P270: The Application of Line Loss Factors to GSPs that ... · Make provision for the assignment of LLFs to particular types of GSP. Applicability of P270 The particular issue identified

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© ELEXON Limited 2011

Stage 04: Draft Modification Report

P270: The Application of Line Loss Factors to GSPs that are not Transmission-interconnected

The BSC does not permit application of a Line Loss Factor to a Grid Supply Point, including Offshore Transmission Connection Points, a GSP type introduced by the OFTO arrangements.

P270 proposes that distinction should be made between GSPs

based on how they are interconnected with the Transmission

System and LLFs should be applied to GSPs in specific

circumstances.

The Panel recommends Rejection of P270 Proposed Modification

High Impact: None

Medium Impact: LDSOs, Transmission Company, CDCA

Low Impact: Suppliers and embedded generators (via LLF and GSP Group Correction effects) all Parties (via Transmission Losses), ELEXON

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Contents

1 Summary 3

2 Why Change? 5

3 Proposed Solution 6

4 Impacts & Costs 7

5 Implementation 7

6 The Case for Change 8

7 Panel Discussions 9

8 Consultation Responses 10

9 Recommendations 12

10 Further Information 12

Attachment A: Detailed Assessment 12

Attachment B: Legal Text Proposed 12

Attachment C: BSCP25 Redlined Changes 12

Attachment D: BSCP75 Redlined Changes 12

Attachment E: BSCP128 Redlined Changes 12

About this document:

This document is the P270 Draft Modification Report, updated following the P270 Report

Phase industry consultation for presentation to the Panel on 14 July 2011. The Panel will

consider the consultation responses received and the recommendations of the updated

report and agree a final view on whether P270 should be made. The final Modification

Report will then be produced and sent to the Authority for decision.

Any questions?

Contact: Dean Riddell

dean.riddell@

elexon.co.uk

020 7380 4366

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1 Summary

Why Change?

The BSC does not allow a Line Loss Factor (LLF) to be assigned to a Grid Supply Point

(GSP). LLFs are assigned to Boundary Points Metering Systems to account for the losses

considered to be caused, or relieved, on a Distribution System by a flow at that Boundary

Point. A GSP connects a distribution system to the Transmission System and is not

considered a user Boundary Point. P270 contends that LLFs should also be assigned to

GSPs that connect electrically isolated elements of the Transmission System to a

Distribution System.

P270 contends that under the current BSC baseline the flow to a Distribution System from

an Offshore Transmission Connection Point will distort the cost reflectivity of losses

allocated to other Distribution System users, and that the System Operator does not have

visibility of the full impact of offshore networks that connect to a Distribution Systems

upon the losses of that Distribution System.

Solution

P270 proposes that the BSC distinguish between GSPs based on the interconnection of the

Transmission System to which they are connected and provide for LLFs to be assigned to

appropriate GSPs. This would be accomplished by adding and amending BSC definitions.

In effect, a volume of Distribution System losses (including where the connection relieves

losses) would shift from the other Distribution System users into aggregated Transmission

Losses.

Impacts & Costs

Beside the necessary Code changes, relatively minor supporting changes to several BSCPs

would be required. P270 would have a minimal impact on ELEXON and the CDCA service

provider and would not impact central systems. Affected LDSOs would need to amend

their LLF methodologies and determine LLFs for Remote GSPs. Transmission System users

would be impacted by the consequential effect on calculated Transmission Losses. No

significant direct impact on BSC Parties’ systems or processes has been identified.

Implementation

The group recommends that the Implementation Date of P270 should be ten working days

after a decision is received from the Authority.

The Case for Change

P270 contends that remote GSPs differ from GSPs connected to the main, interconnected

Transmission System (which flexibly supply electricity to meet the needs of the Distribution

System), and are more similar to Distribution System users, because such isolated GSPs

use the Distribution System as a means of dispersing electricity flowing from the remote

network to which they are connected.

A key question is whether it is justifiable to shift the effect of Distribution System losses

into Transmission Losses where they result from the operation of an electrically isolated

Transmission System element. The Proposer argued it would promote cost reflectivity in

the allocation of losses, but the majority of the group believed it was not appropriate.

The majority of respondents to the Report Phase Consultation agreed with the Panel’s

views, and there was unanimous support for the legal text and proposed Implementation

Date. The draft BSCP changes were supported by all respondents who gave a view.

