ELEXON fully supports simplifying energy codes
ELEXON has published its views on how energy codes could be simplified and consolidated into just three codes to govern the whole energy sector.
The electricity Balancing and Settlement Code (BSC), which ELEXON manages, is one of 11 codes across the energy sector. The codes provide the commercial contracts between companies so they can operate in the energy markets.
Changing rules in the codes can be a long process, which puts off some companies from getting involved. ELEXON believes that the rules and arrangements for the codes need to be reformed.
This is important as the codes need to support a rapidly changing energy sector, which is attracting increasing numbers of new, innovative business models.
We have put forward options for a three-code model for the whole energy sector. We are providing our views on which codes would be covered within this to Ofgem and the Department for Business Energy and Industrial Strategy. They are reviewing the code arrangements and are expected to announce next steps this summer.
The three codes would be:
- A Retail Smart Energy Code
– covering all aspects of the energy retail markets, including codes which govern smart metering
- A Wholesale and Settlement Code
– combining the BSC with the management and operation functions of the existing Uniform Network Code (which governs the gas sector)
- A Network Use of System Code
– bringing together the current five electricity network codes governing connection and use of the networks
Our Director’s comments
Angela Love, ELEXON’s Director of Strategy and Communications, said:
‘Over the past 20 years the energy codes have evolved in a piecemeal way and the arrangements are now very fragmented and inconsistent.
The energy system is changing at an unprecedented pace with greater amounts of renewable generation and more smart technology available. We need a simpler set of code arrangements to support these changes and the increasing numbers of innovative new business models that are entering the market.
Consolidating and simplifying the codes will result in a much better user experience for new entrants and existing companies. It will also help to speed up changes to code rules and ensure that we have more consistent processes across the codes.’
In this ELEXON Insight article we explain the options for how the 11 existing gas and electricity codes could be simplified into three codes covering the retail, wholesale and networks sectors as a first step.