ELEXON consults on impact of smart metering on electricity settlement in U.K.


London, U.K. — (METERING.COM) — May 6, 2010 – Britain’s balancing and settlement company ELEXON has launched a consultation on the impact of advanced and smart meters on settlement, particularly in the domestic and small commercial markets.

The aim is to identify any improvements or opportunities, particularly in the settlement of half hourly data, in order to ensure that the wholesale electricity market seizes the opportunity to facilitate the most efficient, effective and economic processes.

Currently, these markets are settled on periodic meter readings over periods varying between a month, 3-6 months and a year, and then estimates are calculated for each half hour (as there are wholesale prices for each half hour). The rollout of smart meters in the domestic market and advanced meters for larger non domestic companies could bring large changes to this process, as settlement could now be based on actual half hourly consumption data, rather than the estimated process. However, this depends on how suppliers will be submitting readings from these advanced or smart meters into settlement, i.e. for individual half hours or longer periods.  

Currently in the half-hourly market approximately 115,000 meters are settled on half-hourly basis, and around 2,500 are in the elective half-hourly sector (i.e. demand or generation under 100kW).

Among the approximately 164,000 large customers, there has been considerable rollout of advanced meters already, with up to 80,000 advanced meters potentially to be installed by Summer 2010. In the domestic and small commercial categories, all 29 million customers are required to have smart meters by 2020, all of whom could be settled half-hourly. Thus, there is the potential for significant change to the half-hourly market and settlement.

According to the consultation review the ELEXON-led Profiling and Settlement Review Group (PSRG), which is undertaking the review, feels that efficiencies and savings could be achieved if all meters are settled half-hourly, both centrally and with balancing and settlement parties. In particular the Group feels that the reconciliation timetable could be shortened for half-hourly settlement, reducing the significant number of settlement cash flows between the initial settlement and final reconciliation runs. Removing this would mean less supplier internal financial and settlement processes, and could also help suppliers in their financial planning.

The consultation seeks to solicit the views of suppliers and other interested parties on the perceived barriers to settling customers in the elective half-hourly market as opposed to the non-half-hourly meter advance processes, and on how customers are being or will be settled in the rollout of advanced and smart meters.

These will enable ELEXON to understand how the elective half-hourly market is likely to grow and whether the current balancing and settling settlement arrangements need to be changed.