Balancing and Settlement Code Modification P455: decision
Decision
- Publication date
- Industry sector
- Distribution Network
- Supply and Retail Market
- Transmission Network
This letter presents the Authority’s decision to approve BSC Modification P455: ‘On-site Aggregation as a method to facilitate Third Party Access’. This modification amends the Balancing and Settlement Code (BSC) and introduces a new methodology for meter data collection and aggregation for domestic and small business consumers that are located on microgrids (otherwise known as private networks or licence-exempt distribution networks) and currently receive their supply from an on-site (licence-exempt) supplier. Most microgrids are connected to the public network (usually to the networks operated by licensed Distribution Network Operators (DNOs) or Independent DNOs) and include park home sites, some housing estates, blocks of flats and industrial sites.
While consumers connected to microgrids have a legal right to switch supplier, current industry procedures designed to facilitate this process for domestic and small business consumers are not suitable: there is no evidence that a domestic consumer has switched supplier since arrangements were introduced in 2011. In April 2021, we granted Emergent Energy a BSC Regulatory Sandbox to trial a methodology better suited to domestic and small business consumers. Unlike existing processes it doesn’t require bilateral legal agreements between the different suppliers involved and minimises the need for changing metering hardware.
This is the first Sandbox trial which has gone through the entire controlled test and mainstreaming journey available via the BSC Electricity Sandbox (which is part of Ofgem’s Regulatory Sandbox), leading to permanent regulatory change. We have considered the issues raised by the modification proposal and the Final Modification Report, and have taken into account responses to the industry consultations and the BSC Panel’s views and recommendation.
We have concluded that the modification will better deliver the BSC’s objectives and we expect it will have a significant impact, introducing choice to many domestic and small business consumers on microgrids who have not been able to switch their energy supplier.