Ofgem has approved a modification to the Balancing and Settlement Code (BSC) that will allow meters for individual assets to be used for settlement.
At the moment, only data from meters located at the boundary points between sites and distribution networks can be utilised for this purpose.
The modification, named P375, was raised by the aggregator Flexitricity in December 2018 and will take effect on 30 June 2022.
Ofgem said the modification will provide opportunities for “more numerous and varied participants to enter the balancing services market” and to do so “without fear of payment inaccuracies”.
The regulator said it will additionally give National Grid Electricity System Operator improved visibility over balancing services and “a better view of the performance of those parties who are providing balancing services through assets located behind the boundary meter, meaning that those parties who perform well can be rewarded accordingly.”
Flexibility chief strategy office Alistair Martin said: “Demand-side flexibility is always about electricity customers helping balance the grid while getting on with the day job. Finally, P375 allows us to separate out these different activities and ensure settlement is accurate.
“P375 achieves much more than that, however. At Flexitricity we’re planning to make heavy use of it to bring new, flexible energy resources – home heating systems and electric vehicle charging – right into the heart of the electricity system. That’s how we can help deliver net zero by putting green energy to work.”
Mark Bygraves, chief executive of BSC administrator Elexon, said: “Currently we do not have much visibility of the actions of smaller asset owners such as storage, and renewable generation at multi-use sites. The introduction of P375 to the settlement arrangements, which are managed by Elexon, will change that, as the fitting of individual asset meters at these units will provide detailed information on their activity.
“It is good news that Ofgem has approved this ground-breaking change as we believe it is an important step forward for the energy transition and progress to net zero. Recognising the role smaller assets can play in keeping the system in balance can improve the business case for building such assets and give further support to innovators.”
Elexon said the modification will also give distribution system operators more accurate control over their networks.