Overview of Supplier Volume Allocation David Osborne

Introduction Supplier Volume Allocation (SVA) Purpose History Supplier Hub and other participants Interface with Central Services

Generation, Transmission, Distribution and Supply Transmission Network (the ‘Grid’) Grid Supply Points 400/275 kV Distribution Network 132 kV Change this slide if not same as Keith using. Where does SVA market sit? Supplier’s customer factory >100 kW Supply Supplier’s customer - domestic GSP Group

SVA History 14 Regional Electricity Boards 1990 – competition in Supply > 1MW 1994 – extended to > 100 kW 1998 – full competition 2000+ – competition in agency services 2001 – NETA Arrangements 2005 – BETTA Arrangements Prior to 1990 … ….competition in Supply included metering Since 2000 – competition in Agent services, and Distribution

Distribution Companies / Grid Supplier Point Groups GSPGs equated to the original 14 RECs There are a few small independent network operators, but the LDSOs’ areas still pretty much match the GSPG areas. Distribution businesses are responsible for managing their network, and providing certain services to Suppliers with customers in their area.

Liberalised market Now in any given GSPG (e.g. Eastern) a customer has a choice of electricity Suppliers Logos here are just examples…

Metering Systems 29 million Metering Systems 314,000,000 MWh demand per year (45% Half Hourly Metered)

Profiling Over 29 million NHH meters Settlement operates on HH basis Consumption is profiled to allocate annualised consumption to Half Hours

8 Profile Classes 1 Domestic 24 * 7 2 2 –rate with night-time electrical storage and immersion heating 3 Non-domestic 4 2 –rate with night-time electrical storage heating 5 - 8 Maximum Demand with load factor of < 20%, 20-30%, 30-40% and >40%

Roles and Responsibilities – Suppliers and SMRAs Supplier Meter Registration Agent (SMRA) 1 per GSP Group SMRA service - LDSO licence requirement Provides a registration service LDSO Party to the BSC Supplier Discharges many obligations through Supplier Agents (MO, DC and DA) Registers “Supplier Hubs” in each GSP Group Supplier Hub = combination of Supplier, Meter Operator, Data Collector and Data Aggregator in each GSP Group Multiple combinations of “Supplier Hubs” operate within each GSP Group Supplier is a Party to the BSC

Roles and Responsibilities – Supplier Agents Supplier Agents (NHH and HH) Meter Operator - asset provider and maintainer Data Collector - data retrieval and processing For NHH - determines EAC/AA data based on Daily Profile Coefficients received from the SVAA Data Aggregator - provides aggregated meter data by Supplier, GSP Group, Profile Class to the Supplier Volume Allocation Agent Supplier Agents are not BSC Parties

Roles and Responsibilities – BSC Agents Appointed by ELEXON to perform certain activities ELEXON cannot be a BSC Agent Supplier Volume Allocation Agent (SVAA) Calculate Supplier volumes Produces Daily Profiles for use by NHH Data Collectors Manages market data Contracts for Sunset Data and Temperature Data Applies GSP Group Correction

Roles and Responsibilities - BSC Agents Profile Administrator Programme of load research in order to collect demand data from customers Derives Regression Coefficients Teleswitch Agent Provides switching times for certain groups of customers

BSC Systems and Processes Processes undertaken by Suppliers/Supplier Agents are highly prescribed in the BSC and procedures Some systems provided centrally and operated under licence EAC/AA software NHHDA software

SVA Process Overview Industry Processes Central Systems Processes Profile Administrator Central Data Collection Agent DC/DA appointments Supplier SMRS Regression Data GSP Group Take Aggregated consumption Data Appointment and Settlement Data SVAA Meter Operator Data Collector Data Aggregator Teleswitch, sunset and temp data Allocated Supplier Volumes Other Data Providers NHH Daily Profile Coefficients Settlement Administration Agent

Timing of Settlement Runs Settlement Day Final Settlement Run 2nd Reconciliation Final Reconciliation Time +5WD +39WD +154WD +30 Months +16WD +84WD +292WD 1st Reconciliation 3rd Reconciliation Post-Final Settlement Run Interim Information Settlement Run This process is repeated for a single Settlement day over a period of at least 14 months. This is designed to account for the more accurate data that will come in, particularly in the NHH market, over time. Therefore we have a series of Reconciliation runs after the Settlement Final run. Most CVA data is final by the II run at 5WD, by some yearly read meters may not provide AAs in the NHH market until the 14 month RF run. There is also the Post Final run, available to process Settlement data that is disputed and can’t be rectified in the normal runs. Here you can see the % standards NHH Suppliers are expected to achieve. If they miss the standards at R3 and RF, Supplier Charges are applied to the volume of energy they fall short by. n/a 30% 60% 80% 97% Reading Targets Supplier Charges

Costs Supplier Volume Allocation SVA Operations Data Transfer Service (DTS) Profiling Software Support Entry Process/Qualification Other SVA Total Cost Year to March 2008 £m 1.59 0.58 0.74 0.87 0.41 0.14 4.33

Electricity Metering & Settlement Jon Spence, ELEXON 8 November 2008

The Ice Cream Test If 50% of annual ice cream sales occur in August And 50,000 ice creams are sold in August What are the annual sales? ______ If 5% of annual ice-cream sales occur on 5th August How many are sold on 5th August? ______

That’s how electricity settlement works! What do profiles look like? How are they used to annualise customer demand? How are they used to estimate Suppliers’ demand in a given half hour?