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Recommendations

The Panel’s unanimous initial view was that P270 is neutral against Objectives (a), (b), and

(d) and would have a negative impact against Objective (c). The Panel supported the

views and arguments of the majority of the P270 Workgroup.

We recommend that the Panel should confirm its initial recommendation that P270

Proposed Modification should not be approved.

Applicable BSC Objectives

a) The efficient discharge by the licensee [i.e. the Transmission Company] of the

obligations imposed upon it by the Transmission Licence

b) The efficient, economic and co-ordinated operation of the national transmission

system

c) Promoting effective competition in the generation and supply of electricity, and

(so far as consistent therewith) promoting such competition in the sale and

purchase of electricity

d) Promoting efficiency in the implementation and administration of the balancing

and settlement arrangements

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2 Why Change?

A flow of electricity from a relatively isolated GSP (a Remote GSP for the purposes of

P270) onto a Distribution System must physically have some Distribution System losses

associated with it (i.e. some energy is lost in transmission from the point of connection to

the Distribution System to other point(s) on the Distribution System). Additionally, flows

can be considered to reduce losses when taken in the context of the configuration and

operation of the Distribution System as a whole (e.g. where a flow offsets another flow

that would have resulted in greater overall Distribution Losses). However, this is also true

for ‘conventional GSPs’, i.e. GSPs connected to the main, interconnected Transmission

System.

An issue for P270 is whether there is any justification for differentiating between GSPs

based on how they are interconnected (or not) with the rest of the Transmission System,

and then treating GSPs differently with regard to Distribution System losses by allowing

LLFs to be applied to the metered flows of some GSPs. P270 also raises a question around

which participants it is justifiable for the effects of Distribution System losses to fall upon.

The main arguments for and against P270 are summarised below.

Argument for P270

A Line Loss Factor should be applied to a Remote GSP because it behaves differently to a

‘conventional’ GSP (i.e. one that is part of the main, interconnected Transmission System).

A Remote GSP uses the Distribution System to distribute power produced by the

generation to which it is connected without regard to the demand requirements of the

Distribution System (it may be considered a customer of the Distribution System

Operator). Conversely, a conventional GSP supplies power to the Distribution System in

response to its demand, i.e. the Distribution System might be considered the Transmission

System Operator’s customer. If an LLF is not applied to a Remote GSP its effect on

Distribution System losses must be shared in some way between some or all of the other

connectees to the Distribution System, which P270 contends is not appropriate.

The LLF that should be applied to a Remote GSP should be determined by including it in

the Distribution System Operator’s LLF methodology and calculations in the same way as

other elements of the Distribution System. The resultant LLF may be less than 1 (if the

Remote GSP is determined to cause losses on the Distribution System) or greater than 1

(if the Remote GSP is determined to relieve losses on the Distribution System). This would

reflect the arrangements in place prior to the introduction of OFTO arrangements.

Argument against P270

A Line Loss Factor should not be applied to a Remote GSP because LLFs are intended to

adjust energy volumes within a Distribution System in order to apportion losses on the

Distribution System to users of that Distribution System. Whilst it may be argued that a

Remote GSP has an effect on Distribution System losses (in the same way as other

connections to a Distribution System), energy from a ‘conventional’ GSP also physically

affects losses, but it is currently accepted that it is not appropriate to apply an LLF to flows

from a ‘conventional’ GSP. There is no justification to discriminate between ‘conventional’

GSPs and Remote GSPs in the manner proposed by P270.

Application of an LLF to a Remote GSP would result, via the consequent adjustment of the

metered output of that GSP, in an impact on Transmission Losses. This impact would

result in the cost effect (positive or negative) of Distribution System losses associated with

a Remote GSP falling upon, and being shared between, connectees to the national

Transmission System in line with existing BSC rules, which is inappropriate.

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3 Proposed Solution

P270 proposes that the BSC should:

Recognise that physical differences (specifically with regard to losses) exist between

conventional onshore GSPs and types of GSPs that are differently connected to the

Transmission System (i.e. whose connection is remote, such as Offshore Transmission

Connection Points);

Distinguish between GSP types based on the nature of the interconnection between

the GSP and the Transmission System; and

Make provision for the assignment of LLFs to particular types of GSP.

