Imbalance Settlement Part 4 1. ELEXON’s systems and processes capture information to understand who consumed or generated energy and makes sure the right energy is assigned to the right customers 2. ELEXON’s systems capture the contracted volumes from generators and suppliers so we can see what they said they would produce or consume. 3. National Grid, provide data on balancing actions. 4. Prices are calculated by ELEXON 54
System Price Calculations Main Price Reverse Price 55
Two Prices/Two Calculation Methods System is long = BIDs taken to reduce energy on system System Energy Imbalance Long Party Imbalance Long Paid @ SSP (Main Price) Short Buy @ SBP (Reverse Price) 56
Two Prices/Two Calculation Methods System is short = OFFERs taken to increase energy on system System Energy Imbalance Short Party Imbalance Long Paid @ SSP (Reverse Price) Short Buy @ SBP (Main Price) 57
Publication Live and historic prices on www.bmreports.com Best View Prices www.elexonportal.co.uk 58
Imbalance Settlement Part 5 1. ELEXON’s systems and processes capture information to understand who consumed or generated energy and makes sure the right energy is assigned to the right customers 2. ELEXON’s systems capture the contracted volumes from generators and suppliers so we can see what they said they would produce or consume 3. National Grid, provide data on balancing actions 4. Prices are calculated by ELEXON 5. Payment is made to and from our customers 59
Imbalance Settlement Gate closure Forwards and futures market Balancing mechanism Power exchanges Settlement period Imbalance settlement Years in advance 1 hour 30 minutes 14 months BSC Central Services 60
Settlement: How do we add it all up? Imbalance Volume is difference of • metered volumes • bilateral contract volumes • Balancing Mechanism volumes Parties are charged for any mismatch (Imbalance) Energy Contracts Accepted Bids and Offers Metered Volumes Settlement Process Energy Imbalance = (Contracted & Bid-Offer Volume) vs. Metered Volume 61
Funds Administration BSC Party BSC Party BSC Party BSC Party BSC Party Financial Settlement BSC Party BSC Party BSC Party 62
ELEXON a Summary Suppliers Imbalance Settlement Generators 63
BSC Central Services Trading • Energy Contract Volume Aggregation Agent (Collects bilateral contract information) • National Grid (Operates the Balancing Mechanism) Settlement • Central Data Collection Agent (Collects CVA Metered Volumes) • Supplier Volume Allocation Agent (Collects SVA Metered Volumes) • Settlement Administration Agents (Adds it up and converts from energy to money) • Funds Administration Agent (Sends out the invoices, financial transactions) 64
More Information 65
Imbalance Prices Roger Harris
Why? » Imbalance prices are intended to incentivise you to balance your position (i.e. we would like your contracts to equal your metered volumes) » If Parties are not balanced, the System Operator may incur a cost taking actions to balance the system » The price calculation is designed to target the cost of these actions to the parties who created those costs » You can avoid exposure to cash out prices by balancing your position ahead of time 68
Gate Closure and National Grid’s role Markets, exchanges, etc All trades with National Grid (inter party trading) Gate closure Forwards and futures market Balancing mechanism Power exchanges Settlement period Imbalance settlement Years in advance 1 hour 30 minutes 14 months 69
Energy Imbalance » ELEXON accounts for generation/demand mismatches • Parties submit energy contracts (ECVNs) • Metered Volumes collected • Difference is the Energy Imbalance » Imbalance Prices: • System Sell Price (SSP) - Paid to BSC Trading Parties with too much energy • System Buy Price (SBP) - Paid by BSC Trading Parties with not enough energy 70
Long or Short Terminology » Party is long more metered generation/less consumption than contracted volume • - Gets paid for the excess imbalance » Party is short less metered generation/more consumption than contracted volume • - Pays for the deficit imbalance » System is long System Operator pull back generation/increase demand • » System is short System Operator has to increase generation/decrease demand • 71
How we use Energy Imbalance Prices (1 of 2) Generating more than the contracted volume MWh Metered generation Party is paid SSP Party’s total notified contract volumes Paid bilaterally 72
How we use Energy Imbalance Prices (2 of 2) Generating less than the contracted volume Party’s total notified contract Party volumes buys @ SBP Paid Metered generation bilaterally MWh 73
Two Calculation Methods » Main Pricing Method Costs of balancing the system • National Grid accepted short term actions • » Reverse Pricing Method Market price of electricity • Power exchange(s) trading in short term market • » Two-price mechanism Incentive to contract ahead • Main price based on costs of energy balancing actions • - Potentially less favourable than contracting 74
Reverse Price
Calculating the Reverse Price » Also known as the ‘Market Index Price’ » Derived from specific trades on power exchange(s) » Volume weighted average of the price of qualifying market trades » Need at least 25MWh to set price 76
