Posted on: 30/09/2016
A change to energy industry rules to give customers better access to information was proposed by SmartestEnergy last year and is now starting to take effect. Head of Generation Sales Iain Robertson looks at what impact it will have.
The costs involved in balancing the electricity transmission network have become a greater issue for both business energy buyers and generators in recent years.
For consumers, the Balancing Services Use of System (BSUoS) charge they pay as part of their energy bills has continued to rise.
Although embedded generators have traditionally benefitted from payments from the charge, they are now increasingly having to contribute towards it, especially in areas such as the North of Scotland.
One of the factors which influences who pays and who receives the charge is whether trading units, particularly Grid Supply Points (GSPs), are delivering to the transmission system or off-taking - known as the Trading Unit Delivery Mode (TUDM).
Until 2013 the TUDM for all GSP Groups in Great Britain was almost always off-taking but in recent years it has increasingly been “delivering.” With rising levels of embedded generation, ‘flipping’ of TUDMs is occurring more often because when output is high in particular areas, electricity may have to be exported onto the transmission network rather than used within the local distribution system.
Given the increasing impact BSUoS has, it is important that everyone in the industry has a clear view of how it is calculated, who is paying it and who is receiving it as a benefit.
Last year SmartestEnergy proposed a modification to the industry code to ensure customers have ready access to information on whether trading units are delivering or off-taking in each settlement period.
Our proposal (known as the P321 modification) was accepted and Elexon - which manages the electricity trading arrangements – has already started to publish regular reports providing detailed information ahead of full implementation of the new service next June.
We believe this is an important development as it will help ensure a level playing field when generators are looking at power purchase agreements.
Until now generators and investors haven’t had sufficient knowledge of the process to make use of it. Greater insight will help them be able maximise embedded benefits from their assets which in turn will help with balancing of the network.
Read more about P321 here