Applicability of P270

The particular issue identified by P270 relates to Offshore Transmission Connection Points,

but the P270 solution would apply on the basis of the nature of the interconnection of the

Transmission System to which the GSP is connected. This is intended to restrict P270 only

to GSPs whose characteristics are considered to justify the use of LLFs.

This approach would allow future network developments to be treated appropriately by

the P270 solution. For instance, if in future an offshore transmission interconnected grid is

developed it would appear inappropriate for the GSPs involved to be treated differently to

onshore GSPs since the offshore grid might act as a flexible energy source/sink in a similar

way to an onshore GSP connected to the interconnected onshore Transmission System.

Retain the pre-OFTO status quo

P270 aims to retain the application of LLFs for Distribution System connections that are

Offshore Transmission Connection Points that existed prior to them becoming Offshore

Transmission Connection Points under the OFTO arrangements. This would reflect the fact

that the change in classification does not change the physical losses arising on a

Distribution System.

Impact of P270

P270 would assign LLFs to meters associated with remotely connected GSPs, such as

Offshore Transmission Connection Points. This would effectively mean that Distribution

System losses attributed to the Offshore Transmission System connection would be taken

into consideration in determining GSP Group Take, and would have a corresponding

opposite effect on calculated Transmission Losses. For example, a 1MW loss allocated to a

Remote GSP’s flow into a Distribution System would reduce GSP Group Take (where inflow

is considered positive) by 1MW and increase Transmission Losses by 1MW. The relevant

loss would be shared among all users of the Transmission System, as with other

Transmission Losses.

Before introduction of the OFTO arrangements, sites affected by P270 may have been

registered in SVA, with their generation affecting GSP Group Take only indirectly. Under

the OFTO arrangements the flow from the offshore network is measured in CVA and

therefore contributes directly to GSP Group Take as an Import to the Distribution System.

Note that P270 aims to assign an LLF to the Offshore Transmission Connection Point, not

to Offshore Generators themselves.

An illustrative example of the application of the P270 solution and an explanation of the

P270 Proposed legal text are set out in Attachment A. Proposed supporting changes to

several BSCPs are also included (Attachments C, D and E).

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4 Impacts & Costs

The changes to the BSC required to implement P270 are set out in Attachment B, and an

explanation of the drafting is included in Attachment A. As well as amendment of Code,

supporting changes would be made to several BSC Procedures (BSCPs 25, 75, and 128) to

reflect the allocation of LLFs to Remote GSPs and ensure processes are documented

clearly and consistently.

ELEXON would also update its procedures and guidance to reflect the P270 solution. We

estimate that changing document and staff training would take 8 Man Days, with an

associated cost of approximately £1920.

No amendment to central systems is needed for P270. The CDCA service provider would

need to update process documentation, but the only practical impact is the application of

the relevant aggregation rules. The service provider has estimated a cost of up to £1000

for the necessary activities but this would be expected to fall under ‘business as usual’.

The only direct impacts of P270 implementation are on LDSOs with connections on their

networks that would be considered Remote GSPs under P270. Such LDSOs would need to

update their LLF methodologies and calculate LLFs for remote GSPs. National Grid and

BSC Parties (as Transmission System users) would be impacted by LLFs being assigned to

Remote GSPs though the consequential effect on Transmission Losses. All activities

arising from these activities would fall under ‘business as usual’, and as such have no

associated cost or lead time for P270 implementation.

5 Implementation

The group considered implementing P270 using an approach where the Code changes

would be made five working days after an Authority decision, with the supporting BSC

changes made in the next suitable BSC Release. The aim of this approach was to limit the

impact of the P270 issue on LDSOs by enabling LLFs to be calculated for Remote GSPs and

applied as soon as possible.

They did not identify any practical problems with this approach, particularly given that only

two LDSOs would be immediately impacted by P270, and the most significantly impacted

site is Robin Rigg, for which an LLF already exists (owing to its operation before the OFTO

arrangements were applied to it). However, the group agreed that in principle all changes

to the BSC and to Code Subsidiary Documents should be made simultaneously wherever

possible.

Since the supporting BSCP changes are relatively minor the group agreed that ELEXON

should draft the changes for inclusion in the P270 Report Phase industry consultation, to

enable their implementation with the P270 Code changes in the event that P270 is

approved.

The group therefore recommends that the Implementation Date of P270 should be ten

working days after a decision is received from the Authority. All Code and BSCP changes

would be made on the Implementation Date.

