VLP Market Entry: Benefit from the changes heralded by P375 asset level metering
The introduction of asset level metering next year has the potential to transform the energy market. But how exactly will it operate? And why do VLPs need to start the market entry process now?
The recent announcement of the P375 BSC modification was met with a surge of interest from the electricity market.
The removal of a key barrier to Virtual Lead Parties (VLPs) offering balancing services – namely the boundary point metering system will enable new entrants to scale up aggregation to thousands of assets.
Allowing meters installed closer to the asset to be used for BSC Settlement purposes could be a real game changer, enabling demand-side assets to play an increased role in the energy market.
Working closely with VLPs over the past year, supporting them to access the Balancing Mechanism (BM), we know how keen they are to take advantage of the new opportunities which P375 will bring.
The fundamental change 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.
But what will new VLPs and existing BM providers need to do to meet the new procedures?
A new Metering Code of Practice (CoP11) has been introduced to support asset meters. Both asset and boundary point meters may be included in an SBMU (but it would make sense that only one type of meter is used for any particular site).
The VLP Hub principle introduces new responsibilities, outlined in BSCPs 502 and 514, which will require submission of data via new VLP ‘P’ flows via Elexon.
VLPs who propose to use asset meters will also be required to complete additional sections of the SVA Self-Assessment Document (sections 7 and 19). Having provided key market interfaces to the BM for the past two decades, and supported a number of VLPs in recent months, we are well placed to guide new entrants through this rigorous regime.
However, the systems we are already delivering to VLPs to enable BM access also have the capability to scale up to support planned growth fuelled by the on-boarding of high numbers of new assets in response to P375.
Our advice to would-be VLPs wanting to access the BM following the introduction of the new metering arrangements in June 2022 is start early; the market entry process is notoriously lengthy and complex.