Panel Meeting 196
12 April 2012
Apologies
Andrew Pinder
12 April 2012
Report on Progress of
Modification Proposals
Adam Lattimore
12 April 2012
Modifications Overview
3
New
P282, P283
Assessment
P272, P274, P276, P280, P281
Report
P275, P277, P278
With
Authority
-
Authority
Determined
-
Modifications Overview
Mod.
P272
P274
P275
P276
P277
P278
P280
P281
4
Title
Mandatory Half
Hourly Settlement for
Profile Classes 5-8
Cessation of
Compensatory
Adjustments
Extending BSC
Performance
Assurance
Introduce an
additional trigger for
suspending the
market in the event
of a Partial Shutdown
Allow Interconnector
BM Units to choose
their P/C Status
Treatment of
Transmission Losses
for Interconnector
Users
Introduction of new
Measurement Classes
Change of BSCCo
Board of Directors &
Chairman
Panel
Recommend
ation
Ofgem
Decision
Decision
By
Impl. Date
Decision
By
Fall Back
Impl. date
14-Feb-13
06-April-14
13-Feb-14
06-Apr-15
-
10 WDs
-
-
IWA
Assessment
Report
09-Jun-11
13-Sep-12
11-Oct-12
13-Oct-11
12-Jul-12
09-Aug-12
13-Oct-11
08-Mar-12
12-Apr-12
13-Oct-11
04-May-12
14-Jun-12
13-Oct-11
08-Mar-12
12-Apr-12
Reject
28-May-12
28-Feb-13
27-Sep-12
27-Jun-13
13-Oct-11
08-Mar-12
12-Apr-12
Approve
01-May-12
01-Nov-12
28-Aug-12
28-Feb-13
08-Dec-11
14-Jun-12
12-July-12
12-Jan-12
04-May-12
14-Jun-12
Approve
28-Feb-13
27-Jun-13
196/04
November Release Date
Colin Berry
12 April 2012
Introduction
• BSC Release dates:
• Last Thursday in February
• Last Thursday in June
• First Thursday in November
• November 12 Release date would be 1 November 2012
• Seeking to change Release date to allow technology
upgrade
6
Technology Upgrade
• BSC Systems Technology upgrade:
Initially developed and tested in 2011
Significant Oracle defects found – delayed implementation
Oracle has fixed defects now
Cannot restart technology upgrade before June 12 Release
work completes
• Technology upgrade complete in September 2012
• Required to ensure BSC Systems fully supported
•
•
•
•
7
November 12 Release
• Scope of Release:
•
•
•
•
No Approved Modifications to date
No approved Change Proposals to date
P278 targeted at Release
Four Change Requests
• P278
• Impacts SAA software
• Requires 10 week project
• Earliest implementation date 29 November
• November 12 Release date – propose change to 29 November
8
November Release: Recommendations
The BSC Panel is invited to:
• NOTE the rationale to change the November 12 Release
implementation date
• AGREE that the November 12 Release implementation date be
changed to 29 November 2012
9
196/05
P275: ‘Extending
Performance Assurance’
Melinda Anderson
12 April 2012
P275: Issue and solution
Issue:
•
P275 argues that the Code implies the PAB acts only for Trading Parties
•
This would mean that PAB would not resolve issues for BSC Parties that
are not Trading Parties (e.g. LDSOs) even though they rely on Settlement
data and processes for a number of business purposes
•
This is not the case
Solution:
11
•
P275 solution is to add a paragraph to Section Z to clarify the relationship
between the PAB and all PAPs with respect to Z1.6.1
•
Code-only change; scope of Performance Assurance unaffected
P275: Panel’s initial views
• No impact on Applicable Objectives (a), (b), (c) and (e)
• The Panel unanimously agreed with the Workgroup’s majority view
that P275 would better facilitate Objective (d) because increased
BSC clarity promotes efficiency in the BSC arrangements
• Unanimously agreed legal text
• Unanimously agreed Self Governance
• Unanimously supported implementation dates
• 16WD if Self Governance or
• 10WD following Authority decision
12
P275: Report Phase Responses
• No new arguments were presented
• Majority support for Panel’s initial recommendation
• Unanimous support for Implementation Date
• Unanimous support for Self Governance
• One comment on legal drafting
•
It does not deliver the original intent of Modification but delivers the eventual
intention
Agree?
