P379 ‘Multiple Suppliers through Meter Splitting’

1. P379 ‘Multiple Suppliers through Meter Splitting’ • 27 February 2019 • ELEXON & New Anglia Energy • Workgroup 1 • Public

3. Agenda • Welcome & meeting objectives • Workgroup Terms of Reference • Overview of P379 • Initial Workgroup views/comments on P379 • BSC topics for discussion • External dependencies relating to P379 • P379 use cases • P379 next steps • Any other business • Meeting close and Progression Plan

4. Objectives • Consider Terms of Reference • Describe the context and background of Modification • Discuss Workgroup views • Determine scope of Workgroup activities • Agree scope of user cases Initial Written Assessment Assessment Procedure Workgroup meeting(s) Impact Assessment Workgroup meeting(s) Assessment Procedure Consultation Workgroup meeting(s) Panel considers Assessment Report Report Phase With Authority

5. Terms of Reference • The 379 Workgroup will: • Consider the Modification in line with the standard modification Workgroup Terms of Reference; • Carry out an Assessment Procedure for P379 in accordance with BSC Section F2.6; • Produce an interim Assessment Report for the BSC Panel on its discussions to be presented no later than 13 June 2019;and • Produce an Assessment Report for the BSC Panel to be presented no later than 12 September 2019. • The P379 Workgroup will be comprised of experts in the following areas: • Supplier Volume Allocation (SVA) processes; • Existing metering arrangements; • Party Agent functions; • Electricity Supplier functions; and • New electricity supply business models (community energy, peer to peer trading, bundled products and storage sharing)

6. Terms of Reference • The Workgroup will consider the following areas: • a) Whether NHH Meters should be included within the solution alongside HH Meters; • b) How export volumes should be treated at the Boundary Point; • c) The methodology to be used for allocating volumes between Trading Parties, and the associated costs and benefits of different approaches; • d) Assess any potential impacts on the accuracy of Settlement; • e) Appropriate Performance Assurance Techniques for the P379 solution; • f) Whether new Profile Classes are required or would be beneficial for the solution; • g) Interaction with proposals for asset level metering (P375 ‘Settlement of Secondary BM Units using metering behind the site Boundary Point’), including whether a new Code of Practise(CoP) is required; • h) Allocation of Metering System charges and responsibility for Metering System costs; • i) The scope of the Customer Notification Agent (CNA) role; • j) Interactions with the current shared metering arrangements under the BSC;

7. Terms of Reference • Continued… • k) Cross-Code impacts resulting from the solution developed, including impacts on the Supplier Meter Registration Service (SMRS) registration system; • l) Consider the data that should be made publically available in an accessible manner to interested Parties and third parties; • m) Consider any legal implications of the solution developed, including any necessary contract arrangements between Parties; • n) Consider the cost-benefits of the solution developed through an industry impact assessment; • o) Consider the consumer experience from the solution developed; • p) What changes are needed to BSC documents, systems and processes to support P379 and what are the related costs and lead times? • q) Are there any alternative Modifications? • r) Should P379 be progressed as a Self-Governance Modification? and • s) Does P379 better facilitate the Applicable BSC Objectives compared with the current baseline?

8. Overview of P379 Proposer

9. Introducing P379: Enabling consumers to buy and sell electricity from/to multiple providers through Meter Splitting 10 January 2019 Nigel Cornwall/Emma Burns

10. Introductory remarks • New Anglia Energy is a recent market entrant • acceded to BSC late 2018 • presently an exempt supplier participating in the Norwich Virtual Energy Community and other local market initiatives in East Anglia • focussing on solar, battery and EV charge point combinations behind the meter • considering battery development in front of the meter • side development by Nigel Cornwall, not Cornwall Insight • Issues facing it are shared by many innovators and disruptors in the market place who do not want to become traditional suppliers • Had been intending to bring forward sandbox proposal to explore the issues • Working with OVO Energy, Cooperative Energy, Powervault and Verv on this mod

11. What is the issue? The current arrangements facilitate limited disaggregation • P379 aims to address a significant barrier to competition in rules which prevents competition for supplier volumes behind the meter • existing SVA Shared Metering Arrangements do allow for disaggregation but this is manual process only possible for HH meters, and requires ex-ante agreement between two Trading Parties • P379 builds on Elexon’s April 2018 White Paper: ‘Enabling Customers to buy Power from Multiple Providers’ • The solution relates to other changes being developed: • P344 – Project TERRE • P375 – Settlement of Secondary BM Units using Metering at the Asset • P376 – Utilising a Baselining Methodology to set Physical Notifications for Settlement of Applicable Balancing Services Settlement meter M The proposed change would allow for more effective competition for customer volumes Settlement meter M

12. What is the proposed solution? • The proposal would allow splitting of volumes from a customer meter to different Trading Parties • The customer would continue to have a ‘main’ or ‘default’ supplier responsible for metering and data collection / data aggregation activities • The proposed solution creates a new Party Agent role, the Customer Notification Agent (CNA) to reconcile flows through a Settlement Meter • The CNA’s role would be to: • notify BSC Central Systems of the Metering Systems for the consumers, Generators and Suppliers involved in energy trades or reallocations under the relevant scheme; • notify the associated energy volumes and ensure consistency with the existing contract notification regime; and • notify adjustments to metered volumes to reflect volumes to be attributed to additional Suppliers.

