Elexon has outlined proposals to adapt the Balancing and Settlement Code (BSC) central services to enable customers to buy power from multiple suppliers.
The code administrator says the reforms would facilitate the creation of innovative business models, such as peer-to-peer trading and rapid switching, which are currently “difficult or impossible to bring to market”.
In a new white paper, Elexon noted that Ofgem is considering moving away from the “supplier hub” principle, whereby consumers can, in most instances, only buy power from a single supplier.
Under this model, the supplier acts as the main intermediary between the consumer and the energy market. Ofgem has described it as a barrier to innovation.
The paper states that any such change would likely have “far-reaching impacts across the complete spectrum of industry governance”.
Elexon has suggested some more “modest” reforms which could be enacted faster, “potentially as early as 2020”.
The firm said customers would continue to have a “default” supplier which would be responsible for metering and settlement.
However, the reforms would enable them to buy electricity from other parties as well by providing a mechanism to amend their default suppliers’ imbalance positions accordingly and inform the suppliers of any adjustments so they can alter their billing.
Elexon said, although this could not be mandated by a modification to the BSC, default suppliers would ideally share these adjustments with their customers by way of a consolidated bill, showing the volume (but not cost) of energy purchased from other parties.
To facilitate this process, the company has proposed to create a new role called a customer notification agent (CNA), which would be fulfilled by the other parties from which customers purchased electricity or the providers of any associated technology platforms.
CNAs would be responsible for notifying BSC central services of the relevant metering arrangements and the volume of any trades. Elexon has suggested that CNAs be required to sign up to the BSC to ensure the adjustments they submit are calculated correctly.
The firm is also exploring the possibility of using blockchain technology to guarantee the accuracy of submissions on the basis it would provide a “transparent and immutable record”.
As well as facilitating peer-to-peer trading and rapid switching, the changes could also enable community energy schemes to share exported generation between members and allow electric vehicle manufacturers to offer leases, including all the electricity needed for charging, on a price per mile basis.
Elexon said it will need to undertake further analysis and consult with Ofgem, BSC parties and peer-to-peer trading scheme developers before it can turn its vision into a reality.