BSC Panel 264

9 March 2017

Health & Safety

Update on the Switching

Programme

9 March 2017 Arik Dondi - Ofgem

Verbal

Update on the Switching Programme

Purpose

• Background on the strategic outline case (SOC)

• Explain the three reform packages

• Review key impacts • Review Ofgem’s request for information

• Detailed Level Specification Phase

The strategic outline case

• A strategic business case using HM Treasury five case model

• Published on 19 Jan 2017 • Developed with stakeholder input • Sets out three reform packages • We are now requesting information to assess packages • Aim to consult on a preferred option in Aug 17 with

decision end 17

• To support the RFI, the SOC provides the following key elements:

• Economic Case (Chapter 3 and 4) • Reform packages (Appendix 1) • Business Process Modelling (Appendix 2) • Data architecture (Appendix 3) • Reform package spreadsheet (Appendix 4a)

DO NOTHING

No system or process changes

No improvement to

reliable switching

21 day switch

Draft reform packages

OPTIMISE EXISTING

Use existing systems

Address matching to improve reliability

Key process changes (harmonised where

possible) to deliver 3 to 7 day switch

MAJOR REFORM

New central switching service (core data)

Enduring reliability

improvement to MPxN/address data

Harmonised and

simplified next day switching process

FULL REFORM New central switching

and market intelligence services

Enduring reliability improvements, and improved access to

broader range of switching data

Harmonised and

simplified next day switching process

Potential consumer benefits

Scale of challenge

Key elements of reform packages

Optimise existing – RP1 Major Reform – RP2 Full Reform – RP3

• Objections window reduced to 1WD

• Gas confirmation window reduced to 1WD

All packages

• Supply point nomination data accessed from Xoserve via API

• Suppliers support ‘equivalent terms’ for cooling off returns

• MPxNs matched to GB address list

• MPRS modified to handle: Related MPANs; import/export; dom/non-dom

• MAP ID maintained in UKLink and MPRS (and MAPs notified at switch)

• API access to enquiry services (for RP1 and 2 this is ECOES & DES)

• MAM unbundled to MOP and MAP

• Harmonisation of advance registration and standstill periods

• As for RP1, apart from…

• New Centralised Switching Service (CSS)

• MPRS and UKLink modified to interface with CSS and to remove switching functionality

• Supplier led gas switching

• Losing suppliers respond instantly to objection requests

• MPxNs linked via GB address register

• Shipper and agent IDs recorded in CSS - (MOP, DA, DC, MAM, MCP, MAP)

• CSS notifies supplier and agents of confirmed and executed switch. Used for agent appointment

• Calendar day switching (CSS, supplier objections 24x7)

• As for RP2, plus…

• New Market Intelligence Service (MIS) – all switching, meter point, settlement and meter asset data (incl. smart) accessed via MIS

• ECOES and most of DES are withdrawn

• MPRS modified to handle MTDs

• MIS available 24x7

Reform Package 1

Reform Package 2

Reform Package 3

Variations on policy positions to be tested in the RFI

Cooling off (all) • Variation 1: No requirement for Supplier A to offer equivalent terms

Objections (RP2) • Variation 1: For RP2, CSS manages central objections database • Variation 2: Compressed window of 5 hours • Variation 3: Longer switch period for non-domestic

End of next day switching (RP2) • Variation 1: Longer objection period • Variation 2: Longer period between gate closure and switch

Calendar days vs working days (RP1) • Variation 1: Operate on calendar day basis

Enquiry service (RP3) • Variation 1: MIS developed and operated by Gemserv/Xoserve Quick wins • Variation 1: implement 1 day objections and cooling off changes in Nov 18

Request for information

• Issued to suppliers on 19 Jan alongside SOC

• Large suppliers received a mandated request. Mid-tier supplier suppliers received a request which mandated certain elements. Other suppliers received a voluntary request

• Response requested by 2 March

• RFI focuses on the following impact areas for suppliers • Contracting and preparatory work prior to switching request • Interaction with switching service • Other activity around the switch • Post switch activity • Delivery • Additional questions

Context - Programme phases

Blueprint Detailed Level Specification Enactment Design, Build

and Test

ACTIVITY

• Define new market arrangements in a Target Operating Model (TOM) including Delivery Strategy

• Consultation and Decision (with IA) on preferred outcome

ACTIVITY

• Define in detail how reforms will work

• Draft modifications to codes and licences

• Consultation and Decision (with IA) on SCR Direction and licence mods

ACTIVITY

• Changes made to codes and licences

• Central Registration Service procured

ACTIVITY

• Systems designed, built and tested.

