Elexon CEO Mark Bygraves is confident that the P375 modification proposal will not be undone by those keen to maintain the status quo within balancing services.
The firm is consulting on proposals to change the Balancing and Settlement Code (BSC) so that individual asset meters located ‘behind the boundary point’ can be used for settlement purposes.
If approved, it would mean delivery of balancing services can be measured as close as possible to the asset delivering them.
The modification was proposed by Flexitricity. Founder and chief strategy officer, Alastair Martin, said it would mean “the person buying the flexibility knows what they are paying for, and the person delivering the flexibility knows that they will receive a fair days pay for a fair day’s work”. The current set up is less transparent, due to “noise” from other assets and processes behind the boundary point. He said it was time to move away from “honesty boxes” within balancing services and elsewhere as more providers come to market.
Elexon’s Bygraves suggested engagement around P375 had been “great” with 45-50 stakeholders taking part “from across industry, including incumbent energy companies as well as new entrants”. Support for the proposal, he suggested, was “unanimous”, within working groups.
Should the proposal make its way past the code panel and then the Gas & Electricity Markets Authority, system changes will be required, but Bygraves thought the new arrangements could be running by spring 2022.
“This is very much about transforming the energy system, and the transition to a smarter, more flexible system required to achieve the commitment to net zero. Opening up the market in this way is a means of enabling that,” he said.
Virtual lead parties and meter matters
Without P375, Elexon’s performance assurance role would become “too huge” if an increasing number of providers take the Virtual Lead Party (VLP) route into the Balancing Mechanism, suggested Flexitricity’s Martin.
To date, however, very few have become VLPs. Martin said the fact it is “hard work and quite slow might be putting people off … but I don’t think that will be a permanent state of affairs”.
Alongside P375, Elexon has also developed a new metering Code of Practice (CoP11) to set standards for the accuracy of the asset meters that will be used. This will be critical in bringing assets such as EVs, smart heating, batteries and the broader domestic market into flexibility and balancing services, said Martin.
He added that while there are questions over lead times for P375, “what really matters in the implementation of the modification is not the time to deliver the IT requirements, it is the time to get the final CoP11 metering standards onto the books.
“That defines what we want manufacturers to deliver – and once they know that, they can set about delivering it. So getting CoP11 approved is in many ways more important than the timetable for delivering of P375 – because it means we are putting the right stuff in streets, homes and onto garage walls.”
The decision on whether to recommend the modification to regulators will be made by the BSC panel in December.
Limejump is very supportive of the P375 code modification, particularly in light of increasing renewable generation and storage co-location behind the meter boundary point.
The VLP route becomes valuable and of interest to the wider Limejump customer base once P375 passes. Prior to this, BTM generators are precluded from entering the BM without risk in respect of imbalance calculations. This is particularly complex where there are multiple assets BTM.
Widening BM access to a wider pool of asset operators would be a welcome development. Without P375 many small generators are precluded from providing flexibility to National Grid which is incongruent with the desire to move towards a net zero electricity system in the UK.
We welcome the parallel progress on the latest Code Of Practice from Elexon (COP11) which will cover Metering for Balancing Services Assets for settlement purposes and will ensure appropriate metering standards for BTM assets.