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.
On this page
Market Index Definition Statement Review 20219 September 2021
BSC Insight: Why the Reserve Scarcity Price is being reviewed18 January 2021
System Prices spike due to ‘Beast from the East 2’11 January 2021
Market Index Definition Statement Review 2020 – consultation open4 September 2020
BSC Insights: Negative System Prices during COVID-1929 June 2020
Insights: Highest System Price in 19 years6 March 2020
How it relates to you
There are two Energy Imbalance Prices for each Settlement Period. These are:
- System Buy Price (SBP)
- System Sell Price (SSP)
The System Sell Price (SSP) and System Buy Price (SBP) are the ‘cash-out’ or ‘Energy Imbalance’ prices. These are used to settle the difference between contracted generation, or consumption, and the amount that was actually generated, or consumed, in each half hour trading period.
However now there is a single price calculation, so SBP will equal SSP in each Settlement Period. These prices are applied to Parties’ imbalances to determine their imbalance charges.
SSP and SBP (in £/MWh) and the Net Imbalance Volume (NIV) (in MWh) for every Settlement Period in a particular day.
- Indicative SSP and SBP reported from BMReports.com (BMRS)
- Finalised Settlement data is published in Best View Prices on the Elexon Portal
More about the data
Pricing and related data used in BSC processes includes:
- System Sell Price and System Buy Price
- Market Index Price and Volume
- Parameters used in the calculation of System Prices (Energy Imbalance Price):
- NIV – Net Imbalance Volume
- PAR – Price Average Reference Volume
- DMAT – De Minimis Acceptance Threshold
- CADL – Continuous Acceptance Duration Limit
- MIDS – Market Index Definition Statement
- LoLP – Loss of Load Probability
- VoLL – Value of Loss Load
- RSVP – Reserve Scarcity Price
- Utilisation Price
More about pricing
A Party is out of balance when its contracted energy volume does not match its physical production or consumption.
SSP is paid to BSC Trading Parties who have a net surplus of imbalance energy, and SBP is paid by BSC Trading Parties who have a net deficit of imbalance energy. These prices are designed to reflect the prices associated with the Balancing Mechanism Bids and Offers selected by National Grid to balance the energy flows in the Transmission System, as well as reserve scarcity.
Calculating SSP and SBP price
For each half hour trading period, the ‘cash-out’ or ‘energy imbalance’ prices (System Sell Price and System Buy Price) will be associated with Balancing Mechanism Bids and Offers accepted by National Grid as well as the Balancing Services used for that specific half hour.
Market Index Data Volume and Price
Market Index Data (MID) is used in the calculation of the Market Index Price for each Settlement Period, and reflects the price of wholesale electricity in the short-term market.
MID Volume (in MWh) and Price (in £/MWh) for every Settlement can be obtained from BMReports.com and the Elexon Portal.
System Prices (Energy Imbalance Price) parameters
Net Imbalance Volume (NIV)
NIV is the net imbalance volume (in MWh) of the total system for a given Settlement Period. It is derived by netting Buy and Sell Actions in the Balancing Mechanism. Where the NIV is positive, the system is short and would normally result in the SO accepting Offers to increase generation/decrease consumption.
Where NIV is negative, the system is long and the SO would normally accept Bids to reduce generation/increase consumption. It is subject to change via Standard Settlement Runs.
Price Average Reference (PAR) Volume
The Price Averaging Reference (PAR) volume is used to tag Bid-Offer acceptances such that a maximum volume of PAR MWh is used to set the Energy Imbalance Price.
Please note: The current value of PAR is 1MWh.
The PAR may only be amended by an Approved Modification.
De Minimis Acceptance Threshold (DMAT)
The De Minimis Acceptance Threshold is a parameter used to eliminate Bid/Offer acceptances of small volume. DMAT is currently 0.1MWh.
This value is written into the text of BSC Section T Paragraph 1.7 the BSC Panel may review it from time to time.
Proposed revisions to the value of DMAT are consulted upon with the Transmission Company and Trading Parties before a Panel determination is made, and are subject to Ofgem’s approval.
Continuous Acceptance Duration Limit (CADL)
CADL is used to flag short duration Bid-Offer acceptances, associated with system balancing actions in the Energy Imbalance Price calculation.
A Bid-Offer acceptance relating to any given Balancing Mechanism (BM) Unit will be flagged in the system price calculation if it has duration of less than the CADL value in minutes. CADL is currently 10 minutes.
CADL is defined in BSC Section T Paragraph 3.1B.
The BSC Panel may revise the value of CADL after consulting with BSC Parties but subject to Ofgem’s approval.
Loss of Load Probability (LoLP)
The LoLP is a measure of system reliability calculated by the System Operator (SO) for each Settlement Period.
The System Operator’s methodology is set out in the Loss of Load Probability Calculation Statement.
Please note: Currently a dynamic LoLP function is used.
Value of Loss Load (VoLL)
The VoLL price is an assessment of the average value that electricity consumers attribute to the security of supply. It is currently set at £6,000/MWh.
Reserve Scarcity Price (RSVP)
Both accepted BM and non-BM Short Term Operating Reserve (STOR) Actions are included in the calculation of System Prices as individual actions, with a price which is the greater of the Utilisation Price for that action or the RSVP.
The RSVP is based on the prevailing system scarcity, and is calculated as the product the VoLL and the LoLP for each Settlement Period.
The price (in £/MWh) sent by the SO in respect of the utilisation of a STOR Action which:
- in relation to a BM STOR Action shall be the Offer Price
- in relation to a Non-BM STOR Action shall be the Balancing Services Adjustment Cost
Market Index Definition Statement (MIDS) Parameters
The Market Index Definition Statement (MIDS) defines two main parameters.
- Individual Liquidity Threshold (ILT)
- time and product weightings
The Individual Liquidity Threshold (ILT) and (time and product) weightings parameters are published on the Elexon Portal.
Market Index Data is used in Settlement to calculate a price, expressed in £/MWh in respect of each Settlement Period, which reflects the price of wholesale electricity in Great Britain in the short-term market.
The Market Index Definition Statement (MIDS) defines the parameters for use by the Market Index Data Provider (MIDP) in the provision of Market Index data (MID) to the Settlement Administration Agent (SAA).
The MIDS is reviewed by the BSC Panel at least once a year. Any proposed changes are consulted upon with BSC Parties before the Panel determines whether a change is to be made.
A change to the MIDS is subject to approval by Ofgem.