Calculating the Reverse Price » Average weighted volume of qualifying trades » Half hour, 1 hour, 2 hour and 4 hour blocks » Traded in the 12 hours preceding Gate Closure Gate closure Balancing mechanism Power exchanges Settlement period Imbalance settlement 1 hour 30 minutes 14 months 12 hours 77
MIDS Market Index Definition Statement for Market Index Data Provider(s) » The MIDs is a document that determines how the reverse price is calculated » Reviewed annually » Presented to • Imbalance Settlement Group • Industry via consultation • The Panel • Changes require authority approval 78
Main Price
BSC Central Services Supplier Volume Allocation Central Volume Allocation Participant Systems (SVA) CVA CRA Outstations ECVAA ECVNA GSP and Generator HH meter readings GSP Group Takes CDCA ECVAA Participant Energy Contract Notifications Systems Contract data SVAA Generation BMU HH data Power BMRA Exchange Supplier BMU HH data SAA Physical MPID Market Index Data (MID) Notifications Funds Administration Agent BSAD and (FAA) Bid/Offer data Accepted Bids and Offers Balancing FAA Billing Report Mechanism Imbalance Charges and Payments System Operator Systems 80
Balancing Mechanism and Balancing Services Gate closure Forwards and futures market Balancing mechanism Power exchanges Settlement period Imbalance settlement Years in advance 1 hour 30 minutes 14 months One day BOAs Balancing Mechanism before gate closure Balancing BSAD Services (BS) Commit or stand down on BSC contracts contracts 81
What is the Main Price Based On? » The Main Price is based on the Balancing actions taken by National Grid. These can be: • Accepted Bids and Offers; or • Balancing Services Adjustment Actions Accepted Offer ( ↑ Generation) £35/MWh 150MW Energy Volume = 100MW 20MWh 50MW FPN Time 82
Main Price Calculation Offer ( ↑ Generation) : BSAA ( ↑ Generation) : (20MWh @ £35/MWh) (19MWh @ £30/MWh) Bid ( ↓ Generation) : Offer ( ↑ Generation) : (0.5MWh @ £27/MWh) Main Price (9MWh @ £94/MWh) Calculation Offer ( ↑ Generation) : Bid ( ↓ Generation) : (100MWh @ £38/MWh) (20MWh @ £40/MWh) BSAA ( ↓ Generation) : (20MWh @ £40/MWh) 83
Main Price Calculation » BUT not all data is used in the calculation Include Energy Balancing actions • - actions taken to maintain gross national HH balance Exclude System Balancing actions • - Actions taken to balance system in a geographic area and/or for shorter term balancing, e.g. frequency control 84
Main Price Calculation Processes (in order) Process works out what Disaggregated BSAD Bids, Offers and BSAD 1 used in Main Price System Operator flagging 2 calculation and removes Emergency Instruction flagging 3 the rest CADL flagging 4 De Minimis tagging (includes BSAD) 5 Arbitrage tagging (includes BSAD) 6 National Grid Classification 7 NIV tagging 8 Settlement Replacement Price 9 Administration Agent PAR tagging 10 (SAA) BPA/SPA 11 85
Main Price Calculation Offer ( ↑ Generation) : BSAA ( ↑ Generation) : (20MWh @ £35/MWh) (19MWh @ £30/MWh) CADL: under 15 mins DMAT: less than 1 MWh Offer ( ↑ Generation) : Bid ( ↓ Generation) : Main Price (9MWh @ £94/MWh) (0.5MWh @ £27/MWh) Calculation CADL: under 15 mins Offer ( ↑ Generation) : Bid ( ↓ Generation) : (100MWh @ £38/MWh) (20MWh @ £40/MWh) BSAA ( ↓ Generation) : (20MWh @ £40/MWh) SO Flagged 86
Main Price Calculation » Once all the relevant System Balancing actions have been removed… » Calculate a volume weighted average price over those remaining Offer ( ↑ Generation) : (100MWh @ £38/MWh) Offer ( ↑ Generation) : =((100*38)+(20*35)+(19*38))/ (20MWh @ £35/MWh) (100+20+19) BSAA ( ↑ Generation) : =£37.57/MWh (19MWh @ £30/MWh) 87
Default Rules and Capping » In some circumstances, SBP and SSP are not set at Main/Reverse Price • If insufficient market trades to set Reverse Price (minimum 25MWh required) • If SSP is greater than SBP 88
Detailed System Prices » BM Reports website (www.bmreports.com): 89
Want to know more? http://www.elexon.co.uk/wp-content/uploads/2012/03/imbalance_pricing_guidance_note.pdf 90
Further Information » ELEXON website (www.elexon.co.uk) • Imbalance Pricing Guidance • Section T of the BSC • Trading Operation Report » Balancing Mechanism Reporting Service (www.bmreports.com) » ELEXON Portal (www.elexonportal.co.uk) • Best View Prices » National Grid website (www.nationalgrid.com) 91
Supplier Volume Allocation Jonathan Priestley
Imbalance Settlement With what a Compare And calculate what a Generator payments produced… Generator where the two agreed to don’t match produce… Compare With what a And calculate what a Supplier payments Supplier consumed… where the two agreed to don’t match buy… 94
Supplier Volume Allocation works out how much electricity a Supplier consumes each half hour. 95
Large sites have Meters which record each half hour’s consumption, making them straightforward to settle. 96
The domestic dilemma How do we get half hourly values from a meter that is read a few times a year? 97
Sampling customers’ consumption… produces profile data giving a typical usage pattern across a year… which we can apply to all similar customers 98
Data Collector Collect Meter reads and convert to annual value Data Aggregator For each Supplier group consumption together by profile class Settlement Produce half hourly values from profile data and consumption values 99
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