13
Yes
No
Approve P275
5
1
Implementation Date
6
0
P275: Recommendations (1 of 2)
The BSC Panel is invited:
• NOTE Draft Modification Report
• CONFIRM views on Applicable BSC Objectives
• CONFIRM that P275 meets Self-Governance Criteria
• APPROVE P275
14
P275: Recommendations (2 of 2)
• APPROVE Implementation Date:
• 16 WD after approval or
• 10WD after Authority decision
• APPROVE BSC legal text
• APPROVE Self-Governance Modification Report
• NOTE appeal window closes 15WD after ELEXON’s notification of
the Panel’s decision (3 May 2012)
15
196/06
P277: ‘Allow Interconnector
BM Units to choose their P/C
Status’
David Kemp
12 April 2012
P277: Issue
• Energy entering GB over
Interconnector assigned
to different Account to
energy leaving GB
Moyle
• Applicable to both
transit flows and flows
starting/ending in GB
100MW into GB
Allocated to P Account
Paid SSP
17
IFA
100MW out of GB
Allocated to C Account
Charged SBP
• Without ECVN, in net
imbalance even though
net volume is zero
P277: Solution
• Single BM Unit per Interconnector per User
• Lead Party can elect P/C Status of these BM Units
• Allows Party to net import over one Interconnector and export
over another
• Volumes would not net to zero, due to transmission losses
• Solution would be mandatory
18
P277: Panel’s initial views on:
Applicable Objectives
• Relevant Objectives are (c) and (d) – no impact on (a), (b) and (e)
• Majority – does not better facilitate (c) and (d):
• Unduly discriminatory (c)
• Current arrangements not barrier to entry (c)
• Wouldn’t improve efficiency (d)
• Minority – does better facilitate (c) and (d):
• Interconnectors already treated differently (c)
• Precedent for different treatment (c)
19
P277: Panel’s initial views on:
legal drafting
• Legal text consulted on during Assessment
• One minor comment made – amendment made accordingly
• Drafting for BSCPs 15, 31 & 65 and CRA SD prepared during
Assessment
• Not consulted on during Assessment
• Panel unanimously agreed drafting for Report consultation
20
P277: Panel’s initial views on:
Implementation Date
• Unanimous Panel support for proposed Implementation Dates:
• February 2013 Release
• Fall-back June 2013 Release
• Driven by East-West Interconnector
21
P277: Report Phase Responses
Agree?
Yes
No
Reject P277
6
2
Implementation Date
8
0
Changes to Code and CSDs
6
0
•
•
•
•
•
22
No new respondents
No new arguments raised
Majority support for Panel’s initial recommendation
Unanimous support for Implementation Date
No comments on legal drafting
P277: Recommendations (1 of 2)
The BSC Panel is invited to:
• NOTE the P277 Draft Modification Report and the Report Phase
Consultation responses;
• CONFIRM the recommendation to the Authority contained in the
P277 draft Modification Report that P277 should not be made;
23
P277: Recommendations (2 of 2)
• APPROVE an Implementation Date for P277 of:
• 28 February 2013 if an Authority decision is received on or before 28
May 2012; or
• 27 June 2013 if an Authority decision is received after 28 May 2012
but on or before 27 September 2012;
• APPROVE the BSC legal text for P277;
• APPROVE the changes to BSCP15, BSCP31, BSCP65 and the CRA
Service Description for P277; and
• APPROVE the P277 Modification Report.
