What is the imbalance settlement process?

The imbalance settlement process settles discrepancies, for each half hour trading period, between:

  • The amount of electricity that a company has contracted to generate or consume (adjusted for any accepted Bids and Offers in the Balancing Mechanism); and
  • The amount of electricity which the company actually generated or consumed.

Due to the nature of electricity, generators may generate more or less energy than they have sold; customers of Suppliers may consume more or less energy than their Supplier has purchased on their behalf and traders may buy more or less energy than they have sold. In such circumstances, these BSC Parties are regarded as being ‘in imbalance’ and the ‘energy imbalances’ (i.e. the amounts of energy generated or consumed and not covered by contracts) have, in effect, been bought or sold from or to the National Grid Transmission System. Two ‘cash-out’ prices, also known as ‘energy imbalance prices’, are calculated for each half hour trading period and are used to settle these differences. These are called the System Buy Price (SBP) and the System Sell Price (SSP).

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