ELEXON Board Circulars
The ELEXON Board publishes a circular every 6 months to keep Parties informed of the issues that the Board is currently focussed on. Our Board is scheduled to meet on ten occasions each year, and at other times where necessary. These meetings include main Board meetings, strategy meetings and committee meetings.
July update from Michael Gibbons
I am very pleased to provide the latest update from ELEXON’s Board to BSC Parties. This letter describes some of our thinking on the changing energy landscape and the activities we are undertaking to help deliver several of the ambitions of Government, the Regulator and industry by innovating for the benefit of energy consumers.
As in previous letters, the Board’s focus is on explaining ELEXON’s strategy, our Foundation Programme and governance, and also what we have been doing to maintain and develop relationships with our various stakeholders.
PDF version of the latest circular
Summary from the latest circular
Codes Review
In our view the current Codes landscape and framework are not fit for purpose. They are highly complex and fragmented; they can inhibit innovation; and do not facilitate good coordination across codes and code bodies.
We have been arguing for fundamental changes through simplification of the central arrangements and codes for a number of years, including during the CMA inquiry; to that end, we have shared our recommendations with BEIS, Ofgem and industry through a series of workshops and meetings and published our proposals for consolidation of the current eleven main energy codes (and code bodies).
We have proposed a “Three Code Model” – bringing the current codes together across fuels alongside a number of suggestions on ‘quick wins’ that we believe can be ‘no-regret’ improvements to the code governance under the current model and landscape while wider changes are being implemented. Once consolidated to fewer codes, the managers of those codes should then be responsible for their further simplification.
While the Codes Review is ongoing, there is an immediate opportunity to commence the consolidation of code management functions through the Retail Energy Code (REC). We continue to engage with Ofgem on the development of the REC.
We are also mindful that Modification P365 enabled ELEXON to bid for the REC Code Manager role, and look forward to assessing this opportunity as more information emerges over the coming months.
Enabling innovation and new business models
At the heart of ELEXON’s strategy is a commitment to supporting innovation and new business models.
We see it as our responsibility as Code Manager of the BSC, working with the Government, Regulator and industry, to ensure the balancing and settlement arrangements accommodate consumer-facing changes in a more agile and responsive manner.
ELEXON has embarked on a number of activities in support of this strategy including:
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Opening up the balancing mechanism:
We are already introducing changes to the settlement arrangements and to our systems to enable smaller organisations such as aggregators to participate in the GB Balancing Mechanism for the first time and we are extending this to providers based in the EU via the Project TERRE changes
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Aiding new business models:
We are looking at how ‘behind the meter’ activities can be accommodated within settlement to give the right pricing signals to support those new business models and we are progressing, via a Modification (P379), our concept of enabling consumers to have more than one electricity provider (‘meter splitting’)
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Enabling Market Wide Half Hourly Settlement (MHHS):
We are playing a leading role in the design for Ofgem of the new Market-wide Half-Hourly Settlement arrangements
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Providing Expertise to new market solutions:
We are also making significant contributions to the industry-wide Faster Switching programme, EV Energy Taskforce, Energy Data Taskforce and ENA’s Open Networks project on the DNO to DSO transition, to mention just a few key sector initiatives
Foundation Programme
We note that the current programme plan is on track (although the recent request for a delay to TERRE by some EU TSOs may lead to some re-planning).
More generally, ELEXON is working collaboratively with BSC Parties and other key stakeholders across the industry to shape and design improved processes and customer interfaces that are for the benefit of the market.
These include the changes required to enable Wider Access to the Balancing Mechanism as well as for TERRE and the digitising of the BSC Party Registration processes and should result in increasingly agile systems that can more swiftly respond to the ever increasing demand for change.
Governance
Board members
We were delighted to appoint, in March this year, two new Board members in Sara Vaughan and David Titterton. Sara is Political and Regulatory Affairs Director at E.ON UK and David is Energy Services Director for Npower.
Annual BSC Report
We published the Annual BSC Report in advance of the Annual BSC Meeting and this includes useful information on ELEXON’s performance over the last year.
In particular, with our continued focus on efficiency, the 2018/19 financial year BSC expenditure was £39.8m, representing a £3.8m saving (9%) against the agreed annual budget of £43.6m. In line with ELEXON’s not-for-profit status these savings were returned to BSC Parties.
Previous circulars
- Board Circular no. 4 - 14 February 2019 (Size: 138.90 KB)
- Board Circular no. 3 - 10 July 2018 (Size: 154.08 KB)
- Board Circular No 2 - 1 February 2018 (Size: 175.88 KB)
- Board Circular No 1 - 8 June 2017 (Size: 129.27 KB)
Previous reports
Previously the Board publishes updates as part of its Board headline reports. However, this document set has been replaced by the Board Circulars.