• Transition scheme executed

PHASE 1 PHASE 2 PHASE 3 PHASE 4

ROLES

• Workgroups led by Ofgem

• Industry and consumer reps to support workgroup option analysis

• Industry to provide data for IA

ROLES

• DCC and Industry implement reforms

• DCC undertake market assurance

• DCC execute Transition Scheme

• Ofgem monitor and take go-live decision

ROLES

• Industry Code Administrators and Ofgem led workgroups

• Industry and consumer reps continue to support workgroups

• Industry to provide data for IA

ROLES

• Industry raise code mods and Ofgem approve

• Ofgem make licence modifications

• DCC procure a central registration service

Monitor and

Evaluate

PHASE 5

DLS products (for illustration only)

4 Design Baseline 4*

4.1 E2E Switching Arrangements Design

4.1.1 DLS Design Assumptions

4.1.2 Detailed Design Models

4.1.3 E2E Data Architecture & Data Governance

4.1.4 E2E Switching Arrangements NFR

4.1.5 Solution Architecture

4.1.6 Operational Choreography

4.1.7 Technology & Comms. Standards

4.1.8 Policy Detailed Design

4.1.9 E2E Switching Arrangements Service Management Design

4.1.10 Security & Privacy Design*

4.1.10.2 Security Requirements

4.1.10.3 Privacy Requirements

4.1.10.1 E2E Security Architecture

4.2 CRS Design*

4.2.1 CRS Detailed Design

4.2.2. CRS Non-Functional Requirements

4.2.3 CRS Service Management Requirements

4.2.4 CRS Delivery Plans

4.2.5 Security Section of tender pack(s)

4.3 Overall Delivery Plan*

4.3.1 Design & Build Plan

4.3.2 Integration Plan

4.3.3 Testing Plan

4.3.4 Transition Plan

4.3.5 Post-Implementation Plan

4.3.6 Data Migration Plan

4.4 Regulation Design*

4.4.1 E2E Regulation Structure & Design Standard

4.4.2 Transitional Regulation Requirements

4.4.3 REC Shell / Structure

4.4.4 Approach to REC Body Selection / Procurement

4.4.5 Specification of REC Body / Administrator

4.4.6 Approach to Legal Drafting Procurement

4.4.7 Specification for legal support / procurement

4.4.8 Programme Board paper with procurement recommendation

4.3.7 SI Procurement Specification

1. Ofgem owned, Ofgem led no substantive DCC involvement e.g. regulatory products

2. Ofgem owned, Ofgem led , substantive DCC contribution.

3. Ofgem owned, DCC led.

4. DCC owned, DCC led e.g. procurement products

* indicates a “wrapper” product for the sub-products listed

Programme governance

Technical Design

Authority

Ofgem Design and Impact Assessment Team

SRO, advised by Ofgem Programme Board

Programme Management &

PMO

Switching Programme

Steering Group

Ofgem Senior Management Team

Delegated authority and budget

Design Alignment (TDA & DIAT)

Switching Programme

Delivery Group

Major escalated issues

Commercial Continued commercial development/monitoring work (separate from DLS)

Detailed Switching Arrangements

Design Team

Switching Regulation

Design Team

CRS Design

Design Teams

Switching Delivery Design

Design Team

Report

Monitor product delivery Management & Co-ordination

Design Alignment & Approval

Report & Inform

Product specific

user fora

Product specific

user fora

Product specific

user fora

Product specific

user fora

EDAG

Blueprint only

Q&A

Welcome any questions on the SOC, RFI, DLS Phase or next steps

National Grid EBS Update

9 March 2017 Antonio Del Castillo Zas

Verbal

Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line.

Electricity Balancing System External Update

BSC, GCRP, Ops forum March 17

EBS Programme

EBS March update

Scheduling parallel run

Dispatch investigation

EBS User Group

EBS Programme

Scheduling parallel run

Scheduling parallel run carries on in the Control Room

New processes and people are exposed daily to EBS

Shift and non-shift personnel are being authorised for new processes and tools (80% complete)

Output is analysed operationally and commercially on a daily basis

EBS Programme

Scheduling parallel run - Scheduling trials

Scheduling trials consist of:

EBS output for synch and desynch events entered manually into BM Systems 4 hours ahead of real time

Dispatching still being managed with BM Systems

Reporting and auditing still managed by BM Systems

Planned for weeks 13/03-24/03

No impact to BSC Parties on instructions or interfaces

EBS Programme

Dispatch investigation In November 2016 a full Dispatch Trial took place on the

simulator. This was the first opportunity to test the EBS system End-to-End against live production data, following delivery of critical change requests & defects

The Trial was successful from a frequency control perspective but the EBS issued 5x the number of BOAs compared with BM Systems

In response to these results, the PMB set up a Dispatch Task Force, including NG and the software supplier personnel

Following further tests, a number of key issues were identified that were shown to be adversely affecting the control cycle performance of the EBS system

