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Overview
The Legal Framework
Condition C3 of National Grid's licence establishes the framework for
modification of the Balancing and Settlement Code (BSC). It provides that the
BSC can only be modified by National Grid, and that National Grid can only
exercise that power if directed to do so by the Authority. The Authority's
power to direct National Grid to modify the BSC is limited to changes proposed
under the procedures set out in the BSC and only where the Authority believes
that the change would better facilitate achievement of the applicable BSC
objectives (set out in National Grid's licence).
The applicable BSC objectives are:
-
The efficient discharge by the Transmission Company of the obligations imposed
under the Transmission Licence;
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The efficient, economic and co-ordinated operation by the Transmission Company
of the Transmission Service;
-
The promotion of effective competition in the generation and supply of
electricity, and (so far as consistent therewith) promoting such competition in
the sale and purchase of electricity;
-
The promotion of efficiency in the implementation and administration of the
balancing and settlement arrangements.
The detailed legal requirements governing Modifications are set out primarily in
Section F 'Modification Procedures' of the BSC.
There is no power for National Grid to modify the BSC without going through the
Modification Procedures. However, the procedures for urgent BSC Modifications
allow the Modification Procedures to be circumvented subject to public law
requirements as necessary in the case of an emergency.
National Grid's licence also sets out a number of requirements which the BSC
Modification Procedures must meet. It therefore lays the foundations of Section
F of the Code. These requirements include:
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Who can propose a Modification;
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Consultation with interested parties;
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Evaluation of the proposed Modification against the applicable BSC objectives;
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Preparation of a Modification Report; and
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Submission of the Modification Report to the Authority as soon after the
Modification Proposal is made as is appropriate and as consistent with the
proper completion of the above steps.
In order to provide assurance to the industry and third parties that their views
will be considered, and to ensure that the objectives of the Code are met, the
Modification steps are described in detail in Section F of the BSC.
Objectives
It is a function of the BSC Panel to implement or supervise the implementation
of the procedures for modification of the Code, and of ELEXON to support the
process. Section F of the Code obliges the Panel to endeavour at all times to
operate the Modification Procedures:
(a) in an efficient, economical and expeditious manner, taking account of the
complexity, importance and urgency of particular Modification Proposals; and
(b) with a view to ensuring that the Code facilitates achievement of the
applicable BSC objectives.
BSC Modification Proposals can be made by any party to the BSC (other than
ELEXON and ELEXON CLEAR), Energywatch, the BSC Panel in limited circumstances
and upon the recommendation of ELEXON or the Trading Disputes Committee, and
any interested third party so designated for these purposes from time to time
by the Authority.
New Modification Proposals are submitted to the next Panel meeting with an
accompanying Initial Written Assessment containing ELEXON's recommendation
concerning the Modification's progression. Both these documents can be found on
the BSC website. The Proposer's representative is invited to introduce their
Modification Proposal at the Panel meeting. Panel meetings are held in open
session whilst Modifications and other non-confidential business are discussed.
Panel agendas, papers and headline reports can be found on the BSC website.
ELEXON will refuse a new Modification only if the mandatory sections of the
proposal form are incomplete.
Definition and Assessment Procedures
When a new Modification Proposal is raised, the Panel has three main options for
progression:
-
The proposal may be submitted to a Modification Group for clarification and
definition where there is insufficient detail in the proposal to enable the BSC
Panel to decide whether to proceed with a detailed evaluation the 'Definition
Procedure');
-
The proposal may (either following a Definition Procedure or otherwise) be
submitted to a Modification Group for a detailed assessment and evaluation of
the proposal, during which an alternative proposal may also be developed by the
Modification Group if it thinks that the alternative would better facilitate
the achievement of the applicable BSC objectives (the 'Assessment Procedure');
-
The BSC Panel may decide to proceed directly to a Modification Report if the
solution is felt to be sufficiently detailed and does not require further
clarification.
The BSC lays down a default maximum timetable for the Definition Procedure (2
months) and Assessment Procedure (3 months). The Panel may deviate from this
maximum timetable where circumstances require, but the Authority has the power
to overrule the Panel's decision. Copies of the Definition and Assessment
Reports can be found on the BSC website.
Modification Groups
The Panel will establish the Modification Groups, drawing from a list of
industry experts, and define their terms of reference. The proposer of the
Modification and National Grid both have the right to appoint one member each.
Details of the meetings of the Modification Groups for each Modification, along
with their terms of reference, can be found on the BSC website. Modification
Group meetings are held in open session.
In setting the terms of reference for Modification Groups the Panel stipulate
the scope and timetable for assessment of Modifications, together with the
expected level of consultation with a broad range of interested parties. ELEXON
holds a list of contacts who are notified by email of new Modification
Proposals, consultations and other information relating to Modifications. If
you would like to be added to this list, please email
change_delivery_admin@elexon.co.uk. Copies of the Consultation
documents and responses can be found in the Consultations
section of this website.
Modification Report
The Modification Procedures culminate in a Modification Report to the Authority,
which contains the Panel's recommendation as to whether the Modification should
be made and their views on an appropriate implementation date. The Report also
contains a summary of all views expressed during any consultations or impact
assessments. The information contained within the Report should be such as to
enable the Authority to decide, consistent with public law requirements,
whether or not to approve the Modification.
Modification Register
To assist interested parties in tracking the progress and status of Modification
Proposals though to implementation, a Modification Register can be found on the
BSC website providing the current status and brief details of each Modification
Proposal. This Register is updated with every change in status.
Implementation of Approved Modifications
The Authority will publish a decision letter in respect of each Modification
Proposal and this can be found on the BSC website.
If the Modification is approved, ELEXON is responsible for overseeing the
implementation of the change in accordance with a project brief submitted to
the Authority as part of the Modification Report.
The Panel is required to provide a monthly update to the Authority on the
progress of Modification Proposals and on implementation of approved
Modifications. This provides the Authority with the opportunity to intervene if
it believes that the timetable set by the Panel for, or the priority accorded
by the Panel to, a particular Modification is inappropriate. This Progress
Report is updated monthly on the BSC website.
Urgent Modification Procedures
Section F of the BSC also contains provisions to circumvent the normal
Modification Procedures as necessary to fit with the urgency of a particular
matter. An urgent Modification Proposal may therefore be progressed by a
different process and timetable. If National Grid and/or ELEXON recommends that
a proposal should be treated as urgent, the Chairman of the BSC Panel will seek
the views of Panel members and consult with the Authority. A Modification
Proposal can only be treated as urgent with the approval of the Authority, who
will direct the process and timetable to be adopted. Provision is made for an
ex post review of implemented urgent Modifications in order to ascertain
whether the change could have been made in an alternative way that would have
better facilitated the achievement of the applicable BSC objectives.
Further Information
If you have any queries on any aspect of the procedures described above, please
e-mail modifications@elexon.co.uk
or contact the ELEXON Helpdesk on 020 7380 4222.