Virtual Lead Parties to offer services in the wholesale electricity market

Ofgem has today (6 October 2023) approved Balancing and Settlement Code Modification P415 ‘Facilitating access to wholesale markets for flexibility dispatched by Virtual Lead Parties’.

What are Virtual Lead Parties?

Virtual Lead Parties are aggregators that work on behalf of electricity generators and consumers to offer balancing services for the electricity system. Currently VLPs can only offer services in the Balancing Mechanism.

When will P415 be implemented?

P415 (scheduled for implementation in November 2024) will allow VLPs to also offer services in the wholesale electricity market.

An important breakthrough for flexibility providers

Elexon’s Chief Executive, Peter Stanley said: “We recognise the important and growing role flexibility has in electricity markets. Approval of P415 is an important breakthrough as it will give flexibility providers access to wholesale markets to realise the value of flexible assets.

“In 2019, Elexon opened up the Balancing Mechanism to independent aggregators by creating the Virtual Lead Party role. Since then, we have delivered successive changes to the BSC which create more opportunities for these companies to compete in the provision of balancing services.

“We are excited to be implementing P415 on the Elexon Kinnect platform. In parallel, we will continue to work with industry and Ofgem to progress proposals for the associated compensation mechanism in the Balancing Mechanism for Suppliers and VLPs, in cases where Suppliers’ volumes are adjusted by VLPs.”  

Find out more about P415

• See our P415 webpage for all the background information on the change
• See Ofgem’s decision letter approving P415