Using cloud technology to revolutionise our services to the electricity market
Elexon is the manager of the Balancing and Settlement Code (BSC) one of 11 codes that provide the commercial arrangements for companies operating in the energy sector.
A core part of our role is calculating the difference between how much electricity generators and suppliers said they would produce or consume, and what actually happens in real time. It is a process called settlement, and although it may not sound very glamorous, it plays an essential role in the electricity system, where supply and demand of electricity have to be continually matched, so that the lights stay on.
We have been managing settlement for 20 years, using IT systems which have remained largely unaltered as the retail market has developed. The systems were developed to suit the market as it looked in the late 1990s, with large centralised power stations, and a small number of suppliers. The market looks very different today as we have moved to a more localised system, with a far larger number of low carbon generators.
Over the next decade major reforms will be needed if we are to reach Net Zero. Market-wide Half Hourly Settlement (MHHS), one of the biggest changes to the energy sector since privatisation, will be the next big step when it is implemented in 2025. MHHS will use near real-time half-hourly meter data to enable a new breed of flexibility products through the ability to aggregate household demand.
Our settlement systems will be key to unlocking the benefits of MHHS, and it is one of the reasons why we have been developing a new cloud platform – Elexon Kinnect – to replace our ageing settlement architecture.
In January 2021 we delivered the Customer Solution, the first major component of Kinnect. It allows BSC Parties (companies signed up to the BSC) to enter the market through online guided workflow. Parties that are active in the market can also ‘manage their BSC account’ online. This is a first for any energy industry code. The Customer Solution removes the need for tedious paper form-filling, which companies usually have to complete for code processes. In many cases the online Kinnect processes now take just minutes.
In parallel we are migrating all the systems that carry out settlement calculations, to the Kinnect Settlement Solution. Part of Elexon’s role is to help companies develop changes to the BSC, which include major reforms to open up the electricity system to more competition in providing electricity balancing services. Changes such as this can have a major impact on how settlement calculations are made. However, implementing major change on 20-year old systems is not easy to do. Currently some changes can take around a year to implement, with at least a third of that time spent on testing.
Kinnect addresses this problem by using modular components (micro-services) which can be developed quickly in response to changes in market rules, without unduly impacting other services. By using unique self-contained algorithms, which could be individually replaced to deliver large scale changes, or discretely modified for routine changes, we can pick up the pace on reforming the BSC, which is essential for driving forward progress to Net Zero.
Access to wholesale electricity market data helps new and existing companies to develop innovative products and services. Our Balancing Mechanism Reporting Service (BMRS) is a well-used source for this data. Similarly to our core IT systems it also suffers from being an ageing system to which new data, or functionality cannot be easily added.
The third component of Kinnect – the Insights Solution - solves this problem by creating a new data service using native cloud design to receive and process data at scale. We are using best practice data visualisation from the finance sector (e.g. hedge funds) to completely re-imagine our data platform and provide a source that people can use to self-serve their data needs. The new solution provides ‘open’ data by design, in keeping with our commitment to make all BSC data available to anyone, for no extra charge, unless the BSC Panel (which governs the code) says otherwise.
It has been a collaborative effort to develop the Insights Solution as more than 150 people across the industry volunteered to support development and testing of the software. We launched the first version of the solution in October 2021 and we expect to fully decommission BMRS in 2023 after we have migrated all data provision to the new solution.
As the electricity system becomes smarter and more flexible, so must our settlement systems. By moving to replace our ageing architecture with Elexon Kinnect, we can deliver a much better user experience, speedier change and improved value for money for BSC services. Our new platform will also help us to provide quicker support for innovation and change, which will be so important to UK’s Net Zero future.
Author:
Peter Stanley, Director of Digital Operations
Laura Foster
Laura is techUK’s Head of Programme for Technology and Innovation.
