Review of the Performance Assurance Framework

ELEXON is currently undertaking a review of the Performance Assurance Framework. This page tells you about the review and provides the latest update on progress.

Latest news

PAF Procedures workstream

The third session of the Issue 69 working group for the PAF Procedures workstream met on 12 June 2018. We reviewed the first draft of the risk register – thank you to everyone who attended for their contributions.

We are holding a further Issue 69 working group on 25 July, to review the Settlement Risks related to the Central Volume Allocation (CVA) market.  If you have expertise in this area, and are interested in attending the session, please contact pafreview@elexon.co.uk.

An update on all the workstreams can be found in this paper to the June Performance Assurance Board (PAB).

Smart workstream

The smart Meter rollout assurance activities undertaken as part of the Performance Assurance Framework (PAF) review have now concluded. Please see below a summary of these activities:

Interim smart risk register

As the initial activity, we carried out an assessment of the Settlement Risks associated with the mass roll-out of smart Meters. The Issue 69 workgroup, which met twice, supported us in this assessment and helped us to develop an interim smart risk register. This interim risk register was subsequently incorporated into the Risk Evaluation Register (RER).

Key risk performance monitoring

The Issue 69 workgroup considered the highest risk area to be the Supplier-agent interfaces; in particular, the risk that Metered Data is inaccurate or missing as a result of problems with the Supplier interface with its agents. This is due to Suppliers playing a new and key role in the production and submission of Meter Technical Details (MTDs) for Data Communications Company (DCC) serviced smart Meters.

To provide monitoring against this key risk area the smart MTD report was developed and implemented. The report will be publically available monthly on the Key Data Reports page of the ELEXON website. It will also be presented to the Performance Assurance Board (PAB) monthly where any performance issues will be discussed.

Smart Meter rollout industry day

The Issue 69 workgroup identified the need for a workshop providing a process walkthroughs and educational sessions on BSC processes related to the smart Meter rollout. We hosted two industry days on 23rd and 30th April 2018. Both days were well attended – 65 attendees in total from 25 different Supplier organisations and 13 non-Supplier organisations.

Each day consisted of educational sessions on BSC processes related to the smart Meter rollout followed by a workshop. As part of the actions identified during the workshop, we will be undertaking future industry days over the rollout and taking a varied approach in term of engaging with participants.

Smart Meter rollout industry day workshop

Future assurance activities outside the PAF review

The PAB has deemed assuring Settlement Risks associated with the rollout of smart Meters to be one of its key strategic priorities. Therefore, these risks will be a focus of the PAF in the coming years as we progress into the mass rollout stage. Aside from the established smart MTD monitoring and actions following the smart industry day workshop, ELEXON will be providing on-going reviews of Settlement Risks associated with the rollout and proposing additional mitigations where necessary.

Coming soon

PAF Procedures workstream

The Issue 69 working group will convene on 25 July 2018 to review the CVA risks. If you are interested in joining the group, please contact pafreview@elexon.co.uk.

Key aims of the review

  • Better engagement with parties about issues that do and don’t matter to them (their risk appetite)
  • Increase the quantity and quality of participation in consultations
  • Meet the current and future assurance needs of the Panel, the PAB and the wider electricity industry e.g. smart metering, alternative business models, CVA risk
  • Improve the measurability of Settlement error and the mitigating effect of assurance activities
  • Deliver a valued and trusted assurance service to BSC Parties under the strategic and tactical guidance of the BSC Panel and PAB

The review is projected to run to Q2 2019.

Approach

A core ELEXON team, supported by risk management and data experts, will deliver the review in four workstreams. Industry experts signed up to the Issue 69 working group will be called upon to review and comment on key approaches and proposals.

The PAB will be the primary decision making body, and will receive regular updates on the project’s progress.

The four workstreams will culminate in a revised framework, a new set of risks with estimated error, a refreshed set of mitigating techniques and improved reporting. This proposed framework will be implemented via the BSC Change process where required, after PAB and Panel approval.  Any improvements that can be made sooner will be progressed as necessary.

Work stream 1 – Smart Metering Rollout

To provide immediate assurance against the challenges of the smart metering rollout by developing Proof of Concepts to enable the effective monitoring of significant Settlement Risks associated with the rollout.

Work stream 2 – PAF Procedures

To deliver recommendations to improve the operability and effectiveness of the REM and other PAF procedures that ensure that risks are more meaningful and reflective to participants.

Work stream 3 – Review of the PATs

To produce a set of recommendations in relation to existing or new techniques that can be applied efficiently and cost effectively to mitigate identified risks.

Work stream 4 – Data Provision

To create Proofs of Concept to test the viability of alternative methods of data provision that place less burden on participants to provide data and that supports more accurate risk appraisal.

As well as this webpage, we will use Newscast and the OSMs to provide key information and how you can get involved. The Issue 69 webpage holds documents related to that group’s work.

We will also be attending BSC and external forums to present on the objectives and activities of the review. If you would like us to present to your forum, please email us at pafreview@elexon.co.uk.

What is the Framework

Around £1.7bn in transactions went through the BSC Settlement systems in 2016/17. BSC Parties require an assurance framework that allows them to have confidence in the accuracy of the allocations of energy and charges.

The current approach to the Performance Assurance Framework (PAF) was introduced in 2007 under Modification P207.

With 16 assurance techniques, over 200 identified Settlement Risks, an annual central cost of around £3m, and impacts on all BSC Parties (plus their agents and BSC Agents/systems), the PAF must be delivered in an effective and efficient way.

Why review the PAF?

After 10 years of live operations, and some significant industry changes such as smart metering and innovative business models, the BSC Panel considered the PAF should be reviewed and included it in its strategic forward work plan 2016/17. ELEXON initiated a project and the Panel approved the preliminary scope and approach at Panel 255 in July 2016.

ELEXON then engaged with a broad spectrum of stakeholders to validate the scope and approach for the design phase of the review. The Performance Assurance Board (PAB) endorsed these proposals and Panel approval was gained in March 2017 (PAB 264/07 – PAF Review Scope and Approach Approval).

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