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Half Hourly Settlement: Unlocking the Benefits of
the Smart Energy Market
Joel Stark 25 February 2016
Shift to Half Hourly Settlement underpins
transformative change for the electricity industry.
This presentation attempts to:
Explain what the changes are
Describe what the benefits could be
Show how aM&T is the essential tool to help
Introduction
‘As we decarbonise, simply building more power
stations and cables to meet demand when the wind
isn’t blowing, or the sun isn’t shining, is neither
sustainable nor efficient. ‘
‘Whatever it looks like, we will need to produce and
consume energy more flexibly in order to make the
most of the opportunities provided. ‘
Ofgem aiming at a flexible energy system
Ofgem Position Paper, 30 September 2015
“Making the electricity system more flexible
and delivering the benefits for consumers”
‘We define flexibility as modifying generation and/or
consumption patterns in reaction to an external signal
(such as a change in price) to provide a service within
the energy system.’
Flexibility defined
Ofgem Position Paper, 30 September 2015
“Making the electricity system more flexible
and delivering the benefits for consumers”
New forms of flexibility all depend on
Half Hourly Settlement
Storage Embedded
Generation Time of Use
Half Hourly Settlement
“Following discussions with
Ministers, … Our first goal is
to deliver cost effective half
hourly settlement. We want
this in place early 2017.”
Ofgem to Elexon, 17 December 2015
Existing Legislation:
1994: Mandatory for largest ~125,000 supplies
April 2017: Mandatory for next largest ~175,000 supplies (P272)
Future Legislation:
Early 2017: Elective Settlement for all SME and Domestic supplies
Mid 2018: Systems in place for Mandatory Settlement for all SME and Domestic supplies
Half Hourly Settlement Timeline
Ofgem wants system flexibility, and to ensure regulatory environment which drives rapid innovation and competition
Shift to Half Hourly Settlement is fundamental – it enables parties to offer clear pricing signals
TOU tariffs are the mechanism that deliver price signals and drive change;
they incentivise demand side response
but also bring additional complexity
We are on the brink of transformative change
With TOU, up to 30% of costs in red band
Night
Day
DUoS Red
DUoS Amber
2 part tariff
2 part tariff
with DUoS
Focus on red band unlocks other benefits,
including Triad
Hard to know which day of the week Triad will fall…
…but you can be confident the Triad will fall in the red band
0
5
10
15
20
25
30
Monday Tuesday Wednesday Thursday Friday
Number of
Triads
Day
0
10
20
30
40
50
60
70
12:00 14:00 16:00 18:00 20:00 22:00
Number of
Triads
Time
Ofgem is now driving change and prioritising the
transition to half hourly settlement
Energy profiling alone reveals only half the picture:
In order to surface the market’s price signals, we now
need to visualise half hourly costs including energy,
transmission and distribution
aM&T is the essential software tool for managing
energy and costs
Wrap up
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