24
196/07
P278: ‘Treatment of
Transmission Losses for
Interconnector Users’
David Kemp
12 April 2012
P278: Issue
• BSC allocates transmission losses to Interconnector BM Units
• Anomalous in light of ITC scheme
• Compensates TSOs for National losses caused by cross-border flows
• National Grid passes through compensation to generators and
Suppliers through TNUoS
• Compensation can be positive or negative
• Interconnectors should not be subject to additional network
charges
• GB arrangements need to comply with European legislation
26
P278: Solution
• Set TLM to 1 for Interconnector BM Units
• BSC to no longer adjust Interconnector BM Unit Metered Volumes for
any GB transmission losses
• BSC would still allocate total GB transmission losses proportionally
across all other types of BM Unit
• Interconnector BM Units account for 2% of losses
• Low materiality – volatility of losses can exceed this amount
27
P278: Panel’s initial views on:
Applicable Objectives
• Relevant Objectives are (a), (c) and (e) – no impact on (b) and (d)
• Majority – better facilitates (a), (c) and (e):
• P278 most proportionate solution to demonstrate compliance
• Minority – does not better facilitate (a), (c), and (e):
• Undue discrimination (c)
• May not be needed
28
P278: Panel’s initial views on:
legal drafting
• Legal text consulted on during Assessment
• No comments received
• Panel unanimously agreed drafting for Report consultation
29
P278: Panel’s initial views on:
Implementation Date
• Unanimous Panel support for proposed Implementation Dates:
• November 2012 Release
• Fall-back February 2013 Release
• Driven by lead time for changes to central systems
30
P278: Report Phase Responses
Agree?
Yes
No
Approve P278
6
0
Implementation Date
7
0
Changes to Code
6
0
• No new respondents
• No new arguments raised
• Majority support for Panel’s initial recommendation
• One respondent was unsure
• Unanimous support for Implementation Date
• No comments on legal drafting
31
P278: Recommendations (1 of 2)
The BSC Panel is invited to:
• NOTE the P278 Draft Modification Report and the Report Phase
Consultation responses;
• CONFIRM the recommendation to the Authority contained in the
P278 draft Modification Report that P278 should be made;
32
P278: Recommendations (2 of 2)
• APPROVE an Implementation Date for P278 of:
• November 2012 if an Authority decision is received on or before 1 May
2012; or
• 28 February 2013 if an Authority decision is received after 1 May 2012
but on or before 28 August 2012;
• APPROVE the BSC legal text for P278; and
• APPROVE the P278 Modification Report.
33
196/08
P282: ‘Allow MVRNs from
Production to Consumption
or Vice Versa’
David Kemp
12 April 2012
P282 Allow MVRNs from Production
to Consumption or Vice Versa
Nigel Cornwall
For Statkraft
Metered Volume Reallocation Notifications
 Dual trading accounts are key feature of Neta market
template
– designed to ensure larger, vertically integrated players could not enjoy
netting benefit
 MVRNs have from outset provided valuable flexibility for
licensed parties to
– consolidate generation or consumption volumes horizontally
– in effect avoid active day-to-day participation in central trading
arrangements
 An unnecessary restriction exists, which P282 seeks to
remove
– this prevents energy from Production BM Units being transferred to
Consumption Energy Accounts and vice versa
36
MVRN restriction
% volume
or MWh
Trading charges
Consumption
Consumption
Production
Production
37
Defects
 The current restriction:
– is ineffective in its original assumed aim
• competitive restrictions should be matter for regulation
– e.g. mandatory auctions
– inappropriately restricts participants’ ability in managing imbalance risk
• denies organic commercial choices
• imposes cost
– unnecessarily complicates the trading arrangements
– creates an inequity with embedded generation
• can consolidate against demand
• also sits uncomfortably with trading unit concept
– treats trading parties differently from system operator
– may not be in line with European practice
38
Key benefits of P282
 Additional flexibility to manage imbalance risk, particularly for
smaller participants to consolidate positions
– increases efficiency
• reveals true imbalance
– competitive benefits
• benefits relative to off-take market
 Levels playing field with embedded generation
– P100 de facto acknowledged desire to stimulate competition and
permit consolidation
 Reduces complexity of trading arrangements and costs of
compliance
– especially with regard to contract notification process
– credit?
39
Against BSC relevant objectives
 c) (facilitating competition) - significantly, through additional
flexibility to manage imbalance exposure to own
circumstances and strategies. Risk reduction increases
competition and encourages new entrants
 d) (efficiency in arrangements) – removing an unnecessary
restriction and helping trading parties manage their own costs
 e) (European compliance) - may harmonise arrangements
with those in Europe (P277 workgroup)
40
Issues
 Working group invited to consider:
– if restriction should remain for participants over a certain size e.g.
20TWh annual production or consumption
– single energy account alternative?
– allow flag switching?
