About the BSC
This is a high level explanation of the New Electricity Trading Arrangements (NETA) that were introduced in England and Wales in March 2001 and the Balancing and Settlement Code which is administered by Elexon on behalf of the industry.
The Balancing and Settlement Code
The balancing and settlement arrangements and their governance are enshrined in the BSC (collectively known as the BSC arrangements). The requirement to have the BSC in force is placed on National Grid through its Licence.
It is a condition of a Generation and Supply Licence that licensees are bound by the BSC, and that they must become BSC Parties by signing the BSC Framework Agreement (which gives contractual force to the BSC).
Other parties who are not licensees have the option to sign the BSC Framework Agreement, which provides them the right to notify energy contract volumes and register BM Units (if they are Interconnector Users or licence exempt). This exposes them to any charges and payments that result.
The BSC also defines the obligations on Elexon, the Balancing and Settlement Code Company (BSCCo), in providing or procuring the services necessary to operate the BSC arrangements efficiently, and establishes the BSC Panel and defines its various responsibilities.
A set of subsidiary documents including Balancing and Settlement Code Procedures (BSCPs), Communications Requirements and the Data Catalogues are referenced by the BSC, and compliance with these is also a condition of the BSC. Other parties are recognised by the BSC.
The Transmission Company has many obligations under the BSC and is itself a Party to it. Also the roles of various Agents are described – these Agents are not Parties to the BSC but are appointed, either by Elexon or by BSC Parties, to fulfil certain functions.
Agents to the BSC include the Settlement Administration Agent (SAA), Central Data Collection Agent (CDCA), Energy Contract Volume Aggregation Agent (ECVAA) and the Funds Administration Agent (FAA), and these functions are performed under contract to Elexon. Party Agents include the Energy Contract Volume Notification Agents (ECVNAs) and Meter Volume Reallocation Notification Agents (MVRNAs) that notify bilaterally contracted volumes on behalf of Parties.
Other Party Agents, specific to those Parties that are Suppliers, are Half-Hourly and Non-Half-Hourly Data Collection, Data Aggregation and Meter Operator Agents. Together with Suppliers, these go to make up the ‘Supplier Hubs’, an important element of the arrangements for the metering of domestic and commercial customers, whereby consumption in each Half-Hourly Settlement Period can be determined either using a Half-Hourly meter or using a ‘demand profile’ which apportions Non-Half-Hourly metered consumptions to individual Settlement Periods.
Distribution Companies are also bound by the BSC, essentially for the provision of certain metered data.
Changes to the BSC
A significant aspect of the BSC arrangements is the ability for those arrangements to evolve as improvements and new requirements emerge. Accordingly, the BSC has mechanisms for the consideration, approval and incorporation of changes, known as Modifications Proposals.