We are now considering five options by which to proceed

EBS Programme

Dispatch investigation

The analysis of these 5 options includes pros, cons, costs, timeline and risks

This report was presented to NG senior management on 1st March

The Dispatch go-live, EBS go-live (i.e. BMRS cutover) and P297 implementation dates are dependant on this decision

EBS Programme

EBS User Group

Once commissioned, EBS will be a key system for the GB electricity market

The EBS User Group is intended to be National Grid’s customer liaison forum for EBS related issues with the BSC parties (including control points and the trading agents), the code administrator and the Authority

Terms of reference are distributed to the BSC panel and the GCRP for comments

Implementation of Open Governance on the Grid Code

9 March 2017 Ryan Place

Verbal

Grid Code Modification GC0086 Open Governance

March 2017

28

Grid Code Modification – GC0086

Open Governance – What does it mean?

Authority approval of modification GC0086, means change to Grid Code to introduce open governance. The changes include: enabling participants other than National Grid Electricity Transmission

(NGET) to formally propose code modifications, including alternatives;

a revised Grid Code Panel membership and election process;

the appointment of an independent Panel chair, subject to Ofgem approval;

the introduction of a Self-Governance process;

provision of a Panel recommendation (or, in the case of self-governance, a

decision) on code modifications;

a revised Significant Code Review (SCR) process to reflect recent licence

changes under CGR3

a process for urgent modifications.

29

Grid Code Modification

Key Points

• Panel Composition/Elections.

• Who can raise Mods.

• New way of working.

30

Grid Code

Who will be the Voting Grid Code Panel Members?

Role Number of Seats

Number of Alternates Elected/Appointed

National Grid Electricity Transmission (SO) 1 1 Appointed

DNO 2 2 Appointed by DNO’s - Industry Codes Technical Steering Group (ITCG)

Supplier Representative 1 1 Elected

Offshore Transmission Owner (OFTO) or Interconnector

1 1 Elected

Onshore TO 1 1 Elected

Generator 4 2 Elected

Consumer 1 1 Appointed by Citizens Advice and Citizens Advice Scotland

Other 1 1 Appointed by Chair or Authority (optional)

Total Votes 12

31

Grid Code

Who are the Non Voting Grid Code Panel Members?

Role Number of Seats Elected/Appointed

Chair 1 Casting Vote only if independent, no vote if National Grid Chair

Panel Secretary 1

Code Administrator 1

Ofgem 1

BSC Panel Representative 1

Workgroup Chair (GCDF Chair) 1

Total 6

32

Grid Code

What is the Panel Representative Election Process?

Role outline of a Panel Member to be sent out 3 March 2017

Invitation to industry to nominate candidates 3 March 2017

Closing date for nominations 17 March 2017 - 17:00hrs

Circulation of Grid Code candidates and voting papers 22 March 2017

Voting papers to be submitted to the Code Administrator By 5 April 2017 - 17:00hrs

Grid Code election results published 10 April 2017

Code Administrator to prepare and submit Election Report to the Authority 14 April 2017

33

Grid Code

Who can propose a change to Grid Code?

A proposal to modify the Grid Code may be made:

a) by any User; any Authorised Electricity Operator liable to be materially affected by such a proposal; the Citizens Advice or the Citizens Advice Scotland; or

b) by the Grid Code Panel (Under GR.25.5); or

c) by the Authority:

i. following publication of its Significant Code Review conclusions; or

ii. under GR.17; (The Authority may develop a Authority-Led Modification in respect of a Significant Code Review, in accordance with the procedures set out in this GR.17) or

iii. in order to comply with or implement the Electricity Regulation and/or any relevant legally binding decisions of the European Commission and/or the Agency.

34

Grid Code

Workgroup, a new way of working

To align approaches between the Grid Code Panel and Workgroup, and deliver in an efficient, economical and expeditious manner, all Grid Code Workgroups and the Grid Code Development Forum (GCDF) will be aligned to take place on a single day.

In order to facilitate this change all pre-reading material will be circulated for comment 5 working days prior to the meeting.

The Code Administrator will Chair and provide a Technical Secretary for the GCDF and Workgroup as back to back meetings on one day.

The expectation for all Workgroup Members will be to have completed pre-reading in order to focus discussion on industry participants queries of the Proposed Modification Solution.

The Workgroup Report content will be owned and developed by all Workgroup Members with the expectation that the Proposer will lead on developing their solution and associated legal text.

35

Grid Code

What are the Key Changes?

