Elexon has implemented a modification to the Balancing and Settlement Code (BSC) aimed at improving the National Grid Electricity System Operator’s (NGESO) ability to manage energy supply security this winter.
The modification, known as P467, was put into effect on 27th June and addresses the potential risk posed by a gas deficit emergency (GDE).
Following the gas price spikes caused by Russia’s invasion of Ukraine, the risk of a GDE during the winter of 2022/23 increased.
To mitigate this risk, Elexon introduced Modification P448 in September 2022, which protected gas-fired electricity generators from significant imbalance charges if they were unable to fulfil contracts due to load shedding instructions during a GDE.
Modification P448 allowed load shedding instructions to be treated as electricity bids for BSC purposes, meaning generators could reduce electricity production if requested by National Grid ESO.
However, concerns arose that this could suppress cash-out prices during a GDE, leading to insufficient energy availability and potential demand disconnections.
To address this issue, Modification P467 was implemented, ensuring load shedding instructions are still treated as electricity bids but are removed from imbalance price calculations.
This adjustment prevents the suppression of cash-out prices and ensures accurate market signals during a GDE, while still protecting gas-fired generators from imbalance charges.
Peter Stanley, Elexon’s Chief Executive Officer, said: “Britain has a resilient energy system and the likelihood of either gas or electricity shortages occurring is low.
“However, as a sector we always need to be vigilant and well prepared ahead of any winter. Imbalance prices need to send strong signals to the market to manage supply and demand, and implementation of P467 will increase the ability of NGESO to manoeuvre through the management of emergency situations.”
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