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6 The Case for Change

Workgroup’s final views against the BSC Objectives

The final majority view of the group was that overall P270 Proposed would not better

facilitate the Applicable BSC Objectives compared with the existing Code baseline. The

majority of the group (five) believed P270 would not improve on the baseline. Two group

members believed P270 would be better overall than the current baseline.

The views of the group are summarised below. Not all members whose views aligned on

the overall effect on a particular Objective necessarily agreed with all the arguments put

forward in relation to it.

Applicable BSC Objectives - pros and cons

Benefits Disadvantages

(a) One member - positive impact:

The Transmission Company has greater

visibility of losses arising in a GSP

Group, potentially promoting efficient

network design because losses can be

taken into account when considering

Distribution System or Transmission-

only connection approach

Majority - neutral impact

(b) Three members - positive impact:

Minor/marginal efficiency benefit due to

increased visibility of losses caused by

non-interconnected Transmission

Three members - neutral impact

One member - negative impact:

Although overall actual losses would be

the same, losses attributed to

Transmission would increase, which in

relation to Transmission System

efficiency is not beneficial

(c) One member - positive impact:

Remove loss allocation distortions,

resulting in appropriate and cost

reflective signals, meaning:

Appropriate losses are used in

calculating LLFs for other sites on a

Distribution System

Losses impact of connection via

Distribution System instead of direct

connection to the Transmission

System (via new transmission lines)

is visible to the Transmission

Company

Majority - negative impact:

Effectively transfers cost of

Distribution System losses to

Transmission users, which penalises

GB Transmission System users

Cost reflectivity might be increased

but singling out some GSPs and not

others is not justified, and the

resultant discrimination ultimately

has a negative effect on competition

Tries to solve a Distribution losses

incentive problem under BSC

Two members - neutral impact

(d) One member - positive impact:

Promotes efficiency and clarity in the

administration of audit and approval of

LLFs under the BSC

Majority - neutral impact

One member - negative impact:

Increases complexity of BSC by treating

types of GSP differently

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7 Panel Discussions

Panel’s consideration of Assessment Report

The Distribution System Operator Representative views do not count in the overall views

of the Panel against the Applicable BSC Objectives. However, the Representative believed

P270 would facilitate Objective (c) because it would be more appropriate for the impact of

Remote GSPs on Distribution System losses to be spread across Transmission System

users instead of being attributed to some or all users of the relevant Distribution System.

They also believed that P270 would have a minor benefit against Objective (d).

A Panel member felt that the comment in the P270 Detailed Assessment that ‘It was

perceived that approval of P242 would have nullified a policy intent explicitly stated by

Ofgem/BERR’ (Attachment A, subsection ‘ELEXON analysis’) might give a misleading

impression of the motives of the Proposer of P242 in raising that Modification.

A Panel member suggested that the underlying issue is defining whether particular losses

are considered as Transmission or Distribution related, which is not a BSC issue. This

member could see arguments both in favour and against P270, but ultimately felt that the

issue it seeks to address is not a BSC issue. The member noted that Robin Rigg, the

specific site that was the driver for raising P270, was built under a different regime (i.e.

prior to the OFTO arrangements).

Another Panel member agreed, and believed that Robin Rigg would remain an anomaly

since it is unlikely that significant further Distribution System-connected Offshore

Transmission will be developed because the OFTO arrangements.

A Panel member questioned whether P270 could be said to improve the cost reflectivity of

losses allocation given that it would result in losses being spread across all Transmission

users, not attributed to a particular participant. Another member suggested this could be

considered justifiable given that the Distribution System losses impact that would be

spread amongst Transmission System users would arise from the operation of a

Transmission System connection.

A Panel member believed that the issues relating to P270 were an area for LSDOs to

pursue with Ofgem, and not a matter to be resolved under the BSC.

Panel’s initial views

The unanimous initial view of the Panel was that P270 Proposed would not better facilitate

the Applicable BSC Objectives overall compared with the current baseline.

All Panel members supported the views of the majority of the P270 Modification Group, as

set out in section 6, above. Based on these views and the considerations detailed above

the Panel unanimously believed that P270 Proposed would not better facilitate the

Applicable BSC Objectives overall and that (compared with the existing baseline) the P270

Proposed solution would:

Have a neutral impact on Applicable BSC Objective (a);

Have a neutral impact on Applicable BSC Objective (b);

Not better facilitate Applicable BSC Objective (c); and

Have a neutral impact on Applicable BSC Objective (d).