Proposer Ownership The proposer owns their modification and only the

proposer can change the modification All modifications shall be submitted on the Grid

Code Modification Proposal template and should include proposed Legal Text Proposers represent their modifications through

the Panel and any Workgroups

Modifications Any party can raise a modification to meet the

Grid Code Objectives (appendix 1). There are four types of modifications: Urgent,

Self-Governance, Standard and Fast Track Modifications Alternative modifications can be raised

Grid Code Panel Up to 12 Voting Members – cross energy industry

representation Up to 6 Non Voting Members Monthly meetings to account for the increase of

modifications

Workgroup Workgroups can be up to a maximum of six

months Workgroups will develop the Proposal (including

the Report) and any alternatives The expectation will be the Proposer leads on

developing both solution and legal text Workgroups and GCDF will be combined and

meet on a fixed day every month

36

Grid Code

Contact Information

A full version of the slides can be found online at http://www2.nationalgrid.com/UK/Industry-information/Electricity-codes/Grid-code/Grid-Code-Development-Forum/

If you would like further general information in relation to Open Governance, or how you may be affected please email: grid.code@nationalgrid.com

37

i. to permit the development, maintenance and operation of an efficient, coordinated and economical system for the transmission of electricity; Neutral

ii. to facilitate competition in the generation and supply of electricity (and without limiting the foregoing, to facilitate the national electricity transmission system being made available to persons authorised to supply or generate electricity on terms which neither prevent nor restrict competition in the supply or generation of electricity); Neutral

iii. subject to sub-paragraphs (i) and (ii), to promote the security and efficiency of the electricity generation, transmission and distribution systems in the national electricity transmission system operator area taken as a whole; and Neutral

iv. to efficiently discharge the obligations imposed upon the licensee by this license and to comply with the Electricity Regulation and any relevant legally binding decisions of the European Commission and/or the Agency.

v. to promote efficiency in the implementation and administration of the Grid Code arrangements.

Grid Code

Appendix 1 – Grid Code Objectives

Change Report and Progress of

Modification Proposals

9 March 2017 Douglas Alexander

264/03

BSC Modifications raised by year

61 54 40 28 15 10 13 11 17 17 15 8 9 18 14 23 1 0

10

20

30

40

50

60

70

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

BSC Modifications overview

Initial Written Assessment

Assessment Procedure P325, P332, P344, P348, P349, P354.

Report Phase

With Authority

Authority Determined P350

Self-Gov. Determined -

Fast Track Determined -

Open Issues Issue 65, Issue 66, Issue 67

BSC Modifications timelines

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Oct 17

Nov 17

Dec 17

Jan 18

…

P325 AR DMR

P332 AR DMR

P344 AR DMR

P348 AR DMR

P349 AR DMR

P354 AR DMR

Modification Updates

■ P325 – Improving the accountability of BSCCo stakeholders and better aligning BSCCo governance with best practice

– Business requirements to be considered by Workgroup 10 March

■ P344 – European Replacement Reserve

– First Assessment Procedure consultation issued 23 February

■ P348/349

– Second Assessment Procedure consultation issued 20 February

■ P351

– Authority approved proposed solution – April 17 implementation

Recommendations

We invite the Panel to:

a) NOTE the contents of the Change Report.

CP1479 ‘Updates to the Defined Metering Points

in Codes of Practice 1,2,3,5 and 10’

9 March 2017 Giulia Barranu

264/11

CP1479: overview

■ ELEXON noted discrepancies between the points of measurement defined in the BSC and in CoPs 1, 2, 3, 5 and 10 and the actual physical points of connection at certain types of sites

■ On 6 February 2014, ELEXON raised Issue 54 to discuss this issue

■ ELEXON raised CP1479 to amends CoPs 1, 2, 3, 5 and 10 in order to resolve three issues on the DMP and implement the recommendations in the Issue 54 Report

ISG: view of the member who disagreed with the CP

■ One member disagreed with the CP because:

– BSC objective (c)

– BSC objective (d)

– This change should be made with broader consideration of the allocation of losses

Current working practice

G

Generating Unit: 400MW

(or Wind Farm)

Wind Farm

M

Generator (’s)

transformer

G

M

25kV (LV side)

275/400kV (HV side)

Defined Metering Point

Transmission System

Power transformer (part of

Transmission System)

33kV (LV side)

132kV (HV side)

Commercial interface

Defined Metering Point ???

England and Wales e.g. North of Scotland

Boundary Point (and commercial interface)

Boundary Point

G G G G

Recommendations

We invite the Panel to:

a) NOTE that the ISG did not make a unanimous decision on 21 February 2017, but recommended by majority (all but one ISG member) that the Panel approves CP1479;

b) NOTE that the SVG unanimously approved CP1479 on 28 February 2017;

c) APPROVE CP1479 for implementation on 2 November 2017 as part of the November 2017 BSC Release; and

d) APPROVE the proposed changes to CoPs 1, 2, 3, 5 and 10 as contained in Attachments C-G.

