Becoming a Virtual Lead Party
This page lists and details the step-by-step process of becoming a Virtual Lead Party (VLP). You will also learn about what qualifications are needed, the relevant costs and charges and any other information you may need to know.
On this page
What is a Virtual Lead Party?
VLPs are aggregators of Supplier Volume Allocation (SVA) registered units for the sole purpose of participating in the provision of balancing services. They can participate in both the Balancing Mechanism and Replacement Reserve market.
VLPs only participate in Settlement by offering balancing energy, they will not be subject to the same level of charges and obligations as existing BSC Parties.
Video on the VLP Market Entry Process
This video explains the process for entering the energy market as a Virtual Lead Party (VLP).
Video published: 2021
Video length: 11 min, 13 sec
- Virtual Lead Party Market Entry Process video transcript
- Virtual Lead Party Market Entry Process Presentation slides
In order to qualify as a VLP you will need to obtain the following qualifications:
The Central Volume Allocation (CVA) Qualification is needed to prove that VLPs have the ability to send certain communications to BSC Agents and ensure that certain communications are received.
The Supplier Volume Allocation (SVA) is needed to ensure that VLPs understand the obligations and activities of the BSC and maintain a certain performance level.
VLPs acceding to the BSC must pay a £500 accession fee which covers the administrative costs of entering the market.
Every VLP, who is not also a Trading Party, must pay a flat monthly charge of £125.
Charges are made to Parties (or by them) as a result of any imbalance (Trading Charges) 29 days after a Settlement Day. Over this period a Parties’ Credit Cover ensures it has enough collateral to cover these payments in case of default.
We do not specify the amount of Credit Cover you must lodge; it is up to the Party to decide. Parties usually make this decision based on their trading characteristics.
Secondary BM Unit Monthly Charge – £60
A VLP must pay a charge for each Secondary BM Unit for which the Party is Lead Party, for
all or any part of that month.
Notified Volume Charge – £0.0005/MWh
A charge is also payable against a Party’s Gross Contract Volume.
Participant Test Service charges
For new VLPs entering the market an initial 1/2 day Participant Test Service (PTS).
The PTS is a test system, similar in configuration, to the live BSC central systems environment. It is available to BSC Parties, Party Agents, third party software providers & Elexon to increase the level of assurance to individual companies, and to the industry as a whole.
You can use the PTS service before competing CVA Qualification testing and operating in the live environment, and to test any impacts as a result of changes to your business software.
Participant Test Service Test Slot (£/half day) = £947 + VAT
Steps needed to become a Virtual Lead Party
You will need to go through various steps in order to register as a VLP. The diagram below lists all the tasks required.
Within the individual steps there are forms that need to be completed and details about financial transactions that need to take place.
Using the Kinnect Customer Solution
You can use the Elexon Kinnect Customer Solution, where you will be directed to all the relevant steps needed to become an VLP. Elexon Kinnect is a self-service gateway that offers a guided and streamlined market entry process.
Steps to accession
The first thing to do is formally register your intent to become a VLP. You can do this by completing an expression of interest form. If you would like a meeting to discuss any further questions you have please state your availability in the expression of interest form, and we will arrange a meeting with you to discuss your questions or alternatively please send us an email with your questions to [email protected].
After the meeting you will be issued with an Elexon Kinnect login. From there you can start to go through the market entry process.