We believe in the importance of evolving and developing with the changing energy landscape. We champion innovation to better our customers’ experience and reach targets and goals that will benefit everyone.
With the continued commitment to net zero emission targets, it is clear that the management of central market rules will have to change. We will continue to advocate that changes across code governance arrangements are necessary to ensure the GB energy system is more flexible and responsive. It will need to support new business models as well as existing participants to deliver net zero.
Elexon CEO, Mark Bygraves says:
“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.”
We will continue our-day-to day focus on BSC obligations in the most effective way possible. We will also look to streamline the customer experience and supply more open data and reporting methods.
We see the teams within Elexon as enablers of innovation in services and business models that will bring benefits to our customers, end consumers and society as a whole. Central BSC market arrangements and systems will have a vital role to play in our goal to deliver net zero. This will include opening up the market for new entrants, products and services and making it more flexible for everyone.
Close collaboration between all parties, industry, Government and Ofgem will be needed to deliver a ‘whole-system’ approach to facilitate changes such as the electrification of transport and heat. As a major central services provider, we will continue to offer our views and expertise on developing energy policy. We will also identify challenges and practical solutions to support the work of our stakeholders.
We offer comprehensive training and a bespoke support service that is tailored to the needs of our customers. Our support services are highly regarded by the industry. Our aim is to further digitalise the customer journey, based on mapping exercises to ensure that we place them at the forefront of our digital transformation.
Consolidation and Simplification
We back the consolidation and simplification of the energy codes.
This will make it easier for existing companies and new entrants to manage their interaction with the energy codes. Consolidating the codes will also make it easier to support innovation and changes to code rules, all of which is important for meeting net zero.
Business Plan 2020/21
Experience the interactive 2020/2021 Business Plan and:
- read forewords from CEO, Mark Bygraves and Chairman, Michael Gibbons
- view our strategic priorities
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How we're achieving our targets
Energy code review
We have been providing our views to The Department for Business, Energy and Industrial Strategy (BEIS) and Ofgem about how the 11 different energy code arrangements could be simplified.
Elexon has developed some options for discussion with the industry and Ofgem regarding how the Modification processes (the Change procedure used across the 11 energy codes) could be simplified, standardised and streamlined.
Immediate changes can be made to modification process before the wider consolidation reforms are introduced. The benefits to the Modification process include:
- Code modifications being developed that better meet the needs of the smarter energy system
- Speeding up the time it takes to develop, assess and consult on proposals
- Reducing the burden on market participants of getting involved in the change process
We already support plans to consolidate and reform the energy code arrangements, as suggested by BEIS and Ofgem.
- Insight: Code Governance Review
- Policy View: A faster, more consistent process for changing energy codes
Introducing new electricity markets
TERRE (Trans European Replacement Reserves Exchange) is a pan-European market for trading reserve electricity. Through TERRE, operators of the high voltage networks TSOs (Transmission System Operators) in the participating countries will be able buy reserve electricity in this new market. This includes National Grid Electricity System Operator. The new platform will create a more neutral basis for market participants.
Using our influence and expertise in adapting the BSC helped drive innovation and improvements. GB participation in TERRE is expected later in 2020 and the initiative could save millions per year for TSOs.
We have been working closely with National Grid ESO on Project TERRE.
Delivering Project TERRE is a major step forward for meeting the European Electricity Balancing Guideline mandate, which increases harmonisation of European electricity markets.
Opening up the electricity market
Wider Access is the term used to describe the opening up of Britain’s Balancing Mechanism (BM) to independent aggregators – also known as VLPs (Virtual Lead Parties). A VLP is basically a company which negotiates with energy suppliers or network companies on behalf of consumers.
Wider Access is an important development on the road to a smarter electricity system. VLPs can help consumers, owners of small generation units, battery storage and other market participants to provide more demand-side response. It’s likely that VLPs will play a bigger role in the electricity system in the future. Consumers will be paid for deviating their consumption when a gap between supply and demand exists.
Opening up the market and allowing wider access for market participation will help drive down costs for consumers.
Facilitating demand-side response
The Manually Activated Reserve Initiative (MARI) is the pan-European project to deliver a platform for manually-activated Frequency Restoration Reserve (mFRR).
MARI is a new balancing product that facilitates the participation of demand-side response. This will allow non-traditional Parties, such as Aggregators, to compete on a level playing field, much like TERRE.
This new product will increase competition and will enable Great Britain to be part of harmonised approach to energy across Europe. It will also allow users to participate and support target for renewable penetration.
Quicker settlement for customers
Smart electricity meters, which provide Suppliers with remote readings for each half hour in the day, are now more widely available. So there is now a strong case for moving to Market-wide Half Hourly Settlement (MHHS).
Remote meter readings removes the current need to wait several months for meters to be physically read. It also gives suppliers and settlement a more accurate picture of consumers’ energy use compared to traditional domestic meters. Less frequent readings have to be converted into half-hourly consumption for settlement using ‘profiles’ of typical consumption patterns.
The benefits to customers is a faster and more accurate settlement. The electricity consumption of all consumers across GB for each half hour of the day can be more quickly retrieved and fed into the Settlement process, avoiding the need to initially estimate consumers’ energy use while waiting for meters to be read. As a result settlement can be completed within 4 months, instead of the current 14. MHHS also has wider benefits. It will encourage Suppliers to provide a wider use of ‘time-of-use’ tariffs, which reward customers for shifting their energy use to off-peak demand periods.
Consumers will also see increased opportunities to be paid to increase their electricity consumption when they are asked to by network companies or Suppliers).
Ofgem estimates that the total net benefits of MHHS for GB consumers of between £1.6bn to £4.5bn over 25 years to 2045.
Updating BSC services
Elexon Kinnect is a new digital platform that will enhance Balancing and Settlement services. Elexon Kinnect is a flexible and scalable digital platform that is built on modern architecture. The platform will deliver three main functions:
- Customer Solution
- Settlement Solution
- Insights Solution
these will allow BSC Parties to self-manage their own accounts and gain insights from BSC and BMRS data.
Once completed, our digital platform will enable us to reduce the time and cost for industry and BSC Parties by simplifying the Change process.
We undergoing this large scale digital development to enable us to accommodate our customers’ future needs. It is also in response to the changes and transformation impacting the industry, such as decarbonisation, decentralisation and digitalisation, which are some elements that are currently reshaping the electricity industry.