The introduction of asset level metering is set to transform the energy market. Paul Usher explains how BSC modification P375 could pave the way for a surge of new market entrants.
NGESO’s Wider Access agenda seeks to energise the electricity market in much the same way as Challenger Banks have transformed financial services.
Opening up the Balancing Mechanism (BM) to a more diverse range of businesses offering balancing services, including new Virtual Lead Parties (VLPs), has been a welcome move.
And just as Quorum was involved in the design and production of the first BM systems almost 20 years ago, we helped the very first VLP to enter the market last year.
We have since gone on to support a number of other VLPs with the BM market entry process, but a key barrier to wider participation has been the boundary point metering system, which for multi-use sites introduces a significant financial risk.
P375 removes this risk by allowing metering behind the boundary at asset level if there is an uncontrollable load within a site.
By disaggregating the assets the VLP has control of from those they don’t, with accurate asset based metering, the problem of asset owners not being able to settle accurately for the balancing services they provide will be solved.
The fundamental change, being introduced in June 2022, will enable both new market entrants and established players alike to scale up aggregation to thousands of assets.
As well as encouraging new VLPs to enter the market, P375 will also enable industrial consumers with generating capacity – e.g., diesel generators, solar panels or wind turbines on site – to be able to isolate metering for key assets and sell their excess energy or demand response by becoming, or partnering with, VLPs.
Looking to recruit smaller scale assets like these to provide balancing services, VLPs are already starting to partner firms such as green energy installers to generate new leads.
The resulting growth in available assets will, in turn, offer NGESO more options for balancing and reduce the need to build more generation, by capitalising on the latent flexibility that is already embedded in the system.
P375 is therefore a fundamental building block for future energy flexibility. It could be a real game changer, enabling demand side assets to play an increased role in the energy market.
Paul Usher is Commercial Director at energy software specialist Quorum.