ELEXON insights: white paper on multiple providers
Jon Spence’s white paper offers an ELEXON view of how BSC central services could be adapted to offer Settlement solutions in support of individual customers buying electricity from more than one supplier.
Published: April 2018
This paper proposes that ELEXON’s Supplier Volume Allocation (SVA) arrangements should be changed to recognise the right of customers to buy electricity from (or sell electricity to) other parties (not necessarily licensed Suppliers).
This is in addition to their ‘main’ or ‘default’ Supplier, who would continue to be responsible for metering and data collection/data aggregation activities under the BSC. Where a customer does this, the main Supplier’s Energy Imbalance position would be amended (to remove the volume for which another party is responsible), and the main Supplier would be notified of the volume (in order that they can adjust their customer billing).
It is expected that the main Supplier would want to share these adjustments with the customer, by way of a consolidated bill for information purposes. This would show the volume (but not the cost) of energy bought from other Suppliers.
We believe that relatively straightforward amendments to BSC central services (building upon the changes we will be delivering in 2019 to open the Balancing Mechanism to independent aggregators) could form the basis of new industry arrangements that allow customers the flexibility to buy electricity from multiple providers.
The BSC central services should be modified to allow the volumes allocated to Suppliers to be adjusted in support of customers buying energy from (or selling to) parties other than their main retail market Supplier. ELEXON is working with Ofgem, innovators and industry participants to explore these changes further.
The re-platforming of BSC central services provides the opportunity to deliver flexible peer-to-peer and multiple Supplier solutions in shorter timeframes than would otherwise be possible.
Our proposal is to introduce a new role within the BSC, that of a Customer Notification Agent (CNA). This role would be carried out by the commercial facilitators of local energy, EV or appliance with power, peer-to-peer or rapid switching schemes.
Alternatively, it could be carried out by the technology platform providers for these schemes. The CNA would be a facilitator rather than an active energy trader, so would not need to be licensed, but platform users would need to be Suppliers or licence exempt.
The CNA role would be a narrow one. It would notify BSC central services of the Metering Systems for the customers, generators and suppliers involved in energy trades under the relevant scheme.
It would then notify the associated energy volumes, along the same lines as an Energy Contract Volume Notification Agent (ECVNA). Unlike an ECVNA they would need to be authorised by the licensed (or exempt) Supplier whose trades that are notifying, rather than by the default Supplier.