Under the electricity trading arrangements, the settlement process places incentives on suppliers to buy enough electricity to meet what their customers’ consume. This process is set out in the Balancing and Settlement Code (BSC). Today, the settlement process estimates most consumers’ consumption in each half hour.
From 6 April 2014, larger non-domestic consumers that are currently settled on estimates will have meters capable of recording half-hourly consumption. BSC Modification Proposal 272 (‘P272’) would require that settlement uses actual half-hourly meter readings for these consumers. The original proposal would introduce this requirement in April 2014 and the alternative in April 2015.
Ofgem is responsible for deciding whether modifications to the BSC are implemented. This document sets out Ofgem’s impact assessment on the modification for consultation. It also explains that, based on our analysis, we are minded-to approve the alternative modification.
As part of our assessment, we quantified some of the potential impacts of P272. We are committed to an open and transparent process of consultation. Therefore, on 5 December 2013, we hosted a briefing event to introduce stakeholders to the model we used to quantify these impacts. Subsequently, we published the model on the Ofgem website. The model and the presentation from the event are available below.
This consultation has closed and was not progressed further.