European Network Code Implementation Plan

9 March 2017 Jemma Williams

264/04

ENC Impacts on the BSC Codes and Guidelines Abbreviations Description Status Version BSC Impact

Connection Codes

Requirements for Generators

RfG To harmonise and update technical connection requirements for all types of generators from 800W upward.

Adopted 14 April 2016 No changes required (initial view)

Demand Connection Code DCC Connection of industrial loads and DSOs, and sets out requirements which will apply to the demand side of the power system.

Adopted 17 August 2016 No changes required (initial view)

Network Code on High-Voltage Direct Current Connections

HVDC Rules for the use of HVDC technology included between synchronous area and embedded systems.

Adopted 26 August 2016 No changes required (initial view)

Market Codes

Forward Capacity Allocation

FCA

Couples existing European electricity forward markets to create a pan-European internal market by harmonising market rules for calculating and allocating capacity in the forward market.

Adopted 26 September 2016

No changes required (initial view)

Capacity Allocation and Congestion Management

CACM

Rules for allocating capacity in day-ahead and intra-day timeframe, calculating the levels of availability cross border, allocating and recovering costs.

Adopted 24 July 2015 1 Potential Modification

Guideline on Electricity Balancing

EB GL

Rules for cross border exchange of reserves and balancing energy

Pending 24 January 2017 1 Live Modification 11 Potential Modifications

System Operator Codes

Transmission System Operation Guideline

TSOG

Setting minimum system security, operational planning and frequency management standards.

Pending 4 May 2016

No changes required (initial view)

Network Code on Emergency and Restoration

NC ER Harmonisation of system defence and restoration procedures during severe events. Also includes market suspension and restoration requirements

Pending 24 October 2016

1 Potential Modification

ENC Implementation Plan timeline

Insert: Document title 51

European harmonisation status - ON TRACK

Today

CACM came into force

P344-Project TERRE

NC ER comes into force

Potential Mod 1-Time of Interconnector Data Submission

EB GL entry into force (assumed)

Application for Exemption from 15 min Settlement (assumed)

Backstop date for Derogation from Article 55 (imbalance price)

Potential Mod 2-Imbalance Price (without derogation)

Potential Mod 3-Inclusion of Imbalance Adjustments (without derogation)

Assignment of EBGL where needed

Potential Mod 4-Align BSC with the Authority's oversight obligation

NGET proposals for suspension/restoration

Backstop date for ELEXON assigned / delegated

EB GL provisions apply (assumed)

Potential Mod 5-Amendments to Imbalance Price

Potential Mod 6-Align BSC with the TSO's Terms and Conditions

Potential Mod 7-Project TERRE 2

Potential Mod 8-Unintended exchanges of energy

Potential Mod 9-NGET proposal on specific products

Potential Mod 10-Market Suspension and Restoration Arrangement

UK leaves EU (assumed) Potential Mod 3-Inclusion of Imbalance Adjustments

(with derogation) Potential Mod 11-Harmonised Imbalance Settlement

(Includes Mod 2 with derogation)

Potential Mod 12-Project mFRR

Backstop date for RR standard products

Potential Mod 13-Project TERRE 3

Earliest decision on bidding zone change

Backstop date for harmonised Imbalance Settlement

Implementation date for any bidding zone change

Backstop date for FRR standard products

Jan-2015 Jan-2016 Jan-2017 Jan-2018 Jan-2019 Jan-2020 Jan-2021 Jan-2022

European Network Code Implementation for the BSC

BSC Modifications

Modification reference Title Dependencies Initial view of Probability

P344 Project TERRE n/a

Potential Modification 1 Time of Interconnector Data Submission National Grid Likely

Potential Modification 2 Imbalance Price National Grid Less likely

Potential Modification 3 Inclusion of Imbalance Adjustments National Grid Likely

Potential Modification 4 Align BSC with the Authority’s oversight obligations

Ofgem

Likely

Potential Modification 5 Amendment to Imbalance Price European TSOs Less likely

Potential Modification 6 Align BSC with the TSO’s Terms and Conditions National Grid Less likely

Potential Modification 7 Project TERRE 2 (clearing price) European TSOs Less likely

Potential Modification 8 Unintended exchanges of energy European TSOs Less likely

Potential Modification 9 NGET proposal of specific products National Grid Less likely

Potential Modification 10 Market Suspensions and Restoration Arrangement

National Grid Less likely

Potential Modification 11 Harmonised Imbalance Settlement National Grid Likely

Potential Modification 12 Project mFRR European TSOs Likely

Potential Modification 13 Project TERRE 3 (standard products) European TSOs Less likely

Recommendations

We invite the Panel to:

a) NOTE the content of this paper; and

b) NOTE the BSC Implementation Plan will be presented to Ofgem on 14 March 2017.

