BSC Insights: How we use the Annual Demand Ratio to maintain accuracy of Settlement data
In this insight article Mehdi Jafari and Jason Jackson explain what the Annual Demand Ratio (ADR) is, how it helps us maintain the accuracy of Settlement data, and what we are doing to resolve potential errors indicated by the ADR.
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What is the ADR?
The Annual Demand Ratio (ADR) is one of the key indicators provided by Elexon to outline potential over or under-accounting of energy generation or consumption. While the ADR cannot provide specific root causes for potential errors, when leveraged in conjunction with other tools it supports the identification and resolution of specific Settlement errors.
The ADR is a measure of the variation between the total annual profiled Non Half Hourly (NHH) consumption and the total annual metered NHH consumption, and is calculated per GSP Group. It provides a high-level indication of the overall performance of the NHH Supplier Volume Allocation (SVA) market and identifies any significant under or over-accounting of energy generation or consumption.
The ADR is also a measure of the accuracy of Settlement data at a GSP Group level, hence an ADR value is calculated per GSP Group.
As an annualised indicator, the ADR is not a timely indicator of potential errors. Therefore, Elexon also uses a number of more timely measures in order to identify potential errors, including Technical Assurance Agents (TAA) findings, investigation of Transmission Losses Multipliers (TLMs), GSP Group Correction Factors and the ADR.
Why is the ADR important?
Elexon takes Settlement accuracy extremely seriously due to the impact Settlement errors can have on our customers. This is why Elexon has a dedicated team of experts working to investigate all potential errors highlighted by these indicators.
Elexon are also working closely with the Central Data Collection Agent (CDCA) and industry stakeholders including Central Volume Allocation (CVA) Meter Operator Agents (MOAs), Registrants, Distribution Network Operators, Transmission Operators and Electricity System Operator in order to promote cooperation and the effective operation of controls to ensure Settlement errors are identified and resolved as quickly as possible.
What data is used in the ADR calculation?
The ADR takes into account two annual data sources, which are detailed below.
Yearly Metered NHH Consumption
For a particular GSP Group, the GSP Group Metered NHH Consumption (MNHHC) is equal to the GSP Group Take minus the net value of HH consumption (HH Import – HH Export) within the GSP Group. The GSP Group Take is calculated based on actual HH meter reads and shows the energy flowing into a GSP Group.
This incoming electricity can come from the transmission system, adjoining GSP Groups or through embedded generation. Adding up MNHHC values from all Settlement Periods in a year gives the Yearly MNHHC (YMNHHC).
Yearly Profiled NHH Consumption
A GSP Group’s NHH Consumption is calculated by adding up all NHH Metering Systems’ metered data for the relevant Settlement Period. As data used per Settlement Period comes from the Profiling process, the result is known as Profiled NHH Consumption (PNHHC). Adding up PNHHC values from all Settlement Periods in a year gives the Yearly PNHHC (YPNHHC).
How the Annual Demand Ratio is calculated?
The Annual Demand Ratio is the YMNHHC divided by the YPNHHC. So it is the annual sum of NHH Consumption from the metered data of a GSP Group divided by the sum of NHH Consumption from the profiled data of a GSP Group.
The graph below shows the ADR, the YMNHHC and the YPNHHC since 2016. Whilst the theoretical ‘ideal’ value of ADR is 1, variations of +/- 1.5% are expected.
The graph demonstrates how an increase in the difference between the YMNHHC and the YPNHHC can cause fluctuations in the ADR and for the figure to move further away from the ‘ideal’ ratio of one, which can indicate Settlement Errors. This is particularly prevalent in the graph for GSP Group _P.
What do variations in the ADR indicate?
An ADR that has gone out of the expected thresholds indicates that there is an issue with the data. An ADR value less than 1 indicates that there has potentially been:
- An over-accounting of import energy in SVA
- An under-accounting of export energy in SVA
- An under-accounting of Grid Supply Point (GSP) metering.
An ADR value greater than 1 indicates that there has potentially been:
- An under-accounting of import energy in SVA
- An over-accounting of export energy in SVA
- An over-accounting of GSP metering.
How does the ADR fluctuate between Settlement Runs?
The graph below shows how ADR has changed since July 2017 on a daily basis, in each Settlement Run. The date slicer at the bottom right of the graphs allows for adjusting the time window depicted.
As more accurate data comes in after SF Run, the ADR tends return to the expected figures between 0.985 and 1.015 shown in dashed lines over the subsequent Settlement Runs.
There is also an option to see the ADR graph calculated from the latest Settlement Runs. You are also able to individually filter by GSP Group to the graph in a larger format.
What causes ADR deviations?
The root cause of the ADR deviations has often proven to be from HH Metering Systems that contribute to the calculation of the GSP Group Take which in turn contributes to the YMNHHC part of the ADR.