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8 Consultation Responses

Summary

The full responses to the P270 Report Phase Consultation are available on the P270 page

of the ELEXON website. We received seven responses, as summarised in the table below.

A slim majority of four respondents agreed with the Panel’s initial view that P270 should

be rejected. Three respondents believed P270 should be approved.

Summary of P266 Report Phase Consultation responses

Question Response

1. Do you agree with the Panel’s initial view that the Proposed

Modification should be rejected?

Yes: 4

No: 3

2. Do you agree that the legal text delivers the intention of P270? Yes: 7 No: 0

3. Do you agree with the proposed redlined changes to BSCPs 25, 75 and

128?

Yes: 5

No: 0

Other: 2

4. Do you agree with the Panel’s suggested Implementation Date? Yes: 7

No: 0

Agree with rejection

Four respondents that believe P270 should be rejected agreed with the arguments put

forward by the majority of the P270 Workgroup and supported by the Panel. Three of the

four agreed P270 would have a negative impact with respect to Applicable BSC Objective

(c) and a neutral impact on Objectives (a), (b) and (d).

One respondent, EDF Energy, also believed that P270 would have a negative impact in

relation to Objectives (b) and (d). EDF Energy note that including some Distribution

System losses in the System Operator incentive to reduce Transmission Losses would raise

complex issues about the interaction between Transmission and Distribution System

operation, which they believe are beyond the scope of P270, and do not believe P270

would better facilitate Objective (b). They also believe P270 would have a negative impact

with respect to Objective (d) by adding complexity to the BSC arrangements.

Disagree with rejection

All three of the respondents that disagreed with the Panel’s initial recommendation, and

supported P270, operate as LDSOs. The response from UK Power Networks suggested

that approval of P270 would resolve a conflict caused by the introduction of the OFTO

arrangements.

The P270 Proposer, Electricity North West Limited (ENW), confirmed that its views remain

the same as when it raised P270, i.e. that P270 would have a positive impact with respect

to Applicable BSC Objectives (a) and (c), and argued against the case for rejecting P270.

ENW believed that two of the main arguments against P270 relate to Objective (c) (that

P270 would transfer the impact of some Distribution System losses into Transmission

Losses, penalising Transmission System users, and that it would not improve cost

reflectivity because losses would be spread across Transmission System users, not

attribute them to a particular participant) ignore that under the OFTO arrangements the

Transmission Company itself is a Distribution System user (they are DCUSA signatories and

liable for DUOS charges).

ENW believe it is appropriate that the Transmission Company should be allocated

Distribution System losses caused by such connections, and argue that this would allow

http://www.elexon.co.uk/Pages/P270.aspx

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consistent application of Objective (c) to all Distribution System users. ENW suggest that

how the cost impact is then allocated to Transmission System users, is a separate matter

and beyond the scope of P270. This view was shared by Western Power Distribution in its

response.

ENW also argue that the materiality of the losses transferred from Distribution to

Transmission under P270 is small compared with overall Transmission Losses, but without

P270 the potential distortion of losses signals could be significant for individual Distribution

Systems users. They believe this should be considered in relation to Objective (c).

Finally, ENW commented that it is hard to understand the view that the P270 issues are

not a matter for resolution under the BSC, and that therefore LDSOs should pursue such

issues with Ofgem, given that matters such as LDSOs’ LLF calculation methodologies are

within the scope of the BSC, and that arguments relating to P270 are relevant to

Applicable BSC Objective (c). ENW felt it would be useful to understand Ofgem’s view on

this.

Legal Text and BSCP Changes

Respondents unanimously agreed the legal text to implement P270 in the BSC. All

respondents that expressed a view on the BSCP changes drafted to support

implementation of P270 supported the proposed drafting. Two respondents declined to

give a view on the BSCP changes.

Implementation

Respondents unanimously supported the proposed P270 Implementation Date and

approach.

Further comments

Three respondents had comments further to their answers to the P270 consultation

questions. In support of P270, Western Power Distribution suggested it would facilitate

calculation of more accurate LLFs by LDSOs, which would improve Settlement accuracy.

ScottishPower’s response noted that in their opinion there is no real defect within the BSC.