 Targetted and proportionate relative to alternatives
41
P282: Modification Proposal
• Allow MVRNs from Production BM Units to Consumption Energy
Account or vice versa
• Would also allow a Party to MVRN energy from their Production BM
Units to their own Consumption Energy Account or vice versa
42
P282: Things to consider
• What changes are needed to support the proposed solution?
• What wider impacts would the proposed solution have?
• How would GB’s two-Account arrangements be affected?
• What benefits would Parties gain from P282?
• What meaning would ‘Production’ and ‘Consumption’ hold?
• What are the benefits to the Applicable BSC Objectives?
43
P282: Proposed progression (1 of 2)
• Recommend: 6-month Assessment Procedure (11 October 2012)
• Workgroup membership should include:
• Members of Settlement Standing Modification Group (SSMG)
• Any other relevant experts and interested Parties
• 6 months needed to allow:
•
•
•
•
44
Full assessment of wider impacts, including detailed analysis
Full consideration of wider implications
20WD Industry IA and 15WD consultation
Avoiding Workgroup meetings during London 2012 Olympics
P282: Proposed progression (2 of 2)
• Proposer believes no link with any current SCRs
• Possible interactions with Cash-Out SCR
• Proposer is not requesting Self-Governance
• Material impact on existing arrangements
45
P282: Recommendations (1 of 2)
The BSC Panel is invited to:
• DETERMINE that Modification Proposal P282 progresses to the
Assessment Procedure;
• AGREE the Assessment Procedure timetable such that an
Assessment Report should be completed and submitted to the
Panel at its meeting on 11 October 2012;
46
P282: Recommendations (2 of 2)
• DETERMINE that the P282 Workgroup should be formed from
members of the Settlement Standing Modification Group (SSMG),
supplemented with any other relevant experts and interested
Parties;
• AGREE the Workgroup’s Terms of Reference;
• AGREE that P282 has no interaction with any on-going SCRs; and
• AGREE that P282 does not meet the Self-Governance Criteria.
47
196/09
Recommendation to raise a
Modification Proposal:
‘Reinforcing the Commission
of Metering Equipment
Process
Dean Riddell
12 April 2012
Background
• Metering Equipment subject to commissioning process (CoP4)
•
•
•
•
Metering System Registrant responsible
Typically discharged via appointed Meter Operator Agent (MOA)
Intended to prove accuracy of metering and detect problems
Failure may mask significant issues (unlikely to be detected later)
• Technical Assurance of Metering Expert Group (TAMEG) and
ELEXON concerns
• Certain Metering Equipment usually not within Registrant/MOA control
when commissioning required
• Issues prevent proper commissioning and lead to incomplete records
49
Proposed Solution
• Solution principles agreed by TAMEG
• Make relevant System Operator responsible for
• Commissioning Current Transformers and Voltage Transformers
• Providing relevant certificates and commissioning records
• Require MOA to assess performance and notify Registrant of potential
issues (Registrant retains overall responsibility)
• Require Registrant to consult relevant System Operator and agree
steps to minimise risk of issues
• Workgroup to develop and confirm solution detail and outstanding
areas based on TAMEG work
50
Areas to consider
•
•
•
•
•
•
Solution developed by the TAMEG is basis of Proposed Solution
Develop Proposed Modification (some specific areas identified)
Treatment of test certificates and results
Materiality of issue and potential benefit
Retrospection/legacy issues are out of scope
Standard areas
• Assess Proposed Modification (and develop any Alternative) against
Applicable BSC Objectives
• Establish impacts and costs
• Develop BSC legal text
• Consult BSC Parties and other participants and
• Recommend Implementation Date and approach
51
Proposed progression (1 of 2)
• Recommend five month Assessment Procedure (12 September Panel)
•
•
•
•
•
Three Workgroup meetings
Develop and assess Proposed Solution
If Alternative Solution raised, develop and assess
15WD industry impact assessment and 15WD consultation
We will submit to Panel earlier if possible
• Workgroup membership
• Members of the TAMEG
• Members of the Volume Allocation Standing Modification Group (VASMG)
• Any interested parties
52
Proposed progression (2 of 2)
• No links with any current Significant Code Review
• Self-Governance not requested
• Believe Modification does not meet Self-Governance Criteria
• Implementation would materially affect participants’ activities
(Metering System Registrants, System Operators and MOAs)
53
Recommendations
The BSC Panel is invited to:
•
•
•
•
•
•
•
•
54
RAISE requested Modification Proposal (Attachment A)
NOTE IWA
SUBMIT the Modification to Assessment Procedure
AGREE five month Assessment Procedure timetable
AGREE basis for Workgroup membership
AGREE Workgroup’s Terms of Reference
AGREE the Modification has no SCR interaction
AGREE the Modification does not meet Self-Governance Criteria
Minutes of Meeting 195 &
Actions Arising
Adam Richardson
12 April 2012
Chairman’s Report
BSC Panel
Andrew Pinder
12 April 2012
ELEXON Report
BSC Panel
Victoria Moxham
12 April 2012
Verbal update on issues
loading LLF data into
SVAA
Caroline Wright
12 April 2012
What was the issue ?