13. Some key considerations NHH meters vs HH meters Performance assurance Treatment of disputes BEIS smart export guarantee proposals Others? Scope for CNA competition for a single meter Impact on / requirement for profiles Timetable for HHS SCR TCR impacts & potential fixed capacity charges

14. Applicable objectives • Better facilitates applicable BSC objective (b): • as it will make possible benefits to system management at the local level enabling better judgements on residual balancing • will create the potential for greater participation in the Balancing Mechanism (BM), providing the ESO with a greater range of options for economic and efficient system balancing. • consistent with Ofgem’s initiatives to achieve more efficient whole system outcomes. • Better facilitates applicable BSC objective (c): • will remove barriers to competition in the energy markets. The current de facto single ownership of the Meter volumes prevents competition being facilitated behind the Meter and greatly limits the development of innovation that could ultimately benefit consumers. • removing this barrier would better facilitate competition between Suppliers and other providers operating in the market, including in the provision of new services facilitated by this Modification. • Better facilitates applicable BSC objective (e) as the Regulation strongly supports consumer choice and demand-side integration

15. Initial Workgroup views/comments on P379 • Peter Frampton

16. Views from the WG • The rest of the today’s slides have been formulated to provoke discussion of the proposal and help determine the scope of Workgroup activities over the rest of the Modification • We are beginning with big questions about the proposal; • Should meter splitting be a feature of the market? • Can meter splitting work in practice? • Is meter splitting compatible with current legislation? • Is a new settlement Agent (Contract Notification Agent) the correct mechanism to enact meter splitting?

17. Views from the WG • Should meter splitting be a feature of the market? • There do not appear to be examples from other markets, • Current activities focussed on private grids or within the portfolio of a single Supplier • E.g. EDF Energy/Verve Brixton, Brooklyn microgrid • Is meter splitting inevitable given increasing decentralisation of generation and capability of new technology platforms? • Are there clear grid benefits? • Alternatives to meter splitting to increase behind-the-meter competition?

18. Views from the WG • Can meter splitting work in practice? • Currently have ex-post meter splitting option via BSCP550 Shared SVA Meter Arrangements • Project TERRE introducing settlement mechanisms to transfer metered volumes from behind-the-meter assets • P375/P376 will introduce additional governance on behind-the-meter recording of energy volumes

19. Views from the WG • Is meter splitting compatible with current legislation? • Legislation currently provides for licence exempt Suppliers, but there isn’t a practical route to market without partnering with a licensed Supplier (and therefore restricting competition) • Does legislation define supply as a one-to-one relationship? • Schedule 2ZB of the Electricity Act 1989 places a number of duties on licence exempt Suppliers (normally in licences), including CoSprocess. • Is this compatible with current SVA Shared Meter Arrangements?

20. Views from the WG • Is a new settlement Agent (Contract Notification Agent) the correct mechanism to enact meter splitting? • The role is not dissimilar to that of a HHDC in BSCP550 Shared SVA metering arrangements • In BSCP 550 the HHDC splits meter reads between Suppliers • Additional governance required for ex-post meter splitting suggests role could be sufficiently different from HHDC role for stand-alone governance

21. Views from the WG • Should meter splitting be a feature of the market? • Can meter splitting work in practice? • Is meter splitting compatible with current legislation? • Is a new settlement Agent (Contract Notification Agent) the correct mechanism to enact meter splitting? • Any more?

22. BSC Topics for discussion • Peter Frampton

23. Topics for WG discussion • WG discussion will primarily focus on BSC related issues • A number of BSC areas likely to be impacted • Lots of groundwork already established by P344 • Today: WG views on additional topics to address

24. Topics for WG discussion • Settlement mechanism for multiple Suppliers • Role of intermediary Agent • Governance of intermediary Agent • Information provision • Performance assurance impacts • Participating meter classes • Use cases • Any more?

25. Topics for WG discussion • Settlement mechanism for multiple Suppliers • Currently anticipate leveraging P344 solution • CNA submits data to settlement outlining volumes to be transferred between Parties • Data submitted in aggregate at Party level? • SVA then applies each adjustment or aggregates and applies a single adjustment • Parties notified of adjustment

26. Topics for WG discussion • Role of intermediary Agent • Determine meter volumes at behind-the-meter level with HH granularity for transfer between Parties • Recording/registering Parties operating at a premises • Validation of behind-the-meter resource and activity • Alternatively/additionally falls within PAF • Governance of intermediary Agent • Developing new Agent role • Determining level of oversight from Parties • Specifying which processes are common

27. Topics for WG discussion • Information provision • Data flows • Into settlement, adjustments data • CNA to Parties (including primary Supplier) • SVA to Parties, notification of adjustments (for check) • Publically available data • What reports are useful? • Total volumes adjusted (regional, HH)

28. Topics for WG discussion • Performance assurance impacts • Are new settlement risks introduced? • Are existing settlement risks impacted? • Assurance for new Agent role • Behind-the-meter asset validation • Ongoing data validation mechanisms • Automated or manual, sampling or full data set?

