Innovation and developments in the industry
This page outlines a range of developments taking place within the electricity industry which ELEXON is either promoting or participating in. The developments extend beyond our core role of managing the BSC but offer an insight into where the industry might be heading and how we can support these developments with our experience and expertise.
We have been working with and support developments throughout the electricity industry as a way of finding innovative solutions to key issues. ELEXON has been working with organisations such as Innovate UK, BEIS, Energy Systems Catapult and Ofgem. We have offered our impartial expertise and provided a view on the technologies which we share with the industry.
We have already seen technologies and business models including blockchain, peer to peer trading, EVs (smart charging and vehicle to grid) and battery (or other) storage.
ELEXON produce a number of insight articles each year, usually prompted by significant events or changes within the electricity industry. Our authors are known for their impartiality, experience and knowledge and have access to a large amount of data to support their findings or comments.
About project TERRE
Project TERRE, Trans European Restoration Reserve Exchange, is part of the implementation of the European legal Guideline on Electricity Balancing.
There are eight European Transmission System Operators (TSOs) currently participating in Project TERRE, including National Grid, and those from France, Spain, Portugal, Switzerland, Italy as full members and from Ireland and Greece as observers.
TERRE will be a system by which these TSOs can do joint balancing of generation and demand using a common set of bids and offers. As the introduction of TERRE is likely to have significant consequential impacts on the BSC and Grid Code, National Grid has raised BSC Modification P344 to define and approve the BSC impacts.
National Grid raised P344 on 1 June 2016. Project TERRE will enable National Grid to participate in a European market for balancing services, and for European balancing service providers to provide services to National Grid. This will be enabled by a common platform used by TSOs from across the TERRE operating area.
Modification P355 seeks to introduce a new BM Lite classification to allow smaller generators to offer energy to the System Operator for energy balancing, in competition with the larger BM Units already in the market.
BM-Lite will enable smaller generators and aggregators to participate in the balancing mechanism, using BM-Units to combine and offer their services without needing to rely on a supplier.
P355 was raised by PeakGen on 21 June 2017. The Initial Written Assessment was presented to the BSC Panel and the first Workgroup meeting was held on 2 August 2017.
The Proposer contends that under the current BM, it is difficult for smaller parties to compete directly with larger generators for the provision of energy to the TC, as the GB System Operator (SO), for balancing. This is because there is a lack of access to the BM for smaller plants in a way that would allow them to compete on a level playing field with larger power stations.
- Modification P355 is currently on hold.
This is because the proposer believes the benefits will now be delivered by Modification P344, Project TERRE. P355 will be revisited in June.
Electricity Market Sandbox
ELEXON have started work to implement a sandbox, supporting innovative business models into the electricity market and removing barriers in the BSC.
The sandbox will provide a route to apply to the BSC Panel for temporary derogation of BSC obligations. It will also provide applicants with advice on operating within the BSC.
We hope that by enabling more efficient testing the sandbox will reduce time and cost of bringing innovative products into the energy market, and we also hope to learn more about how the market is changing.
We want to make sure the BSC is not a barrier to innovation, and that the BSC and ELEXON can adapt to the future of energy markets and the challenges that change might bring.
To enable the BSC Panel to grant derogations, we are progressing Modification P362. We hope to have the Modification complete and approved by Ofgem in Summer 2018 with sandbox go-live following immediately.
We would encourage companies interested in trialling innovative energy market products in the near future to get in touch to help us shape what we can offer you.
Future Power Systems Architecture initiative
ELEXON is engaging with the Energy Systems Catapult on their Future Power Systems Architecture (FPSA) work.
The FPSA aims to develop a structure for future energy markets, accounting for new interactions between electricity, gas, and other sectors such as heat and transport. The proposals outline new organisational models and new ways of developing rules and regulations for a future market.
ELEXON have met with both InnovateUK and Energy Systems Catapult to provide our comments on the Future Power Systems Architecture initiative (a programme of work that is taking a holistic and whole-system approach to the evolution of the energy system architecture).
ENA Open Networks
ELEXON has been engaging with the Energy Networks Association (ENA) Open Networks project to help define the role of Distribution System Operators (DSOs) in the future electricity markets.
This work explores the frameworks and principles that Distribution Network Operators (DNOs) could use to manage their networks more efficiently, reducing costs in the future.
ELEXON are providing expertise from our history of operating markets, and our understanding of the arrangements underpinning the current electricity market structure. We believe that by combining ELEXON’s market governance and operation expertise with DNO knowledge and experience of operating distribution networks, we can deliver the best outcome for consumers with the DSO transition work.