Centrica to become second regulatory sandbox user for flexibility service trial

Centrica will begin a controllable storage heater demand-side response trial using Elexon’s Balancing and Settlement Code (BSC) Sandbox in September following approval by Ofgem.

Energy services and solutions provider Centrica has been granted two-year access to Elexon’s BSC Sandbox – which allows innovators to trial concepts in a live market environment without having to meet the usual BSC rules – to explore the ability of storage heaters to provide demand-side response when needed by dialing down demand.

In tandem with Irish consumer electrical goods firm, Glen Dimplex, British Gas’ parent company will initially bring forward a maximum of 2.5MW of storage heater assets in social housing across sites which have non half-hourly boundary meters – used at points where sites connect to a distribution networks to measure electricity flows to and from assets.

From 2023, market-wide half hourly settlement implementation will demand that electricity generation and use by customers with half-hourly capable boundary meters at their sites are settled using half-hourly readings.

With the upgrading of boundary meters to achieve this running until 2025, Centrica believes it can deliver material benefit to consumers participating in the trial during the two year window such as reduced tariffs and rent subsidies for vulnerable customers or those living in social housing.

Elexon sees the trial of potential benefit to the energy system as a whole through the cutting of system balancing costs and creation of more competition.

Testing new concepts

The proposal will see Centrica participate in the balancing mechanism as a virtual lead party – a role which Elexon and National Grid ESO created in 2019 – allowing independent aggregators to offer services in the balancing mechanism.

BSC rules currently require that a site is settled half-hourly in order for a virtual lead party to operate assets located there. However, a reprieve will allow Centrica to submit information into settlement stating when storage heaters have reduced their demand, as if the site had been settled half-hourly at the boundary meter.

They will do this by using data from meters in the storage heaters to provide half-hourly data in lieu of data from the boundary meter.

Elexon will ensure that electricity volumes resulting from reduced heater demand are properly validated.

News of Centrica’s Sandbox admission comes after Ofgem granted inaugural access to Emergent Energy in May 2021 – “unique permission” which enabled the firm to supply residents in housing developments with green electricity and heat generated onsite through microgrids leased from the developer or landlord.

“Our Sandbox service is playing an important role in the move to a smarter energy system by giving innovators opportunities to test new concepts,” Simon McCalla, Elexon’s chief executive, said.

“We believe that demand-side response will play a big part in the transition to a cleaner, more efficient energy system and we are pleased that the BSC can support a trial which offers new ways for customers to participate in the balancing mechanism.”

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