29. Topics for WG discussion • Participating meter types • Validation of adjustments more accurate against HH data • Adjustments could be done against profiles, would pose practical challenges for certain arrangements • Solution restricted to domestic/small business or open to all sites? • Use cases • Recommend developing a number of scenarios to test solution against

30. Topics for WG discussion • Settlement mechanism for multiple Suppliers • Role of intermediary Agent • Governance of intermediary Agent • Information provision • Performance assurance impacts • Participating meter classes • Use cases • Any more?

31. External dependencies relating to P379 • Peter Frampton

32. Non-BSC & dependencies • Number of issues exist outside the BSC • Legislation? • Licences • Codes • Propose establishing associated groups to address specific issues

33. Topics to address in parallel • Customer billing arrangements • Optionality of participation • Interaction with SVT Price Cap • Compatibility with all market segments • Multilateral contractual arrangements • Any others?

34. Topics to address in parallel • Customer billing arrangements • How are customers bills adjusted? • Will customers receive bills/cheques from multiple Parties? • Will customers pay/be paid by multiple Parties? • Will customers need a bespoke billing mechanism? • What are the impacts for Supplier billing systems?

35. Topics to address in parallel • Optionality of participation • Will consumer pressure drive sufficient participation for effective competition for customers who want to participate in meter splitting arrangements, or should participation be mandatory? • In theory, customers wishing to participate in meter splitting would be willing to switch to a primary Supplier offering meter splitting • Current proposal is for mandatory participation • Should participation be on all tariffs (with Supplier cost implications)? • Is there potential to offer ‘meter splitting’ tariffs with different pricing structure and billing arrangements? • Can there be limits of optionality on what other Suppliers can supply? • E.g. can you have mandatory participation for special purpose Suppliers such as EV supply, but not for P2P trading resulting in effective net 0 consumption for primary Supplier?

36. Topics to address in parallel • Interaction with SVT Price Cap • Does the price cap contain sufficient flexibility to enable meter splitting tariffs? • Does the price cap contain sufficient headroom to allow Supplier investment to enable meter splitting? • Would the availability of meter splitting arrangements materially alter the basis on which the price cap was established?

37. Topics to address in parallel • Compatibility with all market segments • Are there any particular impacts on vulnerable customers that will need to be considered and addressed? • Will the arrangements be compatible with customers using Pre-Payment meters? • Can current protocols support multiple Suppliers with a financial stake in amounts pre-paid on the meters? • How would ‘self-disconnection’ work with multiple Suppliers operating on a single meter?

38. Topics to address in parallel • Multilateral contractual arrangements • If there is a single point of billing, will there need to be a multilateral contract framework to outline the interactions between Parties? • How are costs distributed between Parties, or are they charged to the customer by the primary Supplier? • Costs of providing and operating the meter • Costs of providing and operating the updated billing system • Suppliers already have well established processes for billing consumers for variable costs • Are costs the same regardless of how many Parties are operating on the meter? • How are network costs split? • Does the calculation change with fixed capacity based residual charge?

39. Topics to address in parallel • Customer billing arrangements • Optionality of participation • Interaction with SVT Price Cap • Compatibility with all market segments • Multilateral contractual arrangements • Any others?

40. External dependencies • Ofgem • Change of Supplier Licensing? • Switching Programme • Network charging • DTN • New data flows into settlement from CNA • MRA(REC) • Secondary service providers registered or not? • Secondary MPANs or new related entity • DCC • Central Switching Service

41. P379 Use Cases • Peter Frampton

42. Development of use cases • Solution will need to be tested against a number of different use cases • Propose developing a number of scenarios, then considering how solution would work in each scenarios • Ensure process works • Establish impacts on each party in the scenario • Identify interactions and potential unintended consequences • Useful for solution development and decision making • Could check each use case against multiple meter types

43. Use cases to consider • White paper use case • Community Energy + EV

44. Use cases to consider • White paper use case + storage • 4th Supplier with battery ? Battery company (via Supplier D)

45. Use cases to consider • Complex I&C site – is this any different to complex domestic? • On site generation • Independent aggregator • Triad responses? (Still relevant?) Community energy supplier C 2 MWh Site boundary Default supplier A Default supplier B 20kWh 5 MWh 50kWh 10 kWh

46. Use cases to consider • P2P use case • High usage of local energy – effectively 0 consumption for primary Supplier 0.2kWh Primary Supplier 0kWh 0.15kWh 0.15kWh

47. P379 next steps

48. Topics for discussion at next WG • Next workgroup begins to focus on solution design; • Supplier Agent role • New role or expand existing Agent role? • Performance Assurance • Review of use cases • Update on actions from WG1

49. Next Steps • Send out WG meeting notes this week confirming key outcomes and agreed next steps from today, including potential dates for next WG meeting • Post WG Actions: Follow on activities from today

50. Any Other Business