Chief Executive Officer
2020 was been one of the most challenging years that the energy sector and the wider economy have ever faced. Despite these difficult days, our industry continues to rapidly evolve, experiencing its longest ever period for coal-free electricity generation of 67 days, almost quadrupling the previous record from May 2019.
However, Elexon’s key priority has not changed. As trusted independent experts, we must carry on delivering our Balancing and Settlement Code (BSC) ‘end-to-end’ management services to our historic high standards, whilst always providing value for money. Our 2020 customer survey highlighted increased satisfaction with our adaptability, and the reliability of our services and we will strive to build on these to aid our customers.
To achieve these priorities it is essential we maintain our high levels of customer focus, invest in our systems and processes and ensure we retain and attract the necessary talent and skills. This 2021/2022 business plan details how we will work with our stakeholders to deliver on our priorities and act with the industry to facilitate a low carbon future.
Supporting progress to net zero is of utmost importance to us. We have reflected this when developing a new corporate purpose: ‘Serving at the heart of the energy industry, building a path to net zero’. You will find many examples in the business plan of how we are enabling innovation for the benefit of consumers and facilitating the changes needed to support the energy transition. We continue to make the case for consolidation and simplification of energy codes and the central market landscape to help deliver the transition.
The 2021/22 budget is broken down later in this business plan. As we always do, we have taken a prudent view of what we need to run the business and invest in necessary systems upgrades. However this year our focus is evermore acute, as we fully recognise the pressures faced by our customers.
In 2020/21 we served more BSC Parties, progressed more Modifications and Workgroup meetings, delivered significant changes to systems and concluded a complete review of our Performance Assurance regime. All the indications show this increasing demand for our services will continue into 2021/22. However, despite this, after taking into account indexation and inflation, our regular activity shows a decrease of £0.4m (1.0%) against the 2020/21 budget, and with our headcount almost unchanged.
Our existing systems rely on ageing architecture that has been in place for many years. The industry has benefitted from our approach to prolong the life of those assets for as long as possible. However, in the face of the enormous volume and complexity of change that is increasingly required, it is not sustainable or wise to sweat the use of them for much longer into the future. That is why we embarked on our investment programme two years ago.
There is a window of opportunity in 2021/22 for us to continue the investment necessary to deliver our new digital plaform ‘Elexon Kinnect’. This will reduce the risk of performance of the existing systems deteriorating and being unable to adapt to meet future challenges, which could impact on Settlement accuracy and stability. It will also pave the way for future market changes such as Market-wide Half Hourly Settlement (MHH Settlement). This is leading to a £12.5m increase in the Projects and Investments part of our budget for 2021/22.