BSC Insights: How Covid-19 has affected estimated data in Settlement
We monitor Supplier Performance in relation to the volume of estimated and actual data in Settlement. In this insight article, our Analysis and Insight Delivery Lead, Emma Tribe looks at the impact COVID-19 had on Supplier Performance during the first lockdown.
Estimation in Settlement
Elexon calculates how much electricity an energy supplier has used or generated every half hour from aggregated electricity meter reads. We then use the volume of electricity attributed to each Supplier to calculate trading charges, which is how much each BSC Party owes, or is owed through the Settlement process. Elexon also passes the data on to other industry bodies who use the volumes in their own billing.
It isn’t possible to always base the calculated electricity volumes on actual meter reads, hence estimated reads are used. The volume and billing calculations are done multiple times, with the first full calculation and billing approximately a month after the Settlement Date and the final calculation approximately 14 months after. Each time the volume and billing calculations are done is called a Settlement Run, the approximate timings of the five main Settlement Runs are:
- Initial Settlement Run (SF) ~ 1 month
- First Reconciliation Run (R1) ~ 2 months
- Second Reconciliation Run (R2) ~ 5 months
- Third Reconciliation Run (R3) ~ 7 months
- Final Reconciliation Run (RF) ~ 14 months
With each reconciliation Settlement Run the electricity volumes are based on more actual meter reads and less estimated reads. The current industry standards are that by the RF run 97% of energy from Non Half Hourly (NHH) sites has been calculated with actual meter reads and for Half Hourly (HH) sites 99% of energy has been calculated from actual meter reads by the SF Run.
Half Hourly performance
Half Hourly sites either send meter readings for electricity volumes to a Half Hourly Data Aggregator (HHDA) or have their meters read by a Half Hourly Data Collector (HHDC). These sites record a volume of energy for each half hour Settlement Period for use in Settlement. They represent 1% of electricity meters, but record more than 50% of the volume of electricity in Great Britain.
Estimation guidance
As a result of initial Government measures to manage COVID-19, Suppliers could not obtain some meter reads because they could not access HH customer sites if they were closed. Missing reads are automatically substituted with historic data in the Settlement process. However, as COVID-19 resulted in a major reduction in demand, using historic data would not have accounted for this reduction.
To help Suppliers the BSC Performance Assurance Board (PAB) allowed derogations from code rules so that estimates of the reduction in consumption at HH sites could be used in Settlement. Elexon issued guidance to this effect. The derogations came into force on 3 April 2020.
First lockdown performance
For Settlement Dates between 3 March 2020 and 1 April 2020 the HH market performance for the SF run dropped from 98.77% to 95.33%. The 3 March 2020 SF Settlement Run calculations were run on the 24 March 2020, which was the first day of the national lockdown in Great Britain. The lockdown restrictions began to ease on 13 May 2020, however HH performance had already began to improve as contingency provisions were put into place.
During lockdown, the HH market performance at SF never went below 95%, the minimum percentage of energy settled on actual reads at SF was 95.01% for 28 April 2020, and the SF run for this Settlement Date was 20 May 2020. For the R2 run performance has remained above 97.5%.
Many HH site do not require site access to obtain meter reads, certain types of meter can send and receive information remotely.
Market performance: January 2019 – August 2020
The graph below shows the percentage of energy from actual data for Half Hourly sites for each Settlement Run. The graph can be filtered to show different Settlement Run Types.
By clicking either ‘View by Settlement Date’ or ‘View by date of Settlement Run’ you can change the x-axis, where the Settlement Date is the date that the energy was consumed or generated and date of Settlement Run is the date that the Settlement calculations were run.
The BSC PAB monitors the percentage of estimated energy in the HH market and Suppliers that are struggling to meet their performance targets. For Settlement dates prior to 1 March 2020, 55.19% of HH Suppliers met the 99% target at the initial (SF) Run, by having 99% of HH energy volumes from site they supply calculated from actual reads. Since 1 March 2020 that has dropped to 31.83% of HH Suppliers.
Non-Half Hourly performance
Non-Half hourly sites are more likely to be people’s homes or small to medium businesses. These sites either send meter reads to a Non Half Hourly Data Aggregator (NHHDA) or a have their meters read by a Non Half Hourly Data Collector (NHHDC).
