The introduction of modification P375 has been seen by many across the energy market as a ground-breaking change to the Balancing and Settlement Code (BSC). Here’s a quick guide to what you need to know.
What is P375?
In June 2022, P375 came into effect, designed to enable greater market access for balancing services. It allows Asset Meters used to record electricity flows to or from assets – including those owned by embedded generators, demand-side response (DSR) providers, or owners of electric vehicle charging points – to be situated ‘behind’ the defined Boundary Point for Settlement purposes.
Why was the change introduced?
Previous provisions covered by P344 meant that the settlement of Balancing Services occurred at the Boundary Point, where complex, multi-use sites connect to a distribution network. This often proved challenging as measuring at the Boundary Point meant electricity flow for the whole site was measured. If the Balancing Service was linked to a specific controllable asset within the site, it often meant that the volumes of electricity used in settlement could be hidden by other activity.
For the Virtual Lead Party (VPL) this could lead to penalties, incorrect adjustments and loss of revenue.
By using metering at the asset to deliver the Balancing Service, P375 seeks to avoid this. VLPs will also have the ability to generate more accurate forecasts for their balancing service volumes and give them confidence that the delivered volumes will be correctly recognised at settlement.
What does it mean for customers?
The objective of P375 is to allow balancing-related services on-site from smaller assets to be separated from current imbalance-related activities, more accurately reflecting the balancing-energy volumes provided by the Balancing Service Provider (BSP). Industrial consumers generating on site will be able to isolate metering for key assets and sell their excess energy or demand response by becoming, or partnering with, VLPs, therefore unlocking an additional revenue stream.
Are there any other benefits to P375?
Other benefits to the modifications introduced by P375 include giving Distribution System Operators (DSOs) more accurate control of their networks. The changes could also assist developers of heat networks as part of a wider integrated energy system.
What other changes have been introduced?
In order to benefit from the changes, BSC Parties will need to use Asset Meters which meet the specifications defined in the newly created Code of Practice 11 (CoP11). This outlines the minimum accuracy and functional requirements for an asset meter to be compliant and assure the data used in settlement is of an appropriate standard.
How has the industry reacted to the new modifications?
Lord Rupert Redesdale, Policy Manager for the Decentralised Energy Trading Association, said: “The introduction of P375 will be a game changer for battery storage, the income from trading stored electricity will make the installation of batteries really attractive. P375, a humble meter, will be the keystone in eventually allowing all battery owners to profit from balancing the grid, which will allow a smarter greener grid to be developed.”