Proposal to allow independent aggregators to trade flexibility in wholesale markets

Enel X has submitted a modification to the Balancing and Settlement Code (BSC) that would allow independent aggregators to trade customers’ flexibility in wholesale energy markets through the newly created role of virtual lead party.

The company said the current arrangements only allow customers to access wholesale markets through their supplier and not through an aggregator as they already can for balancing services, the balancing mechanism and the capacity market.

The role of virtual lead party was introduced through the code modification P344 as part of the preparations for the launch of the since-delayed Trans European Replacement Reserves Exchange (TERRE). It allowed BSC parties to create aggregated balancing mechanism units without becoming the registered supplier for the constituent assets.

However, unless covered by an instruction through the balancing mechanism or TERRE, any flexibility delivered by customers is still currently assigned by the BSC to their supplier. Enel X said its proposed modification – named P415 – would fix this “anomaly” by also allowing virtual lead parties (VLPs) to trade customers’ flexibility in wholesale markets.

This would require that “dispatched flexibility volumes be separated from normal supply volumes, with different parties being responsible for each.”

“In a period in which a customer’s consumption is being varied by a VLP so as to meet a wholesale market commitment, the customer’s supplier’s balancing position should be unaffected,” the company explained in the proposal document. “Any imbalances resulting from the VLP’s portfolio failing to deliver the traded volumes during that period should be the responsibility of the VLP.”

Enel X said the provision of flexibility to wholesale markets should be “stackable with all other flexibility services”, adding that: “Although we anticipate that in most cases the flexibility traded will be reductions in net consumption, there could be useful actions in the opposite direction, so the mechanism should be symmetrical.”

It suggested that the consumption baselines from which usage is varied should be determined using the methodology developed as part of the code modification P376, but said it may also be appropriate for them to be nominated by virtual lead parties provided appropriate safeguards can be found.

Code manager Elexon will present its initial written assessment of P415 to the BSC panel on 8 October.