Non Half Hourly sites do not record a volume of energy for each half hour to be used in Settlement. Instead, an Estimated Annual Consumption (EAC) or Annualised Advance (AA) are calculated, which represent the customer’s estimated or actual annual electricity usage. The Supplier Volume Allocation Agent (SVAA) then combines the EACs and AAs with energy usage profiles for the time of day and time of year to calculate an electricity volume for each Supplier for each half hour Settlement Period.
The performance target for Suppliers NHH energy relates to what percentage of energy is calculated from AAs rather than EACs. The targets are:
- For 97% of energy to be Settled on AA’s by the RF run
- For 80% of energy to be Settled on AA’s by the R3 run
- For 60% of energy to be Settled on AA’s by the R2 run
- For 30% of energy to be Settled on AA’s by the R1 run
There is currently no target for a percentage of energy to be Settled on AA data by the SF run. These targets are much lower than the targets for HH sites, as it is more difficult to collect regular meter reads for NHH sites.
The impact of Covid-19 on NHH Settlement Performance can be seen more clearly by viewing the percentage of energy Settled on AA’s by date of the Settlement Run, rather than by Settlement Date. This is because the majority NHH energy isn’t settled on AAs until five months after the Settlement Date. Not being able to get a meter read for a site in April 2020 could affect the NHH Settlement Performance for February 2020 Settlement Dates at the R1 run, December 2020 Settlement Dates at the R2 run, September 2019 Settlement Dates at the R3 run and February 2019 Settlement Dates at the RF run.
The percentage of energy Settled on AAs for R2 Settlement Runs carried out in March 2020 was 75.49%, compared to 68.84% for Settlement Runs in July 2020. The performance at the R2 run has improved since July 2020, for Settlement Runs in October 2020 the market performance was 72.33%.
For the RF runs in March 2020, 96.84% were Settled on AAs and in July 2020, 96.03% were Settled on AA’s. The Settlement Performance at the RF run has continued to decrease slowly, with performance 95.49% for Settlement Runs in October 2020.
While there has been more estimated NHH energy in Settlement for Settlement Runs that took place after the start of lockdown, the total volume of energy Settled on AA’s has remained above the performance targets for R1, R2 and R3. For the RF run NHH Settlement Performance has managed to remain above 95%.
Estimation guidance
On behalf of the BSC PAB, Elexon provided guidance for NHH estimation during Covid-19 this primarily addressed estimation for NHH non-domestic customers whose energy usage may have reduced because of Covid-19 restrictions.
Market performance: March 2019 – October 2020
This graph shows for each Settlement Run the percentage of energy from AA data for Non Half Hourly sites. The graph can be filtered to show different Settlement Run Types, and by clicking either view by Settlement Date or view by date of Settlement Run you can change the x-axis. Where Settlement Date is the date that the energy was consumed or generated and date of Settlement Run is the date that the Settlement calculations were run.
There is a dip seen in performance for all Settlement Run Types, for Settlement Runs on 15 July 2020, this was because of a data issue that has since been corrected.
Return to ‘normal’ operation
At its September meeting, the BSC PAB agreed that the derogations introduced to help Suppliers during COVID-19 restrictions should end on 31 December 2020 and issued a three month notice period to the industry. After the government announcement of a second lockdown for England, Elexon recommended to the BSC PAB that the three month notice to industry should be cancelled. The BSC PAB agreed to this recommendation, and the new end date for the derogations has yet to be determined.
The BSC PAB have been monitoring Settlement Performance through the Performance Assurance Risk Report which is produced each month by Elexon’s Assurance team and has been updated to include COVID-19 specific measures. This report was made public for the first time so that anyone can view the impact COVID-19 has had on Settlement Performance.
The analysis and monitoring undertaken by Elexon on Settlement Performance has not indicated any significant issues to date. Despite particularly challenging circumstances and a lack of access to actual meter reads at both NHH and HH sites, there has not been a dramatic fall in Settlement performance. This shows the resilience of the electricity Suppliers we work with and will continue to support.
The accuracy of electricity volumes calculated for Suppliers has been particularly important during COVID-19 restrictions as the electricity demand changed. Maintaining settlement accuracy ensures that energy Suppliers are not being left out of pocket or unfairly charged for estimated electricity volumes that are not reflective of the change in usage.
Data used in this article
The data shown in this article here has been simplified and is for information only and may not match the latest performance management reporting.
Performance management reports can be found on the monthly PAB meeting pages.
Latest COVID-19 updates
See the latest updates regarding how COVID-19 is impacting Elexon and the BSC.