• SVAA load of 2012/13 LLF data for the 2012-13 BSC Year system
produced exceptions:
• SVA LLFCs that were not registered in MDD
• LLFCs registered in MDD with no associated LLFs
• 8 LDSOs out of 19 impacted
• Issue 1: 4 LDSOs had not submitted required MDD change
requests
• Issue 2: 4 LDSO had re-submitted SVA LLF files which were not
processed by ELEXON
59
What did we do and what is the impact?
• Impacted LDSOs contacted:
• Instructed to provide MDD change request for May MDD release; or
• Notified that we still needed to process their SVA files
• Impacted HHDAs advised not to download outdated files from 4
LDSOs until latest version on the Portal
• Files loaded on 4 April 2012
• All HHDAs confirmed that they have downloaded the correct files
• Informed the SVG and the ELEXON Board
• Default LLFs used for impacted MSIDs in II credit calculations 1
April – 3 April 2012
• No discernible impact on levels of Energy Indebtedness and required
Credit Cover
60
Next steps
• Internal investigation to understand process failure
• Report back to the SVG, Board and Panel with outcome report and
recommendations as appropriate
61
Smart Update
Chris Rowell
12 April 2012
Smart Metering:
Consultations & Conclusions
DCC Licence
1
Jun
P116+ Q14
&
DCC Licence Application
Regulations P116+ Q4
Data Access & Privacy
P97 Q30
Consumer Engagement
Strategy P92 Q36
Smart Energy Code
Programme Update
P160 Q63
15
May
1
Jun
1
Jun
1
Jun
(P13)
http://www.decc.gov.uk/assets/decc/11/consultation/smart-metering-imp-prog/4938-smartmetering-imp-prog-update-apr2012.pdf
63
Updated
Impact
Assessments
EC notification
of SMETS v1.0
DECC response
to 2011
consultations
on Licence
Conditions &
Installation CoP
Decisions!
Rollout (domestic & smaller non domestic)
• to complete by 31 December 2019
• no exemptions for early (non compliant) meter installations
Technical Specifications
• SMETS v1.0 – European Commission ‘shortly’
• Communications technology not specified (HAN & WAN) v1.0
compliant meters will count to rollout target
• Suppliers responsible for v1.0 equipment assurance
Consumer Protections
• Licence obligation for compliance with Installation CoP
• No sales during installation
• Data collection: monthly (any purpose) – daily (regulated purposes –
consumer opt out) – HH or marketing (consumer opt in)
64
1
Jun
Section
Participation
Activity
•
•
•
•
•
•
•
Governance & Change •
•
•
•
Assurance &
•
Enforcement
•
•
•
•
Other Matters
•
•
Using DCC Services
65
SEC Content
Party types
Accession rules
Enrolment/withdrawal of meters
DCC’s Comms Services
DCC Charges
SEC Relevant Objectives
SEC Panel
Code Administrator & Secretariat
Mods Process
Reporting
Compliance & Assurance
Liabilities
Disputes
Suspension & Expulsion
Intellectual Property Rights
Confidentiality
Transfer of DCC Licence
Force Majeure/Business Continuity
Voting Members
4 x large Suppliers
1 x small Supplier
1 x gas transporter
1 x electricity distributor
2 x other DCC comms users
up to 2 consumer reps
1 SEC Panel chair appointee
1 SEC Panel chair
Non Voting Members
1 x DCC appointee
Non Voting Attendees
1 x Authority appointee
1 x Government appointee
1
Jun
User
Access
Consumer
•
•
Suppliers
•
•
Networks
Privacy & Data Access Proposals
Access via HAN
Access via Supplier
Monthly Data capture for all uses
Daily Data capture for all uses except marketing (with optout)
• > Daily or for marketing needs consumer opt-in
Options
• As per Supplier
• HH access subject to networks developing plans for approval
that demonstrate protection of privacy
Third Parties
•
•
Data via consumer consent
Can be via DCC, subject to meeting SEC rules
Non Domestic
premises
•
DECC will consider if any proposals are required
Settlement
•
No specific provisions for Settlement but will consider how
privacy framework could change if Settlement changes
66
1
Jun
Build support
& address
concerns
Consumer Engagement
Strategy & Tools
Help consumers
make energy
savings
Ensure
vulnerable / low
income get benefits
Central Delivery Body?