The graph below shows an example of how an issue in a GSP Metering System (NEWX_6) resulted in deviation of the ADR in GSP Group _C form late June 2021. When the GSP Metering System’s metered volume starts to fall, it causes a decrease in the YMNHHC ADR, which caused a downward deviation in the ADR.
The issue was found upon Elexon’s investigations and fixed and as the graph suggest, from June 2022 the ADR is returning back to the expected thresholds.
Current investigations into ADR deviation
As the graphs above suggest, there are a few GSP Groups for which the ADR has been deviating from the thresholds.
The ADR itself has been in place since the beginning of the BETTA (British Electricity Trading and Transmission Arrangements) and has been routinely monitored and published by Elexon during this time. Intermittently over the years, focus has been placed on investigating potential issues indicated by the ADR where one or more GSP Groups have exceeded the defined tolerances at the R2 Settlement Run.
Elexon are now seeing unprecedented levels of deviation in respect of ADR in multiple GSP Groups. As such, we have been actively investigating potential errors indicated by the ADR since February 2021.
Following the large Settlement Errors in _A, Elexon established an expert group called the Settlement Accuracy Task Force. They meet on a weekly basis to review relevant indicators and analytics including the ADR, change point analytics, reports from industry participants, Supplier Volume Allocation Agent (SVAA) Data Aggregator (DA) volume threshold flags, Group Correction Factors (GCF) and TLM to identify potential threats to Settlement accuracy.
The group uses the intelligence provided by these metrics to determine the most valuable actions to be taken by the group in the following week to progress our investigations. During these meetings, priority is given to actions believed to have the greatest probability of identifying and resolving the largest potential Settlement errors indicated by available data.
Actions assigned by Elexon to progress investigations
Elexon’s Settlement Accuracy Task Force also reviews all GSP change points identified by our GSP change point analytics tool and assigns the following actions as appropriate:
- Opposite but equal change in other GSPs or Distribution System Connection Point (DCSP) for same date
- An increase or decrease in consumption or generation for embedded Balancing Mechanism Unit (BMU) in that GSP Group
- Comparison of metered volumes to Generation Capacity (GC) values
- Validation of whether estimation in GSP is causing change
- Changes in SVAA export volumes
- Changes in volumes between Settlement Runs
- Look at Large Estimated Annual Consumption/Annualised Advance (EAC/AA) Reporting and identify movements
- Changes in SVA/CVA estimation (volume and frequency) at GSP Group level
- Any changes in Unmetered Supply (UMS) through monitoring and identifying movements
- Energisation Status & Disconnections
- Line Loss Factor (LLF) data quality and if it is outside of the ADR threshold
- Look at latest Theft Risk Assessment Service (TRAS) data to identify any Energy theft
- Run the Transmission Losses monitoring process
- Identify any new sites (new GSP, new DCSP, new Embedded BMU)
- Identify any new circuits at existing sites (GSP, DCSP, Embedded BMU)
- Identify any changes to existing sites (GSP, DCSP, Embedded BMU)
- Look for any emails/communications about potential changes
- Identify any breaches of Generation Capacity or Demand Capacity (GC/DC) data
- Check against fault log for existing faults
- Speak to Registrants to get the latest Single Line Diagram (SLD)
- Request current Aggregation Rules & Meter Technical Details (MTDs) from the CDCA
- Compare the SLD to current Aggregation Rules & MTDs
- Look for any emails or other communications for Dispensations
- Contact Registrant to make them aware of potential issues and ask if they are aware of any site work or other potential causes
- Contact Transmission Owner to make them aware and ask if they are aware of any site work or other potential causes
- Contact MOAs to make them aware and ask if they are aware of any site work or other potential causes
- Flag issue to appropriate forums such as the Imbalance Settlement Group (ISG), Supplier Volume Allocation Group (SVG) or Commercial Operations Group (COG)
Other actions being taken to progress investigations
In addition to our ongoing investigations and the work being done by Elexon internally, we have also been working to improve engagement and cooperation with and amongst CVA stakeholders. We have held a number of workshops and calls and taken actions to help improve communication among those stakeholders and with Elexon.
Elexon has also recommended the establishment of a Performance Assurance Board (PAB) sub-group, membership for which will comprise representatives from the above mentioned CVA stakeholders as well as the CDCA and the PAB.
The PAB sub-group will focus on the review of existing processes and controls to ensure they are being operated effectively as well as identification of key operational challenges contributing to delays in the identification and resolution of Settlement errors.
Elexon is also working with Western Power Distribution (WPD) to progress the BSC Issue they have raised on behalf of the Distribution Network Operator (DNO) community which will look at the existing governance arrangements with a view to identifying improvements to facilitate the timely resolution of Settlement errors in the future.
The Issue Group will focus on potential BSC Changes required to reduce risk to the Accuracy of Settlement and where the existing governance arrangements could be presenting challenges to the resolution of Settlement errors.