BSC Simple Guides
The Balancing and Settlement Code (BSC) is a lengthy legal document. The following guides provide a good starting point for understanding what each part of the BSC covers.
Acronyms and Defined terms
Words or phrases (other than headings or titles) that are capitalised in these summaries generally appear as defined terms in the BSC (either in Section X or in context in the Section to which they relate).
BSC Framework Agreement
The BSC Framework Agreement is the agreement signed by those members of the Electricity Pool of England and Wales, BSCCo, the Authority and Transmission Company (known as the Original Parties) by which the BSC was made contractually binding the Original Parties in 2000.
The Pool Supplement sets out provisions for final settlement relating to trading under the Pooling and Settlement Agreement (P&SA) up to the introduction of the new wholesale trading arrangements on 27th March 2001; provisions for the satisfaction, performance and discharge of certain other rights and obligations of Pool Members accrued under the P&SA; the arrangements under which provisions in the P&SA are treated as applying between Parties; and the Panel and ELEXON’s roles and responsibility in relation to these matters.
Section A: Parties and Participation
Section A of the BSC deals with Parties and participation. The main issues covered include the capacities that a Party may have under the BSC; the arrangements for admission of new Parties; requirements for Parties to provide information to ELEXON, and to register with the Central Registration Agent (CRA); and provisions for withdrawal and expulsion from the BSC.
Section B: The Panel
Section B covers the establishment of the Balancing and Settlement Code Panel, the appointment and duties of Panel Members, the powers and functions of the Panel, the proceedings of the Panel, Panel Committees, Annual Reports and the Annual BSC Meeting.
Section C: ELEXON and its Subsidiaries
Section C covers the constitution of ELEXON and the obligations of the shareholder of ELEXON; the powers, functions and responsibilities of ELEXON; the management of ELEXON; the relationship between ELEXON and Parties; the Business Strategy and Annual Budget for ELEXON; and Subsidiaries of ELEXON.
Section D: BSC Cost Recovery and Participation Charges
Section D outlines the recovery by ELEXON through BSCCo Charges of BSC Costs, which are the costs that ELEXON incurs in operating the trading arrangements. ELEXON’s costs and the contracted costs of BSC Agents are paid for by BSC Parties as described in Section D of the BSC. The amount each BSC Party pays (Funding Shares) depends on their market role and the volume of energy they generate, supply or trade. Funding Share data by month can be found on the ELEXON Portal.
Section E: BSC Agents
Section E sets out requirements that certain services must be provided by BSC Agents; the role of ELEXON in contracting with BSC Agents; provisions relating to the relationship between ELEXON, Parties and BSC Agents; and provisions relating to the BSC Services Manager. The BSC requires us to ensure the services specified in BSC Service Descriptions are always delivered.
Section F: Modification Procedures
Section F sets out the rules and procedures for modifying the Balancing and Settlement Code (BSC, the Code). This includes procedures for proposing, consulting on, developing, evaluating and reporting to the Authority on potential modifications. Section F also sets out rules and procedures for the creation and modification of Code Subsidiary Documents (CSDs) and provisions relating to change coordination and Information System (IS) Policies.
Section G: Contingencies
Section G of the BSC sets out what happens in certain contingency situations and cross-references Contingency Provisions set out elsewhere in the BSC. The contingencies covered are certain emergencies and unexpected or unusual events, and include: failure of the Energy Contract Volume Aggregation Agent (ECVAA) to receive contract notifications (Section P); manifest errors in the submission or acceptance of Bids and Offers (Section Q); the inability of National Grid to receive Physical Notifications (Section Q); Black Start Periods (Section G); and the exercise of certain emergency powers for civil emergencies and fuel security by the Secretary of State (Section G).
Section H: General
Section H sets out arrangements for the initial establishment of Code Subsidiary Documents; the relationship of the BSC with other documents; arrangements that applied to the commencement of trading under the BSC; arrangements covering Default under the BSC; the ownership, use and disclosure of data; audit provisions in the BSC; the limitation of liability of Parties under the BSC; arrangements for the resolution of disputes; and the legal and contractual relationship between Parties.
Section I: Transitional Arrangements for the Implementation of BETTA
The extension of the England & Wales BSC provisions to electricity trading in Scotland is affected by the British Electricity Trading and Transmission Arrangements (BETTA) programme. Although the scope of the BSC was extended to Scotland from the BETTA Go Active date, aspects of the BSC including imbalance settlement are not fully active in respect of Scotland until the BETTA Effective Date. During the Transition Period between these two dates certain transitional changes are needed to the enduring BSC in respect of Scotland. Section I contains these transitional BSC provisions.