67
Direct/ Real
Time
Feedback
Indirect
Feedback
Advice &
Guidance
Motivational
Campaigns
DCC Licence &
Licence Application Regulations
Draft Licence
Copious detail as per
other licences…
1
Jun
Licence Application Regulations
4 stage tender exercise
• Qualification
• Proposal
• Best and Final Offer
• Preferred Applicant
68
15
May
Smart Budget
Full Year 2011/12
Smart Support
Smart
Opportunities
TOTAL
69
Released Funds
Spend this month
Full Year
£ ,000
£ ,000
£ ,000
464
39
256
36
0
19
500
39
275
Distribution Report
David Lane
12 April 2012
National Grid Report
Ian Pashley
12 April 2012
Ofgem Report
Jon Dixon
12 April 2012
Accepting Modification
Proposals
Adam Richardson
12 April 2012
Recent Modifications: Concerns Arising
If there’s no Defect in
the BSC the Modification
is invalid and should be
Should the cost of assessing
rejected?
Can ELEXON
or the be a factor
Modifications
when determining if or how
ComplexBSC Panel reject a
they should
Modification
or be progressed?
Modifications with
many potential force it Does
to be
proposer
solutions should be
ownership mean the
withdrawn?
considered as
proposer should dictate
Standing Issues
the process and
instead?
progression timescales
for Modifications?
75
Obligations & Governance
The BSC Panel
Panel Objectives (B1.2.1)
•
Require Panel to give full and prompt effect to the BSC consistent with
achieving the BSC objectives and in a transparent, economic, efficient
and non-discriminatory way
Panel Modification Responsibilities (F1.2.1 & F1.2.2)
76
•
Operate Mods in efficient, economical and expeditious manner
•
Take account of complexity and urgency
•
Ensure Code facilitates achievement of the Applicable BSC Objective(s)
•
No undue discrimination between BSC Parties or classes of Party
•
Consistent with Code Administration Code of Practice
Obligations & Governance
The BSC Panel
Code Administration Code of Practice
•
Twelve Principles…
•
Principle 1: Code Administrators shall be critical friends
•
Principle 5: Code Administrators shall support processes which
enable users to access a ‘pre-Modification’ process to discuss
and develop Modifications
The Code Administrator
77
Obligations & Governance
The BSC Panel
Discuss Issue
Modification
Modification
Secretary
Modification
Workgroup
Standing Issue
(Issue Group)
The Code Administrator
78
To
Authority
Obligations & Governance
The BSC Panel
Discuss Issue
Modification
Modification
Secretary
Modification
Workgroup
Standing Issue
(Issue Group)
The Code Administrator
79
To
Authority
Help and Support Available
• The BSC and BSCP40
Discuss Issue
• Help Desk Queries
• Direct Contact
• Web-pages:
• Guidance Notes
F1.2.4A requires BSCCo
to provide assistance in
relation to Modifications
including assistance with
drafting a Modification
Proposal
• Process Diagrams
• Groups and Forums – E.g.
• Panel Committees (ISG, SVG)
• Expert Groups (PSRG, TAMEG)
• Cross Codes Forum etc.
80
What is a “Valid” Modification?
