we will continue guiding the P379 workgroup in exploring the issue and developing the solution.
‘Behind the meter’ resources (P375)
The high proportion of renewable generation and volatile changes in demand patterns increase the need for the electricity system to be flexible. BSC Modification P375 proposes to settle Secondary Balancing Mechanism Units using metering equipment behind the defined Boundary Point for Balancing Services. This is instead of the current practice of using metering equipment at the Boundary Point.
Enabling ‘behind the meter’ equipment to input data into Settlement is a pre-requisite for a number of future innovative business models and charging structures, which require more granular data. P375 facilitates this by creating a new register of asset meters, associated code of compliance, data flows, and a new Settlement process.
This will allow balancing-related services on site to be separated from imbalancerelated activities, more accurately reflecting the balancing-energy volumes provided by the Balancing Service Provider. During 2020/21, we will support and guide the P375 workgroup summarising the proposed solution into an assessment report at the end of the process.
Electricity market sandbox (P362)
As the BSC sandbox begins operations, we will improve market access for innovators by demonstrating changes on a small scale and using the learnings to inform future BSC modifications.
04 DNO to DSO Transition
Building on our Elexon Policy View: Setting up Electricity Flexibility Platforms, we will work together with Ofgem, DNOs, Energy Networks Association (ENA) Open Networks project and any interested parties to further develop our initial ideas on achieving the DNO to DSO transition, and enabling local energy markets.
We will be working with winners of the BEIS FleX competition to trial flexibility markets during 2020/21. We will be offering support on how these trial projects can interact with Settlement and the central market arrangements.