They believe that the principles currently set out in the BSC allow for the correct allocation

of losses in a cost-reflective and appropriate way, and the issue experienced by the P270

Proposer is due to problems with the application of their Distribution LLF methodology and

the losses incentives provided through Ofgem. ScottishPower suggest the incentives

should be updated to take into account the OFTO arrangements. Which respect to the

particular case that occasioned P270, ENW’s LLF methodology should allow recalculation of

the requisite LLFs to compensate for the impact of Robin Rigg. ScottishPower felt these

problems are outside the scope of the BSC.

EDF Energy suggested that there might be instances where GSPs not intended to be

Remote GSPs unintentionally fall into the category of ‘Remote GSP’, though they had not

positively identified any. They noted P270 would create interaction between incentives on

the Transmission Company and those applied to affected LDSOs, though they did not think

this interaction would materially affect actual flows, losses or investment on the relevant

networks. EDF Energy also noted that as well as the main impact of P270 on LDSOs, and

consequent impact on the Transmission Company and Transmission System users, P270

would also impact users of an affected Distribution System via small changes to generic

LLFs (and hence GSP Group Correction) and potential changes in site-specific LLFs.

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9 Recommendations

Having considered the P270 Draft Modification Report, we invite the Panel to:

NOTE the P270 draft Modification Report and the consultation responses;

CONFIRM the recommendation to the Authority contained in the P270 Draft

Modification Report that Proposed Modification P270 should not be made;

APPROVE an Implementation Date for Proposed Modification P270 of ten working days

after an Authority decision is received;

APPROVE the legal text for Proposed Modification P270;

APPROVE the P270 Modification Report or INSTRUCT the Modification Secretary to

make such changes to the report as may be specified by the Panel.

10 Further Information

More information is available in:

Attachment A: Detailed Assessment

Attachment B: Legal Text Proposed

Attachment C: BSCP25 Redlined Changes

Attachment D: BSCP75 Redlined Changes

Attachment E: BSCP128 Redlined Changes

All consultation and impact assessment responses received, the P270 Assessment Report

and other P270 documentation are available from the P270 page of the ELEXON website.


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What stage is

this document in the process?

Stage 03: Attachment A: Detailed Assessment for P270

P270: The Application of Line Loss Factors to GSPs that are not Transmission-interconnected

Contents

1 Background 2

2 Terms of Reference 5

3 Illustrative example of P270 solution 6

4 P270 Legal Text 10

5 Initial Workgroup Discussions 13

6 Analysis of the Materiality of P270 17

7 Final Workgroup Discussions 19

8 Costs and Impacts 24

9 Workgroup Membership 25

10 Glossary 25

About this document:

This is Attachment A to the P270 Assessment Report. This attachment provides additional

detail, including details of the Workgroup‟s discussions.

Any questions?

Contact: Dean Riddell

dean.riddell@ elexon.co.uk

020 7380 4366

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1 Background

Line Loss Factors

A Line Loss Factor (LLF) is an adjustment factor applied to readings from a Metering

System to adjust for electrical losses occurring on a Distribution System. At present an

LLF may only be applied to Metering System at a Boundary Point. The aim is to calculate

an associated amount of energy at the Transmission System Boundary for use in

Settlement. LLFs are covered by Section K of the BSC and BSC Procedure (BSCP) 128

„Production, Submission, Audit and Approval of Line Loss Factors‟.

Licensed Distribution System Operators (LDSOs) calculate LLFs and submit them to

ELEXON annually. LDSOs must calculate the LLFs in accordance with an LLF methodology

that complies with the principles set out in BSCP128.

Grid Supply Points

Grid Supply Points (GSPs) are also covered in Section K. Section X of the BSC defines a

GSP as „a Systems Connection Point at which the Transmission System is connected to a

Distribution System and includes an Offshore Transmission Connection Point‟. Each GSP is

the responsibility of a Distribution System Operator, who must ensure Metering Equipment

is in place and registered, except that the Transmission Company (National Grid) is

responsible (as NETSO) for all Offshore Transmission Connection Points.

A GSP is a Systems Connection Point, not a Boundary Point between the Total System (of

Transmission and Distribution) and an end user. As such, an LLF may not currently be

applied to a Metering System at a GSP.

Offshore Transmission Connection Points

Under the Offshore Transmission Owner (OFTO) arrangements, offshore networks at

132kV or higher became part of the Transmission System (or, in the case of existing

networks, will become Transmission System when so designated). Where such a network

connects to an onshore Distribution System, the connection is known as an Offshore

Transmission Connection Point. Offshore Transmission Connection Points are a type of

GSP, and as such cannot presently be assigned an LLF.