• To be accepted by the Modification Secretary a Modification
Proposal must contain (F2.1.2):
• Name of Proposer & Proposers Rep
• Description of issue
defect
issue or or
defect
• Description of nature / purpose of Mod
• Indication of Code Sections to be amended (& nature of amendment)
• Rationale why Proposer believes Mod would better facilitate
achievement of the Applicable BSC Objective(s)
• Indication of impact on Core Industry Documents
• Indication of impact on BSC Systems / Party’s systems & processes
• Rationale for urgency/self governance/exemption from SCR
81
What is a valid “Issue” or “Defect”?
• The scope of the BSC is defined in Condition C3.2 of NGET's
Transmission Licence, which defines the 'balancing and settlement
arrangements'
• Definition is short & unspecific and may be construed widely
• It must be taken to encompass everything currently in the BSC
Unless a proposed Modification is wholly unrelated to balancing,
imbalance determination or settlement it is likely to be difficult to
conclude with certainty that it falls outside the scope in C3.2.
New things can be introduced into the BSC so long as they fall
within the scope of C3.2.
82
Previous Legal Advice on C3.2
C3.2 The balancing and settlement arrangements encompass matters relating to:
a) bids or offers to adjust quantities of electricity on the total system
b) assisting licensee in coordinating & directing the flow of electricity
onto & over the national electricity transmission system
c) aiding licensee balancing national electricity transmission system
d) the allocation of the quantities of electricity to BSC Parties
e) the settlement of financial obligations between BSC parties
• Issues may arise when it is unclear if all of the Modification
Proposal falls within C3.2, but part of it does
• In this case it is arguable that the Modification Proposal would change
the BSC into something of which at least part was still contemplated
by C3.2, and therefore the BSC Panel must progress it through the
Modifications Process in Section F of the BSC
84
Acceptance of Modification Proposals by
the BSC Panel
• Two Considerations:
1. Valid Mod: Over-rule acceptance / rejection of Modification Proposal
by the Modification Secretary (based on compliance with F2.1.2)
2. Related Mods: Refuse to accept the Modification Proposal if it has
substantially the same effect as a Pending Modification or a
Modification that has been rejected within the past two months
(F2.1.4). (The Authority can overrule this BSC Panel decision.)
The BSC Panel is not entitled to decline to process a Modification
Proposal on any of the grounds for which the Authority might not
approve a Modification Proposal.
These are matters for the Authority. The BSC Panel may express a view on such
issues but it cannot exclude a proposal from being processed on these grounds.
85
A Word on Proposer Ownership
• Proposers Own their Modification & can amend Proposed Solution
• Proposers may withdraw their Modification prior to the Workgroup
reporting its recommendations to the Panel
• Modification Workgroups can derive an Alternative Solution
BUT THE PANEL OWNS THE PROCESS
• The Panel may require a Modification Proposal to be withdrawn at
any time if the Proposer of that Modification is deliberately and
persistently disrupting or frustrating the work of the Workgroup
and that Modification Proposal shall be deemed to have been so
withdrawn (F2.1.12A).
86
Case Studies
P264
Two-thirds
majority
requirement for
Panel
recommendations
on licence
originated
Modifications
87
• Pre-Mod advice
• Concern over governance issues it
might create
• Shaping of mod
• Ultimately rejected
Case Studies
P264
Two-thirds
P267
majority
Consideration of
requirement for
wider industry
Panel
developments &
recommendations
duration of
on licence
changes when
originated
agreeing
Modifications
progression
timetables
88
• Pre-Mod advice
• Explanation of how issue currently
addressed
• Proposer seeking clarification
• We would have recommended
rejection
• Ultimately withdrawn
Case Studies
P264
Two-thirds
P267
majority
Consideration of
requirement
for
P274
wider industry
Panel
Cessation of
developments &
recommendations
Compensatory
duration of
on licence
Adjustments
changes when
originated
agreeing
Modifications
progression
timetables
89
• Pre Mod advice
• Consideration of implications
• Shaping of mod
• Advice it should be taken forward as
an issue
Case Studies
P264
Two-thirds
P267
majority
Consideration of
requirement
for
P274
wider industry
Panel
Cessation of
developments
&
P275
recommendations
Compensatory
duration
of
Extending
the
on licence
Adjustments
changes
when
Performance
originated
agreeing
Assurance
Modifications
progression
Framework
timetables
90
• Pre-Mod advice
• Explanation of custom and practice
• Proposer seeking clarification
• We agreed that the BSC was not
clear
• Ultimately a simpler change than
proposer anticipated to cement
existing custom and practice
Recent Modifications: Concerns Arising
If there’s no Defect in
the BSC the Modification
is invalid and should be
rejected?