Section J: Party Agents and Qualification under the Code
Section J deals with Party Agents and how BSC Parties, Party Agents and CVA Meter Operator Agents (MOAs) Qualify to participate in the Supplier Volume Allocation (SVA) arrangements of the BSC. Unlike Suppliers and Licensed Distribution System Operators (BSC Parties), Party Agents don't sign up (Accede) to the full BSC. The main areas covered in this section are the activities undertaken under the BSC through the use of Party Agents; the responsibility of Parties to ensure that Party Agents perform in accordance with relevant performance levels; the Qualification Requirements which must be met by BSC Parties and Party Agents; and the requirement for BSC Parties to register Party Agents.
Section K: Classification and Registration of Metering Systems and BM Units
Section K of the BSC deals with the classification and registration of Metering Systems, BM Units and Trading Units. The main issues covered include: identifying the Parties that are responsible for Imports and/or Exports of energy at Boundary Points; registering the Metering Systems that measure Imports and Exports of energy in the names of the Parties responsible for them; registering BM Units and assigning BM Units to Trading Units; registering the Metering Systems at Systems Connection Points in the names of the Parties responsible for them; the approval of Line Loss Factors by the Panel; and the process to be followed in the event that a Supplier Fails.
Section L: Metering
Section L of the BSC covers the requirements for Metering Equipment; the requirements to install, commission, operate and maintain Metering Equipment for measuring Active Energy and Reactive Energy; and the role of the Technical Assurance Agent (TAA) in relation to Metering Equipment.
Section M: Credit Cover and Credit Default
Section M covers the provision of Credit Cover by each Trading Party and the consequences in the event that this Credit Cover is insufficient. These consequences are primarily the refusal and rejection of Energy Contract Volume Notifications (ECVNs) and Metered Volume Reallocation Notifications (MVRNs) as provided for in Section P. Consequences of persistent Credit Default are also outlined in Section H.
Section N: Clearing, Invoicing & Payment
Section N of the BSC details payments to and from ELEXON Clear and Payment Parties for Trading Charges and Reconciliation Charges; arrangements for the Funds Administration Agent (FAA) to determine and notify Payment Parties of Trading Charges and Reconciliation Charges; payment procedures for the FAA and Payment Parties to follow; the obligations of ELEXON Clear and Payment Parties to make payments for Trading Charges and Reconciliation Charges and the consequences of non-payment; and the basis on which monies and Credit Cover are held by ELEXON Clear.
Section O: Communications Under the Code
Section O of the BSC primarily addresses data communications and sets out an outline of the arrangements for Communications under the BSC; requirements to be complied with by Parties and Party Agents to be able to send certain Communications to BSC Agents and ensure that certain Communications are received; requirements for the form of certain Communications between Parties or Party Agents and BSC Agents; and the basis upon which certain Communications will be treated as received by a Party or a BSC Agent for the purposes of the BSC.
Section P: Energy Contract Volumes and Metered Volume Reallocations
Section P sets out how Contract Trading Parties (Trading Parties and National Grid), may notify contract volumes to settlements, specifically to the Energy Contract Volume Aggregation Agent (ECVAA). Two types of notifications, Energy Contract Volume Notifications (ECVNs) and Metered Volume Reallocation Notifications (MVRNs), are allowed and these can only be submitted on behalf of Contract Trading Parties by agents, appointed by the Parties specifically for this purpose, and known as Energy Contract Volume Notification Agents (ECVNAs) and Metered Volume Reallocation Notification Agents (MVRNAs) respectively.
Section Q: Balancing Mechanism Activities
Section Q deals with the submission of data items in respect of relevant BM Units in accordance with the Grid Code; the submission of Physical Notifications in accordance with the Grid Code, to enable Final Physical Notification Data to be submitted by the Transmission Company; arrangements for the submission by Lead Parties of Bid-Offer Pairs for relevant BM Units and for the acceptance of Bids and Offers by National Grid; the submission by National Grid of Acceptance Data for the purposes of Section T and Section V; the submission by National Grid of Balancing Services Adjustment Data; the submission by National Grid to the Balancing Mechanism Reporting Agent (BMRA) of other operational data items for the purposes of Section V.