Elexon is consulting on proposed changes to the Balancing and Settlement Code (BSC) that would allow individual asset meters to be used for settlement purposes, widening the Balancing Mechanism (BM) once again.
As it stands, the BSC doesn’t recognise these types of meters, which measure electricity flows to or from assets which include embedded generators, demand-side response providers and owners of electric vehicle (EV) charging points, as only data from meters at the boundary point – the location at which multi-use sites connect to the distribution network – can be used for electricity settlement.
The modification to the BSC – P375 Settlement of Secondary BM Units using metering at the asset – would therefore allow data from meters beyond that boundary point used. It was raised by Flexitricity, with founder and chief strategy officer Alastair Martin explaining that while the Balancing Mechanism has been widened due to the introduction of Virtual Lead Parties (VLP), “it’s asset metering that really pushes the door wide open”.
Flexitricity became the first VLP to trade in the BM in April following National Grid ESO and Elexon opening up the mechanism in December. Prior to this, VLPs – independent aggregators – couldn’t participate in the BM unless they had a supply licence, however this has now been changed in the Wider Access reforms.
The new proposed changed could help VLPs due to it allowing them to obtain accurate information about the activity of assets behind the boundary point, as well as meaning the VLPs could help asset owners to provide services in the BM through the Wider Access reforms.
Elexon said the change would offer "more opportunities for smaller asset owners to provide balancing services", as well as give distribution system operators (DSOs) more accurate control of their networks, enabling them to dispatch assets with more efficiency.
“The P375 proposals could have a transformative effect on the energy system. They offer market participants new ways to engage in the energy market. The changes could also assist developers of heat networks as part of a wider integrated energy system," Mark Bygraves, Elexon’s chief executive, said.
“If the proposals are approved by Ofgem they will ensure that the BSC is ahead of the game. We need the BSC to facilitate the changes that support innovation and initiatives to meet the net zero challenge."