Minutes of Meetings 263 and

Actions arising

9 March 2017 Victoria Moxham

Chairman’s Report

9 March 2017 Michael Gibbons

ELEXON Report

9 March 2017 Mark Bygraves

264/01

Distribution Report

9 March 2017 David Lane

National Grid Report

9 March 2017 Chris Fox

Ofgem Report

9 March 2017 Nadir Hafeez

Reports from the ISG, SVG, PAB and

TDC

9 March 2017

264/01 c-f

Trading Operations: BSC

Operations Headline Report

9 March 2017

264/02

System Price Analysis Report

9 March 2017

ISG 191/08

Review of Specified Charges

9 March 2017

264/05

Kathy Ferrari

Recommendations

We invite the Panel to:

a) APPROVE the new SVA Specified Charge of £0.00598 /SVA MSID per month.

BSC Audit Scope 2017/18

9 March 2017

264/06

Jason Jackson

Introduction

■ The paper sets out the proposed Balancing and Settlement Code (BSC) Audit Scope for the BSC Year 1 April 2017 to 31 March 2018

■ Endorsed by PAB at its February meeting

■ The PAB will consider further potential changes to the Scope following the completion of the 2016/17 BSC Audit

■ We are proposing to remove elements from the BSC Audit scope that present low risk to Settlement

Introduction

Focus of the BSC Audit

■ The BSC Audit will continue to focus on:

– Change of Measurement Class

– Change of Supply

– Commissioning

Rotational approach

■ The BSC Audit will continue to take a rotational approach to some lower risk areas of the BSC Audit Scope

Commissioning

■ Commissioning will focus on the requirements and associated timescales set out by CP1458

Proposed Changes

New Additions

■ Implementation of Specific BSC Changes

– Audit of the implementation of up to 3 Specific BSC changes.

■ ‘Off the shelf Suppliers’

– Up to four will be targeted

■ ‘Intelligent’ approach to determining where auditing a Party for both HH and NHH might add value where the BSC Auditor is already on site

Proposed Changes

Removals

■ Unmetered Supplies

– Provision of Standard Settlement Configuration (SSC) and Profile Class (PC) details including disconnections and Energisation Status

– Creation and provision of Unmetered Supplies (UMS) Certificates

– Maintenance and provision of connection agreements

■ Change Management

– Processes and controls used to implement BSC change releases by Suppliers, Supplier Agents and Licensed Distribution System Operators (LDSOs)

Proposed Changes

Reductions

■ Proving tests in the SVA market

– CP1472 will remove the requirement for proving tests in approximately 90% of instances

■ CVA MOA (CVA Activities)

– Two small CVA MOAs due to undergo limited scope audits to be scoped out for the 2017/18 audit year on the basis that no activity has taken place to date during 2016/17

Materiality threshold

BSC Audit Materiality Thresholds for 2015/16, 2016/17 and 2017/18

Period Total Energy Consumption (TWh)

0.5% of Consumption during period (TWh)

Value rounded to 1 decimal place (TWh)

01 January 2014 – 31 December 2014 270 1.345 1.4

01 January 2015 – 31 December 2015 262 1.31 1.3

01 January 2016 – 31 December 2016 260 1.301 1.3

Average 264 1.318 1.3

Next Steps

■ ELEXON will review the scope following the completion of the 2016/17 BSC Audit

■ 2016/17 BSC Audit report scheduled for submission to the June 2017 Panel meeting

■ Amendments may subsequently be made by the Panel following the Panel’s consideration of the BSC Audit Report

Recommendations

We invite the Panel to:

a) NOTE that the PAB has endorsed the BSC Audit scope;

b) APPROVE the BSC Audit scope for 2017/18; and

c) AGREE to delegate responsibility for any future amendments to the BSC Audit scope 2017/18 to the PAB.

Performance Assurance Framework

Review scope and approach approval

9 March 2017

264/07

Max O’Connor

Approach

■ Four work streams: smart metering rollout monitoring, REM and other procedures, data provision, and Performance Assurance Techniques (PATs)

■ The smart metering work stream is planned to complete in September 2017

■ REM and other procedures and data provision will be run in parallel between March 2017 and March 2018

■ Work on PATs will only begin once the recommendations on previous work streams are approved

■ September 2018 is the projected end of the review

■ From September 2018 onward any outstanding BSC Change or system procurement resulting from the review will be progressed

PAB Endorsement and Next Steps

■ PAB has endorsed the scope and approach

■ Work will commence immediately if approved

Recommendations

We invite the Panel to:

a) APPROVE the scope and approach for the Performance Assurance Framework review;

b) AGREE that Mitch Donnelly should be appointed as Panel Sponsor for the review; and

c) AGREE that the PAB should continue to manage the review on the Panel’s behalf.