Yearly Profile – domestic unrestricted April to March

Daily Profile – domestic unrestricted

Winter Weekday – single-rate and dual-rate

Non-Domestic Load Profiles

Non Domestic Maximum Demand

Profiling Cycle Year one – data logged at sample 2,500 customers (split 50-50 between domestic & non-domestic) – confidential process Year two – data analysed Year three – profiles used in Settlement process

Profiling process Temperatures and sunset times switching times Sample data Data Collector SVAA Annualise Meter Advances Daily Profile Production Load Research Regression Analysis Profile Administrator SVAA Recap Deemed Take calculation Yearly Supplier Reports Daily

Data Collector An estimate of annual consumption is extrapolated from meter advance using profile 1,150 kWh in 90 days 4,250 kWh per year (AA)

EACs/AAs Annualised Advance Estimated Annual Consumption the rate of consumption for a Settlement Register over the period between two meter readings. Estimated Annual Consumption an estimated rate of consumption used in Settlement until an AA is calculated similar to an Annual Quantity (AQ) in Gas? This info is then combined with reads for use in Settlement, via AAs and EACs AA (Read definition) Used because reading periods don’t coincide with Settlement Periods So MA needs to be scaled up, then broken down by HH, to allocate to BMU’s for settlement purposes EAC Used for same reason, to fill in gap between last read and Settlement Run, and to aid in predicting consumption, eg for Trading

EAC / AA cycle timeline INITIAL EAC AA 1 EAC 1 AA 1 AA 2 EAC 2 AA 1 AA 2 AA 3 EAC 3 “carried forward” EAC is calculated using latest AA and “brought forward” EAC (weighted using the profile over the meter advance period)

AA Example 1/1/07 31/3/07 MR1 7,000 MR2 9,000 MA = 2,000 MAP∑DPCs = 0.4 Previous EAC = 3000 AA = Meter Advance / MAP∑DPCs NHHDC received DPC’s from SVAA (previous slide) 5,000 kwH = 2,000 / 0.4 =5,000

EAC Example 1/1/04 31/3/04 MR1 7,000 MR2 9,000 MA = 2,000 MAP∑DPCs = 0.4 Previous EAC = 3000 EACnew AA = 5,000 EACnew = AA * (MAP∑DPCs * SP) + EACold * (1-MAP∑DPCs * SP) New EAC – Prop AA + Prop old EAC 4,600 is good Intuitively expect answer to lie bwtween previous EAC, and new AA (because you’re using AA to refine PEAC) EACnew = 5,000 * (0.4 * 2) + 3,000 * (1 – (0.4 * 2)) = 4,600 EACnew = 4,000 + 600

Data Aggregation Estimated yearly demand values are added up for customers with same Supplier, Profile Class, meter configuration by a Data Aggregator to give the estimated yearly demand for Settlement Class or a “super customer”

NHH Data Aggregation NHH Data Aggregator aggregates annualised consumption for each distribution area, Settlement Date and Run Type an AA is used in preference to an EAC a default value is used where there is no AA or EAC

The NHH Settlement Cycle Meter Advance Daily Profiles AA / EAC (Meter) Aggregated AA / EAC (Supplier/ Profile Class) Half Hourly Profiles HH profiled demand (Supplier)

Supplier Volume Allocation Agent applies half hourly profile to aggregated AA/EACs to calculate profiled HH demand per Supplier estimates line losses based on factors from Distribution businesses applies ‘GSP Group Correction’

GSP Group Correction Electricity is metered twice – at customer’s meter and at Grid Supply Point (i.e. entry/exit points to distribution networks) NHH GSP GROUP TAKE NHH HH HH

GSP Group Correction NHH demand (import less export plus estimated line losses) are “corrected” so that total NHH and HH volumes for the Settlement Period equal the GSP Group Take volumes attributable to each Supplier are scaled up or down in each HH/GSP Group via CF since GSP Group correction is effectively distributing “settlement error” amongst Suppliers, it makes sense to correct those categories of consumption that are more prone to error than others NHH is obvious candidate as Settlement Period values are estimated (using profiles) rather than metered.

The Ice Cream Test If 50% of annual ice cream sales occur in August And 50,000 ice creams are sold in August What are the annual sales? ______ If 5% of annual ice-cream sales occur on 5th August How many are sold on 5th August? ______ PrA NHH Data Collector PrA SVAA

Questions ?