Understanding Applicable Balancing Services Volume Data for Secondary BM Units
This article explains how Applicable Balancing Services Volume Data (ABSVD) is treated in Settlement for Secondary Balancing Mechanism (BM) Units. We are publishing this following a question from a VLP around why an Imbalance Charge was not calculated for them after National Grid ESO (NGESO) submitted ABSVD values for their Secondary BM Units.
What are Secondary BM Units?
Secondary BM Units were introduced by BSC Modification P344 to allow Supplier Volume Allocation (SVA) registered customers and Generators to participate in the Balancing Mechanism through an independent aggregator.
Independent aggregators wishing to make use of the P344 solution are required to accede to the BSC in the role of Virtual Lead Party, and can then register Secondary BM Units and allocate SVA Metering Systems to them.
The principle behind the P344 solution is that the VLP is responsible only for Trading Charges relating to participation in the BM. The customer’s Supplier remains responsible for all other Trading Charges, including Imbalance Charges (with the exception of any Imbalance Charges arising from non-delivery by the VLP of a Bid or Offer).
What is ABSVD?
ABSVD is a mechanism for ensuring that Lead Parties are not exposed to Imbalance Charges when assets within their BM Units deliver certain Balancing Services to National Grid.
Details of which Balancing Services are subject to ABSVD are contained within the ABSVD Methodology Document, which NGESO is required to establish in accordance with Standard Condition C16 of the Transmission Licence, and which is published on the NGESO website.
Subject to the provisions of the ABSVD Methodology Document, NGESO may submit ABSVD for BM Units or for Metering System Identifier (MSID) Pairs.
This is in accordance with BSC Section Q6.4:
- An ABSVD volume submitted for a BM Unit (BM Unit ABSVD) will be applied as an adjustment to the Imbalance Volume of the Lead Party for that BM Unit
- An ABSVD volume submitted for an MSID Pair (non-BM ABSVD) will be applied as adjustment(s) to the Imbalance Volumes of the associated Import MSID and/or Export MSID (depending on which was affected by delivery of the Balancing Service)
What does this mean for Imbalance Volumes?
Settlement systems will adjust Suppliers’ Imbalance Volumes for non-BM ABSVD irrespective of whether a VLP has allocated the MSID Pair to a Secondary BM Unit.
However, any BM Unit ABSVD submitted for a Secondary BM Unit will not result in an Imbalance Adjustment for the VLP. This is consistent with the BSC rules for calculating Imbalance Volumes, and the intention of Modification P344 (that VLPs should not be responsible for customers’ Imbalance Charges, except where these arise from Non-Delivery of a Bid or Offer).
VLPs should be aware that NGESO may notify Settlement of BM Unit ABSVD for Secondary BM Units where required to do so by the ABSVD Methodology Document. In accordance with BSC rules, this notification will not lead to an adjustment of Imbalance Volumes (for the VLP, or for the Supplier(s) of the customers providing the Balancing Service).
Help and support
If you have any questions, please speak with your Elexon Operational Service Manager (OSM), or email [email protected].