Review of Metering Dispensations and

non-standard BMUs – Final Report

9 March 2017

264/08

Nicholas Rubin

Overview

■ Panel’s Strategic Work Programme identified need for review

– Concern over number of applications for Metering Dispensations and non-standard BMUs

– 28 of 37 ISG decision papers in 2015/16

– another 44 non-standard BMUs expected by 2022

■ However, relative number of applications is low

– 29 million Metering Systems, 3200 BMUs

– Since 1990, 465 applications for Metering Dispensations…

… of which 216 specific and 21 generic Metering Dispensations are current

– Since 2001, 50 non-standard BMUs applied for and approved

■ ELEXON has made improvements in last 24 months to improve Metering Dispensation processes

What we found

■ 50% of Metering Dispensations and 60% of non-standard BMUs are due to substantive regulatory changes, e.g. NETA, BETTA, OFTO

■ Remaining:

– Metering Dispensations due, primarily, to location of metering or technical non-compliances

– Non-standard BMUs due to reconfiguration of existing or installation and use of new equipment

■ In general BSC requirements are adequate…

… though opportunity to update definitions of standard BMUs, improve overall processes and we consult and communicate future changes.

Main recommendations

Metering Dispensations

■ Clarify location of metering

■ Consider necessity for metering of low voltage assets at Offshore wind farms

■ Improve guidance documentation and consultation processes

■ Review all existing differencing arrangements to ensure they remain fit for purpose

Non-standard BMUs

■ Introduce four new, standard BM Unit configurations

■ Introduce concept of a generic non-standard BM Unit

■ Improve application and periodic review processes

■ Identify unapproved non-standard BM Units and put in place remedial action

Our next steps

■ Report reviewed by ISG and SVG

– No specific comments

■ ELEXON will prepare a detailed plan for prioritising and implementing our recommendations

– Will engage ISG and SVG where necessary

– Will return to Panel if necessary, e.g. if modifications need to be raised

■ One CP already raised to implement recommendations of Issue 54

Recommendations

We invite the Panel to:

a) NOTE the content of our Final Report;

b) NOTE that the ISG and SVG have reviewed our Final Report and recommendation;

c) NOTE that the Final Report represents the conclusion of a BSC Review and so will be sent to the Authority, included in Newscast and published on the BSC Website in accordance with Section C 3.8.6;

d) ENDORSE the recommendations summarised above and set out in our Final Report; and

e) NOTE that ELEXON will develop a plan to implement our recommendations and will return to the Panel to present our implementation plan.

P305 Post Implementation

Review

9 March 2017

264/09

Emma Tribe

EBSCR to BSC Modification P305

■ BSC Modification P305 was raised to progress the conclusions to Ofgem’s Electricity Balancing Significant Code Review (EBSCR), and implemented on 5 November 2015

■ Reform to improve efficiency in balancing and security of supply

■ EBSCR Final Policy Decision:

a) Make cash-out price ‘marginal’

b) Include a cost for disconnections

c) Improve the way reserve costs are priced

d) Move to a single cash-out price

BSC Modification P305 changes

■ Changes introduced make cash-out prices ‘more marginal’:

1. A reduction in the Price Average Reference (PAR) value to 50MWh and the Replacement PAR (RPAR) value to 1MWh upon implementation

2. A price for Short Term Operating Reserve (STOR) actions using a Reserve Scarcity Price (RSP) determined by a ‘static’ Loss of Load Probability (LoLP) function

3. A price for Demand Control actions at Value of Lost Load (currently £3,000/MWh)

4. A single imbalance price for each half-hour

■ Further changes from 1 November 2018:

1. A further reduction to the PAR value to 1MWh on 1 November 2018.

2. Increase the VoLL to £6,000/MWh

3. A ‘dynamic’ LoLP function

Trends in Market Prices

020406080

100120140160180200

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

Off

er P

rice

(£

/MW

h)

Gas Coal Hydro Pumpedstorage

0

20

40

60

80

100

120

140

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16Ave

rage

Sys

tem

Pri

ce (

£/M

Wh

)

Short System Long System Average System

0

20

40

60

80

100

120

140

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

MIP

(£

/MW

h)

Daily Average Market Index Price Monthly Average Market Index Price

Market Index Price (proxy for wholesale prices) Average Offer Price

System Prices ■ Market, Offer and

System Prices increased in Autumn

■ Spread of prices in Long vs Short System post P305

■ Lower average System Price

System Prices

01,0002,0003,0004,0005,0006,0007,0008,000

- -2

0

-20

- -1

8

-18

- -1

6

-16

- -1

4

-14

- -1

2

-12

- -1

0

-10

- -8

-8 -

-6

-6 -

-4

-4 -

-2

-2 -

0

0 -

2

2 -

4

4 -

6

6 -

8

8 -

10

10 -

12

12 -

14

14 -

16

16 -

18

18 -

20

20 +

Freq

uenc

y

System Price Changes Long Short

0

500

1000

1500

2000

2500

3000-

-20

-16

- -1

4

-10

- -8

-4 -

-2

2 -

4

8 -

10

14 -

16

20 -

22

26 -

28

32 -

34

38 -

40

44 -

46

50 -

52

56 -

58

62 -

64

68 -

70

74 -

76

80 -

82

86 -

88

92 -

94

98 -

100

Freq

uen

cy

System Prices (£/MWh)

