Modification P379 is withdrawn but learnings can support future change
Modification P379 ‘Multiple Suppliers through Meter Splitting’ has been withdrawn by the proposer after independent analysis of the proposal showed that the costs for implementing it would significantly outweigh the benefits.
Multiple Suppliers through the same meter
P379 proposed to change the BSC so that meters can account for two or more different electricity suppliers or more than one consumer of electricity. For example, if a consumer leases an electric vehicle, the electricity to charge it could be assigned to the lease company and separated from the rest of the consumer’s household consumption, which the customer would pay for themselves. If P379 had been implemented it would have resulted in a dramatic change to the way the retail electricity market operates.
The change, originally raised in early 2019, was withdrawn by the proposer, GridBeyond, following the presentation of analysis by consultants CEPA, at the BSC Panel’s February meeting. The Panel requested the analysis given the major impact that P379 would have on the sector.
Outcomes of P379 could be delivered by other changes to the BSC
CEPA found that some of the desired outcomes from P379 would already be delivered through other BSC changes, which will contribute towards opening up markets to new competitors, and paving the way for net zero.
They include:
- P375 ‘Metering behind the Boundary Point’ which has been approved by Ofgem for implementation in June 2022. This is a significant change which will result in the activity of smaller asset owners such as storage, and small scale renewables to be visible in Settlement. Greater visibility of this activity will also help Local Distribution System Operators to dispatch assets with greater control and efficiency.
- P376 ‘Utilising a Baselining Methodology to set Physical Notifications’ which is in the assessment procedure
- P415 ‘Facilitating access to wholesale markets for flexibility dispatched by Virtual Lead Parties’, (also in the assessment procedure)
- Market Wide Half-Hourly Settlement (MHHS)
Costs to introduce P379 currently outweigh the benefits
CEPA found that the costs of P379 over a ten year implementation period exceeded an uncertain, and low benefits case. These costs would filter through to customer bills, and therefore it is unlikely that implementing P379 would be in the best interests of customers.
However, one of the conclusions from the CEPA report is that reconsidering the case for multiple Suppliers in approximately five years could be worthwhile. The sector will continue to go through rapid changes and these may change the costs and benefits of P379. A five-year checkpoint would also allow time for MHHS and use of smart meters to bed in, and for electric vehicle and heat-pump use to become more prevalent.
We believe that innovative proposals are needed to support progress to net zero and the BSC provides a route to test new solutions and assess their merits, based on the evidence available. The BSC Sandbox, where innovators can trial concepts without needing to meet the usual BSC rules is now available for use.
Thank you to industry parties that supported development of P379
We worked closely alongside GridBeyond and the former proposer, New Anglia Energy, to develop P379 through widely attended industry work groups. We would like to thank all industry parties for their dedication and insights that have supported the process. The result of this was a framework solution for the change which CEPA could then assess.
Lessons learned from the process can help support future changes
There are important learnings from the development process for P379, which Elexon now plans to compile and publish. These lessons include elements of the customer experience that would be affected by having multiple Suppliers, and what changes might be needed in the wider policy environment before some of the benefits cases envisaged under P379 could be realised
We hope these learnings will assist in development and proposals for future BSC changes and wider energy policy. For example, industry systems and processes may be more able to accommodate the type of meter splitting functionality set out in P379, once MHHS is implemented.
We will maintain the framework solution developed under P379 for future use, increasing the speed with which we may be able to design BSC changes in the future.