» It should be rejected if the defect
or issue is wholly outside the
scope of balancing and imbalance
settlement (but this may be difficult
to demonstrate).
91
Recent Modifications: Concerns Arising
Should the cost of assessing
Modifications be a factor
when determining if or how
they should be progressed?
» No. The Panel must progress all
Modification Proposals brought before it
on an equitable basis without undue
discrimination, taking account of the
complexity and urgency of the proposal.
92
Recent Modifications: Concerns Arising
Complex
Modifications with
many potential
solutions should be
considered as
Standing Issues
instead?
93
» ELEXON encourages this
when discussing issues and
ideas regarding prospective
Modification Proposals with
Parties. But it is ultimately
up to the Proposer whether
to raise a Modification or
Standing Issue.
» The BSC Panel may send
Modifications with ill-defined
solutions into a “Definition”
phase.
Recent Modifications: Concerns Arising
» No. The Proposer can only dictate the
Proposed Solution. The Panel is the
guardian of the Process.
Does proposer
ownership mean the
proposer should dictate
the process and
progression timescales
for Modifications?
94
The changing
landscape: the impact
of the European Union
Steve Wilkin
12 April 2012
The Future: EU Initiatives
Single Energy Market by 2014
MiFID II
Exemption
Third Package
(Single European Market)
Network Codes
(particularly Balancing)
Comitology
Guidelines
Balancing,
Settlement,
Market
Coupling, &
Data
Exchange
(Data Transparency)
Key players with formal roles:
96
Fallout from financial crash in 2008
(Markets in Financial
Instruments Directive)
EMIR, MAD, etc
(European Market
Infrastructure Regulation,
Market Abuse Directive, etc)
REMIT
(Regulation on Energy Market
Integrity & Transparency)
Bid-Offer
Acceptances
&
Settlement
Payments
Bid-Offer
Acceptances
& BMRS?
Process Followed to develop Network
Codes
• Commission decides what areas
need to be covered and drives
process:
• Framework Guidelines
drafted by ACER (and
approved by Commission)
• Network Codes drafted by
ENTSO-E (and approved by
Commission)
• Commission presents to
Ministers for approval
(‘comitology’)
• Then legally binding
3 year plan for electricity Network Codes:
http://ec.europa.eu/energy/gas_electricity/codes/c
odes_en.htm
The European Electricity Target Model
(diagram from ENTSO-E)
Congestion Management and Capacity
Allocation (CACM)
Network Code
Balancing Network
Code
Potential BSC impacts & some current
events (1)
CACM Network Code:
•ENTSO-E live consultation on draft Network Code – closes 23
May: https://www.entsoe.eu/resources/network-codes/capacity-allocation-andcongestion-management
•Potential BSC impacts: timing of Gate Closure; market splitting
•Plan to have legal Network Code finalised by end 2013
Potential BSC impacts & some current
events (2)
Balancing Framework Guidelines:
•ACER Consultation from end April?
(ACER Home page:
http://www.acer.europa.eu/portal/page/portal/ACER_HOME)
•Potential BSC impacts: Balancing Mechanism and payments;
imbalance settlement and pricing
•Plan to have legal Network Code finalised by end 2014
Ofgem consultation on implementing the EU Target Model in GB:
•http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?file=EU%20Target%20M
odel%20open%20letter.pdf&refer=Europe
•Workshop 30 April and consultation closes 22 May
Industry and UK Influence
(also trade associations, stakeholder events, consultations)
Network Code Drafting
JESG
NGET, Ofgem,
industry and
ELEXON
Framework Guidelines
DECC/Ofgem
Stakeholder
Group
DECC, Ofgem,
NGET, industry
and ELEXON
Comitology
(political agreement)
Any Other Business
12 April 2012
Next Meeting:
10 May 2012