Nicholas Rubin, ELEXON Ltd

ELEXON recognises that how electricity is used is radically changing and that end consumers are being presented with more and more opportunities to actively manage their energy consumption and/or production. We recognise that the energy market (including central industry systems and processes) that facilitates this active participation will need to radically change too.

A commitment to decarbonise the economy and developments in disrupting and decentralised technology, services and business models, amongst other things, is driving a great pace of change in the way electricity is produced and consumed. Whilst innovation in technology and service provision unlocks opportunities in the home, it is also unlocking opportunities that are making it a reality for smaller and smaller customers (including domestic customers) and businesses to actively participate at the heart of the electricity system, and provide services to each other and other actors across the system, in existing and new markets.

On the one hand, these services might simply be based on the provision of smart meters to allow consumers to better manage their use, smart time of use tariffs that customers respond to. They might also be to enable homes to generate or store electricity (e.g. by connecting their electric vehicle) and then export back in response to pre-determined or real-time tariff signals; to participate in local peer-to-peer trading;  to allow aggregators to pool the consumption or generating capabilities of many homes and provide these pooled resources to the system operator or other users of the electricity system;  or to allow service providers to remotely control/automate the operation of smart devices in the home, possibly in response to real-time conditions on the electricity system or cost signals.

We believe that access to effective markets (new and existing) is the best way to maximise the benefits from these new opportunities for consumers.

Therefore, we believe it is essential that existing markets and the supporting industry arrangements are effectively changed to accommodate new technology, business models and markets. Indeed, we believe that effectively updating and expanding existing shared processes and infrastructure will provide a cost effective way of enabling an enlarged and common marketplace. Thereby unlocking the benefits to the end consumer.

ELEXON sits at the heart of the electricity wholesale market and, in accordance with the Balancing and Settlement Code (BSC), we manage central arrangements and systems that facilitate participation. We also advise government and industry participants on how the industry arrangements work and can be improved.

Our presentation will focus on illustrating how changes in central markets, services and systems will enable innovation and thereby the effective implementation of consumer-focused technology and service models. In particular, we will include an update on our leadership in the design of market wide half-hourly settlement (HHS) for Ofgem’s Significant Code Review on settlement reform. HHS is recognised as an enabler of a simpler and more accurate meter to bank process and of new technologies and services such as demand side response, storage and  smart time of use tariffs. We will also present on the BSC ‘Sandbox’, an initiative to allow for pre-competitive testing of new services and business models. Building on our expertise in the end-to-end wholesale market process, including code governance, code operation and policy delivery support, we will identify and discuss potential challenges in the ongoing industry transformation. Keeping our strategic focus in mind – to enable a timely transition to a smart and flexible system – we will share our suggestions to address those barriers.

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