P375 – Everything you need to know
What is P375? How does it work and when will it affect you?
What is P375?
At a high level, P375 proposes to make the settlement of Balancing Services for TERRE or the Balancing Mechanism (BM) more accurate by using metering equipment ‘behind the Meter’.
Under market provisions introduced by P344, the settlement of Balancing Services currently occurs at the Boundary Point. This is where a site is connected to the Distribution Network.
This can be problematic as the meter at the Boundary Point measures electricity flows for the site as a whole. The Balancing Service is then often linked to a specific controllable asset within the site, which can result in the delivered volumes used in settlement being masked by other independent activity on site.
The knock-on effect is penalties for the Virtual Lead Party (VLP), incorrect adjustments to the Supplier’s imbalance position and loss of potential revenue for the end customer.
The P375 solution proposes to use metering at the asset delivering the Balancing Service, or “Asset Metering” to avoid this. It will introduce a new Code of Practice (COP11) for “Asset Metering” that will outline 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.
When will P375 affect me?
Implementation is expected to be June 2022.
What does P375 mean for consumers?
For I&C consumers who have controllable assets (generation or demand) within their site, P375 can unlock an additional revenue stream through the provision of Balancing Services. It also increases the range of viable assets for Balancing Services within a site, which will help open the market to a wider group of consumers.
What does P375 mean for Virtual Lead Parties?
By using Settlement quality asset metering alongside high quality data collection, Virtual Lead Parties (VLPs) will be able to more accurately forecast their balancing service volumes and bid with greater confidence. In conjunction, this will provide greater assurance that their delivered volumes will be correctly recognised in settlement, minimising non-delivery charges and maximising payments.
What is TERRE?
Project TERRE (Trans European Replacement Reserve Exchange) was developed by a group of European Electricity Transmissions System Operators (TSOs), including the National Grid, to fulfil European legal requirements imposed by the European Electricity Balancing Guidelines (EB GL).
The new Balancing Service introduced by TERRE allows consumers in the UK, via their VLP, to provide flexibility to any participating TSO that requires it.
What is European Electricity Balancing Guidelines (EB GL)?
The EBGL is a document that sets out the rules for the integration of different electricity balancing markets in Europe, with the primary aim of enhancing Europe’s security of supply through greater sharing of resources. It entered European law in December 2017.
What is P344?
P344 seeks to align the BSC with Project TERRE. Another component is to promote “Wider Access” to the Balancing Mechanism (BM) in the UK – meaning consumers can more easily offer flexibility to the UK market as well as the EU.
What is a VLP?
A Virtual Lead Party (VLP) is a new type of BSC Party that facilitates consumer participation in both the BM and TERRE, independently of their supplier. They are a formalised version of Demand Side Response Aggregators.
From the provision of state-of-the-art metering and installation to timely and accurate data collection, Stark can provide the full range of services required for VLPs and end customers to take advantage of P375.
Contact our team to find out more.
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