BSCCo Business Plan 2019/2020

Forewords

Chief Executive’s foreword
to BSCCo Business Plan

We promise to continue to deliver our ‘best in class’ business-as-usual services, as well as embracing our drive and commitment to support our customers

I have the immense privilege of leading Elexon, an organisation full of highly-regarded, highly-skilled market experts, as the energy market continues to change at an ever increasing speed.

This is seen in the number of new entrants, and new products and services being introduced in the industry as it evolves. These new products and services range from home batteries to time-of-use tariffs; from smart meters to new demand side aggregation services; from electric vehicles to vehicle to grid (V2G) services; all promise to provide more choice for consumers than ever before.

We see it as our number one priority to support you through these changes. In fact, we have already suggested a number of practical solutions to open up the Balancing Mechanism to new market participants and to enable consumers to have multiple energy providers.

We are determined to evolve along with the industry, maintaining and improving our historically high standards of service, retaining and attracting talented colleagues and delivering to our customers’ needs.

However, despite the high levels of customer satisfaction demonstrated in Ofgem’s and our own surveys, we are not complacent and we continuously look at areas where we can improve, be that our website or our underlying systems.

But we also believe improvements can be made beyond the Balancing and Settlement Code (BSC). And our view is that the central services landscape is too fragmented and complex and that this can be confusing for new and existing market participants and, potentially, creates additional cost for consumers.

That is why our Corporate Strategy clearly states:

With the support of our stakeholders and partners, simplify and consolidate complex and fragmented services, develop new market solutions and actively facilitate innovation for the benefit of GB energy markets and the UK economy.

Our 2019/20 BSCCo Business Plan supports this and we promise to continue to deliver our ‘best in class’ business-as-usual services, as well as embracing our drive and commitment to support our customers. During the year, we will proactively identify and implement the arrangements needed to support innovative consumer-facing solutions, as the energy industry continues to radically change and innovate.

Supporting consolidated central market arrangements

During 2019/20, we will continue to support the government’s Smart System and Flexibility Plan and fully participate in the BEIS/Ofgem review into codes and code governance.

However, we strongly believe it is only by simplifying and consolidating central market arrangements, sharing best practice and streamlining processes to enable wider participation from smaller, newer organisations and speed up existing change processes that we will provide a cost effective way of unlocking the benefits to the end consumer, while still maintaining the need for rigorous assurance in arrangements.

We will lead, drive and deliver new opportunities for customers and industry participants in markets that weren’t previously open to them.

We will share ELEXON’s breadth of knowledge and our well-established processes and governance along with our standards of service, with the Energy Codes Review team and apply them to any new arrangements.

To that end, our 2019/20 Business Plan demonstrates how we will lead, drive and deliver new opportunities for customers and industry participants in markets that weren’t previously open to them, including aggregators, electric vehicles, storage and value that can be obtained from smart meters.

Creating a digital platform to meet the changing energy market

During the year, we will continue to invest in our systems to deliver a flexible, scalable and open platform providing settlement and other value-added services to meet the future needs of a rapidly changing energy market.

By working collaboratively with BSC Parties and other key stakeholders across the industry, we will shape and design improved processes and customer interfaces that are for the benefit of the market.

In the next few years, we are committed to transform and transition the current ageing BSC central systems to a modern technology platform that will be easier to maintain, mitigate the risks of failure and deliver better value for money to our customers, as well as greater flexibility for future market requirements.

Supporting our customers now and in the future

During the year, we will continue to develop solutions that support regulatory and government policy that benefit you. We take our role as trusted, independent, reliable market experts seriously and our 2019/20 BSCCo Business Plan sets out how we will support you now and in the future.

2019/20 BSC Budget

We are now serving more Parties than ever before, supporting many more new entrants and smaller organisations, consulting on more Modifications and Change Proposals, processing more Trading Disputes, Defaults and Supplier of Last Resort (SoLR) events, responding to more industry consultations and leading more market initiatives. We are also faced with reviews of the supplier hub, supplier licensing and now a once in a generation review of codes and code governance.

At the same time we will be implementing Market-Wide Half-Hourly Settlement and making changes to our systems and process to deliver TERRE, the largest system change since NETA, and opening the Balancing Mechanism to more and smaller players.

Additionally we are leveraging those TERRE changes, which are mandatory, to redevelop our core systems in response to market transformation to make sure we can support you during the year, continuing to deliver our best-in-class service that you appreciate so highly.

That is why, as you will see from the Budget section of this Business Plan, we have had to make a proportionate increase to our budget for 2019/20.

I welcome your comments and look forward to working with you and your businesses over the coming year.

Mark Bygraves
Chief Executive Officer

Chairman’s foreword to
BSCCo Business Plan

Enabling innovation

It is an honour to chair ELEXON and the BSC Panel at a time when we find ourselves near the centre of so many important changes in the energy industry. Moreover, I believe that we have already demonstrated considerable leadership for the benefit of the industry and its consumers in several key areas, notably:

  • Half Hourly Settlement (HHS), which could expand the uses and importance of the smart meter roll-out
  • the setting up of a regulatory sandbox to encourage innovation; to date the BSC is the only code to do so
  • our proposal to facilitate electricity customers having more than one supplier.
  • All these initiatives, and others, show that we have fully engaged with the need to enable innovation in our industry.

All these initiatives, and others, show that we have fully engaged with the need to enable innovation in our industry.

Welcome the Review of Code and Code Governance

But we are conscious that the BSC is only a part, albeit an important one, of the central systems that run the energy industry, and that there is a real, and urgent, need to ensure better coordination with the other codes.

I am sure we could also all operate more simply and more quickly. That is why ELEXON strongly welcomes the review recently announced by BEIS/Ofgem into codes and code governance, and we look forward to helping to develop and implement firm proposals that deliver these aims.

I congratulate the Executive Team and staff here at ELEXON on their leading performance, again, in the Ofgem’s code administors’ performanace survey, and I feel that such a result should enable our role in the review to be well respected.

The Board’s agreement on a new ELEXON Strategy in the middle of the year was very important for us. At its heart is the commitment to innovation and to a new, agile, flexible platform to deliver it. Our aspirations for the future rest on the wish to drive and share best practice across the energy industry in all we do.

BSC Panel and ELEXON’s Board – a range of diverse experience

As Chairman of both ELEXON and the BSC Panel, I am especially pleased that the relationship between the two is based on mutual respect between two high performing bodies.

The BSC Panel model is frequently cited as one of the better models for ensuring broad representation of stakeholders (including as it does Citizens Advice and other non-industry appointees) and independence of decision making. I was pleased to welcome two new members to the Panel last year:

  • Lisa Waters, who brings a wealth of experience and understanding of the challenges faced by both BSC Parties, as well as those outside of the BSC: small generators, storage operators, and prosumers, who are shaping the future of the energy markets; and
  • Mark Bellman, who brings profound knowledge and experience in energy settlement both from operational and financial perspectives and expertise in gas markets.

Coinciding with these appointments, Andy Knowles and Barbara Vest have departed and I am grateful to them for their service on the BSC Panel.

I highlight particularly Barbara Vest’s extraordinarily long standing commitment to the BSC

We will welcome two new members to the ELEXON Board and they will replace Volker Beckers and Alison Chappell and I would like to thank both Volker and Alison for their relentless drive and focus in directing ELEXON’s efforts to serve the energy industry and consumers.

I am certain these new appointments will maintain ELEXON’s focus and contributions to the new more consumer focused, smart and flexible energy system.

Michael Gibbons, CBE
Chairman