Glossary

Second BSC Sandbox trial to increase opportunities for flexibility services will launch in September

Centrica is due to begin a trial this September where controllable storage heaters will provide demand-side response (DSR) when needed, by dialling down their demand. 

It is the second trial which has been approved by Ofgem to use Elexon’s Balancing and Settlement Code (BSC) Sandbox. The Sandbox allows innovators to trial concepts in a live market environment without having to meet all the usual BSC rules.

Trial will involve up to 2.5MW of storage heating capacity

Centrica’s proposal will involve the company participating in the Balancing Mechanism (BM) as a Virtual Lead Party (VLP), a role which Elexon and National Grid ESO created in 2019. The VLP role allows independent aggregators to offer services in the BM.

In partnership with Glen Dimplex, the trial will initially bring forward a maximum of 2.5MW of storage heater assets in social housing across sites which have Non Half-Hourly (NHH) boundary meters.

Boundary meters are used at boundary points where sites (which include ones that are complex and have multiple uses) connect to a distribution network. These meters measure electricity flows to and from assets on these sites.

Volumes from reduced demand will be validated in Settlement

The BSC rules currently require that a site is settled half-hourly in order for a VLP to operate assets located there. However, the derogation from the BSC rules will allow Centrica to submit information into Settlement stating when storage heaters have reduced their demand, as if the site had been settled half-hourly at the boundary meter. They will do this by using data from meters in the storage heaters to provide half-hourly data in lieu of data from the boundary meter.

Elexon will make sure that the electricity volumes resulting from reduced demand from the heaters are properly validated.

Benefits could include lower tariffs for customers

From 2023, Market-wide Half Hourly Settlement (MHHS) implementation will require that electricity generation and use by customers with Half-Hourly capable boundary meters at their sites are settled using half-hourly readings. The upgrading of boundary meters to achieve this will run through until 2025.

Centrica believes that it can deliver material benefit to consumers participating in the trial during this two year window. These could include reduced tariffs or other benefits such as rent subsidies for customers who are in vulnerable circumstances and also living in social housing.

Reduced costs for system balancing

Elexon believes that the trial will benefit the energy system as a whole by reducing the costs of system balancing, and creating more competition in the provision of services. Before the BSC Panel recommended approval of the trial to Ofgem, Elexon carried out a risk assessment and concluded that overall risks to Settlement and to other BSC Parties was low.

Sandbox is an opportunity to test new concepts

Simon McCalla, Elexon’s Chief Executive, said: “Our Sandbox service is playing an important role in the move to a smarter energy system by giving innovators opportunities to test new concepts. We believe that DSR will play a big part in the transition to a cleaner, more efficient energy system and we are pleased that the BSC can support a trial which offers new ways for customers to participate in the BM.”

Storage heaters can provide more flexibility to the system 

Stavros Sachinis, Head of Demand-side Response & Smart Energy at Centrica said, “We are delighted to have support from Ofgem and Elexon to enable Centrica and our partners in the trial, Glen Dimplex, to take a real step forward in accelerating the value of residential flexibility for consumers in the UK and putting households right at the centre of a more sustainable energy system.”

Glen Dimplex has led innovation in thermal energy storage technology for decades, seeking to provision smart electric thermal storage heater technology as a means of providing greater flexibility to the evolving power system, thereby enabling new improved services for electric heating end users.

Muiris Flynn, Chief Technical Officer at Glen Dimplex Heating & Ventilation, said “We are excited to be involved in this forward-thinking project, and look forward to demonstrating a model that offers real benefits to stakeholders throughout the energy supply and use chain. Enabling such functionality facilitates decarbonisation and will reduce costs for electric heating users.”

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