Balancing and settlement
This page sets out the various areas that are important when understanding the balancing and settlement processes when trading in the GB electricity market.
Articles of Interest
Making electricity market data more openly available7 April 2020
Settlement on ‘short’ clock change day: 29 March 202023 March 2020
ELEXON Insights: The electricity industry – ten years of change31 January 2020
For each half hour, known as a Settlement Period, companies can trade up to 1 hour beforehand that time period is closed. This is known as Gate Closure.
Following Gate Closure, National Grid uses the Balancing Mechanism to balance the system. Contract notifications, bids and offers, and other data, is sent to BSC Central Services for Imbalance Settlement.
There are several Settlement Calendars covering the various Settlement Systems. Use our Portal to search and download these Settlement Calendars for particular Settlement or Agent Run dates.
GSP Group Correction Factors
GSP Group Correction Factors (GGCFs) are used to ensure that the total energy allocated to Suppliers in each Settlement Period in each GSP Group matches the energy entering the GSP Groups from the transmission system, adjoining GSP Groups and through embedded generation.
The Imbalance Price is used to settle energy imbalance volumes. At the end of a Settlement Period, BSC Systems compare a Party’s contracted (traded) volume with the metered volume of energy used in the Settlement Period. If a Party is in imbalance of its contracted volume, then it will be subject to imbalance charges.
Each Trading Party is liable to pay or receive Trading Charges for each Settlement Day. These charges are calculated in relation to Imbalance Settlement and Balancing Mechanism activity. The Settlement Administration Agent (SAA) determines the trading charges.
Maintaining Credit Cover
The purpose of Credit Cover is to ensure that, should a Trading Party default, sufficient collateral is available to pay any debts. If a Party does not have sufficient funds it will enter into Credit Default.
Losses on the Transmission System are allocated across BSC Parties through the use of Transmission Loss Multipliers (TLMs). Transmission Loss Factors exist for each TLF Zone (aligning with the existing Grid Supply Point Groups) for each BSC Season in order to allocate transmission losses on a geographical basis.