Opening up a Europe-wide market for electricity balancing
ELEXON has today (28 February) opened up the market entry process for independent aggregators to the Balancing and Settlement Code (BSC) as Virtual Lead Parties (VLPs).
Modification P344 allows VLPs to start registering secondary Balancing Mechanism Unit (BM) units so they can participate in Project TERRE.
Wider access to balancing markets
Project TERRE (Trans-European Replacement Reserves Exchange) creates a European platform for trading electricity which can be used to keep supply and demand in balance on electricity networks in nine participating countries (including GB). ELEXON and National Grid the Electricity System Operator are now implementing this and the platform is expected to go live by December 2019.
Opening up participation in the GB balancing mechanism more widely to independent aggregators is important for helping to deliver progress on the smart systems and flexibility plan. Previously aggregators could only participate in it if they were affiliated with a licensed energy supplier.
The role of VLPs
Under the BSC framework, independent aggregators will be known as VLPs. A VLP is a distinct new type of party to the BSC that only participates in settlement by offering balancing energy. They are not subject to the same charges and obligations as existing BSC Parties.
Webinar about VLPs
Following two well-attended industry days in December 2018, ELEXON and National Grid have put together a webinar that explains more about the role of the VLP. It also explains how they can start their preparations for participating in the Project TERRE balancing product and the existing Balancing Mechanism by the end of the year.
This webinar covers the topics that were part of the industry days, including what registration as a VLP involves.
We also produced a recording that focuses exclusively on how settlement in Project TERRE works. In this, Matthew Roper, Market Architect at ELEXON, sets out:
- How TERRE acceptances will be paid to parties
- How TERRE volumes will be settled
- How non-delivery will work
- How the imbalance price is calculated
Market entry process for VLPs
Alongside implementing Project TERRE we are removing barriers faced by independent aggregators wishing to participate in the balancing market. This initiative is known as ‘wider access’.
ELEXON has produced guidance for companies interested in entering the market as a VLP. We also have a dedicated Market Entry Team that offers support and advice to all new BSC parties:
Keeping up to date
We have set up a web page that will keep customers informed about key stages in the implementation of the new process: