Enabling consumers to buy electricity from multiple suppliers

A specific proposal has been made to modify the Balancing and Settlement Code (BSC), one of the core documents which governs the operation of the GB electricity system, to allow multiple providers to buy or sell electricity through the same grid meter.

This proposal comes on the back of a white paper issued last year by Elexon, the body responsible for administering the BSC. As highlighted in both the relevant BSC modification proposal document and in the previous white paper, the proposed changes are likely to be of considerable interest to those contemplating a range of new business models, including:

• community groups looking to establish direct, local supply relationships with members of their community;
• electric vehicle manufacturers/retailers and/or charge point operators who are looking to offer bundled products to consumers, involving not only the provision of a charge point but also an associated electricity supply;
• providers of other smart appliances who are looking to offer similar bundled products to consumers;
• providers of peer-to-peer trading solutions.

It will also likely be of considerable interest to existing licensed suppliers who, if the proposed modifications are implemented, may find themselves having to accommodate new multi-party supply arrangements when dealing with the forecasting and billing of supplies to existing customers.

What is the issue?

A core feature of the system governed by the BSC is that a particular entity, usually a licensed electricity supplier, is registered in relation to each grid import or grid export metering point. As a general rule, under these arrangements anyone wanting to sell electricity via the grid to a particular end-consumer will only be able to do so by entering into a commercial deal with the relevant supplier who is registered in relation to the grid meter which serves that end-consumer's premises.

What change is being proposed?

The proposed modification effectively allows for volumes of electricity measured by a particular grid meter to be split between different parties.

To illustrate this, the Elexon white paper describes the following example scenario:-

• a domestic consumer has a single grid meter and a contract for the supply of electricity with a licensed electricity, Supplier A, who is registered for BSC purposes in relation to this grid meter. In a sample half hour period the grid meter records 0.5kWh of electricity usage – so a total of 0.5kWh of electricity imported from the grid.
• the consumer has leased an electric vehicle (EV) via a contract under which a licensed supplier, Supplier B, associated with the EV leasing company provides electricity for the EV. The measuring device in the cable feeding the EV shows that 0.1kWh of electricity was consumed in the example half hour period.
• the consumer is also part of a community energy scheme which allows them to buy a share of electricity exported to the grid from a solar PV system installed on the roof of a local community building. In the example half hour period, the PV system had surplus generation which was exported to the grid and, according to the contractual arrangement between the relevant community generator acting as a licence exempt supplier (Supplier C) and the consumer, 0.2kWh of this surplus electricity was purchased by the consumer.

As things currently stand, in a scenario such as the one above Supplier A would be treated as the party with sole responsibility for system balancing purposes for the full 0.5kWh of electricity recorded by the grid meter during the relevant half hour period. Supplier B and Supplier C would likely only be able to give effect to their respective electricity sale arrangements with the consumer by having a specific commercial agreement in place with Supplier A.

Under the proposed modifications, a "Customer Notification Agent" would facilitate the splitting of relevant electricity volumes between Suppliers A, B and C for BSC purposes so that:-

• the import volume for Supplier A (the consumer main supplier) would be adjusted for BSC purposes down by 0.3kWh, leaving a residual settlement responsibility of 0.2kWh;
• the import volume for Supplier B (the EV leasing company's associated supplier) would be increased for BSC purposes by 0.1kWh (and with other increases for other customers in the leasing scheme);
• the export volume for Supplier C or (as the case may be) any other licensed supplier registered on the grid export meter for the relevant solar PV system would be reduced for BSC purposes by 0.2kWh (and with other reductions for other customers in the community energy scheme).

Implementation steps/timescales

The modification proposal highlights a number of issues that will need to be considered further by a relevant BSC workgroup prior to the modification being submitted for approval under the BSC governance process. This includes a need to consider how responsibility for paying network charges associated with particular volumes of grid electricity could be split between different suppliers in an example scenario such as the one above.

Subject to this, the aspiration on the part of the proposer of the modification is for implementation to occur by April 2020.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at January 2019. Specific advice should be sought for specific cases. For more information see our terms & conditions.