Operations & Settlement
This page sets out the different areas of operations and settlement which you need to know about when participating in the electricity market.
Balancing and settlement
Electricity is traded in a wholesale market, with generators and suppliers entering into contracts with each other for every half hour of every day; sometimes years in advance. Non-physical traders such as investment banks also participate in this trading. For each half hour – known as a Settlement Period – they can continue to trade up to 1 hour beforehand. At this point the market for that time period is closed – this is known as Gate Closure.
Following Gate Closure, National Grid uses the Balancing Mechanism to balance the system. Contract notifications, bids and offers, and other data, is sent to BSC Central Services for Imbalance Settlement.
- More on balancing and settlement
- More about Imbalance Pricing
- More about Trading Charges
- More about Credit
- More about Transmission Losses
BSC Central Services
There are various IT systems used in the Imbalance Settlement process. Collectively the systems in the shaded blue area are known as the ‘BSC Central Services’.
Balancing Mechanism Units
Balancing Mechanism (BM) Units are used as units of trade within the Balancing Mechanism. Each BM Unit accounts for a collection of plant and/or apparatus, and is considered the smallest grouping that can be independently controlled.
Trading Dispute decisions
We assess all Trading Disputes (Disputes) against the three criteria that must be met. We send our view to the Raising Party and any affected Parties. The Trading Disputes Committee (TDC) hears all Disputes that we think are valid.
Line Loss Factors
Line Loss Factors are multipliers which are used to scale energy consumed or generated to account for losses on the UK’s Distribution Networks.
Market Domain Data
Market Domain Data is the central repository of reference data used by Suppliers, Supplier Agents and Licensed Distribution System Operators (LDSOs) in the retail electricity market.
Metering Systems accurately record the flow of electricity to (an Import) or from (an Export) a site. ELEXON uses Metering System data to calculate energy imbalance charges. These charges are applied to BSC Parties who use more or less energy than they have contracted to buy or generate.
A Load Profile represents the pattern of electricity usage by day and by year for the average customer in each one of the eight Profile Classes.
We create Profiles (daily, seasonal, yearly, per day type, etc.) for each of the eight Profile Classes by randomly selecting sites and installing half-hourly meters at these sites or getting half-hourly consumption data directly from Suppliers. These samples are designed to provide Profiles that are representative of all meters in each Profile Class.
Supplier Hub Operations
Supplier Volume Allocation (SVA) is the set of processes used to estimate the quantity of energy used or exported by a Supplier’s customers in a given half hour (or “Settlement Period”).
An Unmetered Supply is any electronic equipment that draws a current and is connected to the Distribution Network without a meter recording its energy consumption.