14/15 15/16

0

500

1000

1500

2000

2500

3000

- -2

0

-16

- -1

4

-10

- -8

-4 -

-2

2 -

4

8 -

10

14 -

16

20 -

22

26 -

28

32 -

34

38 -

40

44 -

46

50 -

52

56 -

58

62 -

64

68 -

70

74 -

76

80 -

82

86 -

88

92 -

94

98 -

100

Freq

uen

cy

System Price (£/MWh)

P217 Live

System Prices - 2014/15 vs 2015/16

Differences between P217 price and live price

System Prices – P217 vs Live

■ £14/MWh difference in 2014/15 and 2015/16 distributions

■ Small differences between P217 and Live price

■ Differences over £20/MWh when market short

Balancing Behaviour

89

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Dec Jan

Feb

Mar Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Abs

olu

te E

ner

gyIm

bala

nce

V

olu

me

(TW

h)

12/13 13/14 14/15 15/16

20%

30%

40%

50%

60%

70%

80%

90%

Dec Jan

Feb

Mar Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Per

cen

tage

of

Lon

g P

erio

ds

12/13 13/14 14/15 15/16

Market Length Absolute sum of Parties' Energy Imbalance Volumes

-600

-400

-200

0

200

400

600

800

1000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47

Ener

gy I

mba

lan

ce V

olu

me

(MW

h)

14/15 - Long Volume 14/15 - Short Volume15/16 - Long Volume 15/16 - Short Volume

Average of Parties' Energy Imbalance Volumes by Settlement Period ■ More long Settlement

Periods in 2015/16

■ Greater Energy Imbalance Volumes for Parties

Production and Consumption Accounts

90

5 MWh

-3 MWh

Production Account

Consumption Account

Energy Imbalance Volumes

3 MWh

Net Energy Imbalance Volumes for a Party

2 MWh Party’s net position

‘Netted off’ Volume

■ No need to balance Production and Consumption Accounts separately

■ Still need to balance the net position

Trading Charges

-2

-1

0

1

2

3

4

-20

-10

0

10

20

30

40

Dec

-12

Feb-

13

Apr-

13

Jun-

13

Aug-

13

Oct

-13

Dec

-13

Feb-

14

Apr-

14

Jun-

14

Aug-

14

Oct

-14

Dec

-14

Feb-

15

Apr-

15

Jun-

15

Aug-

15

Oct

-15

Dec

-15

Feb-

16

Apr-

16

Jun-

16

Aug-

16

Oct

-16

Tota

l Im

bala

nce

Vol

um

e (T

Wh

)

Net

Tra

din

g C

har

ge (

£M

illiio

n)

Absolute Imbalance Volume Monthly Net Imbalance Charges

Net Energy Imbalance Charge and total absolute Energy Imbalance Volume by month

■ Net credit Energy Imbalance Charges to Parties in 2015/16;

■ Highest Account Energy Imbalance Volumes in 2015/16

Reserve Scarcity Price (RSP) Repriced STOR actions

■ 130 STOR actions repriced in September and October

0

2000

4000

6000

8000

10000

12000

07-M

ar

22-M

ar

06-A

pr

21-A

pr

06-M

ay

21-M

ay

05-J

un

20-J

un

05-J

ul

20-J

ul

04-A

ug

19-A

ug

03-S

ep

18-S

ep

03-O

ct

18-O

ct

02-N

ov

17-N

ov

De-

rate

d M

argi

n (

MW

)

Min of De-Rated Margin

Daily minimum De-rated Margin

■ Two Settlement Periods where RSP repriced actions set the System Price; under November 2018 scenario this would increase to four

■ Parties can change behaviour in anticipation of a high RSP

Summary

■ P305 raised to process EBSCR conclusions

■ Market prices have changed since the implementation of P305

■ Between December 2015 and November 2016:

– System Prices were on average lower

– More long Settlement Periods

– Greater Energy Imbalances for Parties

– Implications of a Single Imbalance Price on dual accounts

– Energy Imbalance Charge - net Credit

– RSP only used in September and October

Recommendations

We invite the Panel to:

a) NOTE the analysis in the post implementation review.

Next Meeting: 13 April 2017