Prior to the OFTO arrangements, an LLF calculated by the Distribution System Operator

would be applied to a connection between an offshore generator and an onshore

Distribution System. Under the OFTO arrangements, metering at the Offshore

Transmission Connection Point is CVA registered by the Transmission Company and no LLF

is applied.

What is the Issue?

P270 contends that differences between different types of GSPs exist due to the OFTO

arrangements, and the BSC arrangements do not recognise these differences. The

Proposer believes that this results in some types of GSP being treated in a manner that

does not reflect their physical characteristics.

In particular, P270 focuses on the assignment of LLFs, and argues that the characteristics

and situation (geographically and in network terms) of some GSPs, such as Offshore

Transmission Connection Points, means that it would be appropriate to apply LLFs to

them.

In the case of Offshore Transmission Connection Points this would amount to maintaining

the pre-OFTO status quo by continuing to apply LLFs to them. The effect on LLFs

Offshore Transmission Connection Point

A GSP that connects an Offshore Transmission System to an (onshore) Distribution System.

Grid Supply Point

A point where the Transmission System (including an Offshore Transmission System) is connected to a Distribution System.

Line Loss Factor

A multiplier applied to data from a Metering System connected to a

Boundary Point of a

Distribution System to convert it to an equivalent

value for the Transmission

System Boundary.

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assigned to other Metering Systems in the Distribution System is also relevant, since the

effect of the now-Offshore Transmission Connection Points on Distribution System losses

would previously have been taken into account in calculating LLFs for other Metering

Systems.

Interconnected Transmission System and remote connections

The Proposer argues that there is a fundamental difference between the (onshore)

interconnected Transmission System and a remotely connected part of the Transmission

System (i.e. not interconnected directly with other parts of the Transmission System). An

Offshore Transmission System connected to a Distribution System is an example of the

latter, and are used here to illustrate this difference.

P270 contends that a conventional onshore GSP has no LLF because it effectively acts as

an infinite energy source/sink to the Distribution System Operator, i.e. required energy

flows at the boundary (the GSP) are achieved by the addition or reduction of despatched

generation from the interconnected Transmission System. In other words, the

Transmission System does not carry out activities that by their nature increase or decrease

losses on the Distribution System; it responds to the Distribution System‟s energy

requirements.

However, an Offshore GSP (an Offshore Transmission Connection Point) could be

considered to join an offshore Transmission System to the main Transmission System via a

Distribution System. P270 argues that such an Offshore GSP effectively drives energy

across a Distribution System in one direction only, either causing or reducing losses on the

Distribution System (depending on the interaction with the other Distribution System

elements).

The Proposer believes that from the perspective of the Distribution System Operator, the

behaviour of such an Offshore GSP is more akin to that of a Distribution System user,

whose Metering System would receive an LLF representing an increase or reduction in

Distribution System losses, than a „normal‟ GSP connected to the interconnected

Transmission System. P270 contends that LLFs should also therefore be applied to

Offshore GSPs, and similarly remote connection points to the Transmission System (which

would be collectively classed as Remote GSPs under P270).

Impact of the issue

The Proposer believes that it is appropriate in principle to apply LLFs to some GSPs, as

discussed above. In terms of material impact, P270 contends that the identified issue

unjustifiably distorts LLFs applied on an affected Distribution System.

General Effect

The P270 issue might have a significant effect on sites where site-specific LLFs are

calculated on an interactive basis (see below). It has a less pronounced effect on other

sites connected to the Distribution System which are allocated generic LLFs, as they share

expected residual losses according to the LLF methodology.

If the connection of a site previously assigned an LLF becomes an Offshore Transmission

Connection Point the Distribution System losses are the same as before application of the

OFTO arrangements, but losses previously covered by the site‟s LLF are smeared across

other sites in the Distribution System. This could affect Generic and Site Specific LLFs

within the GSP Group and/or impact the Group Correction Factor.

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Under P270, loss adjustments corresponding to losses previously associated with an

offshore generator that was (or would have been) connected directly to a Distribution

System prior to the OFTO arrangements would be allocated to Transmission Losses and

shared by all Transmission users. Under the baseline, without P270, such losses would be

shared between some or all other users of the relevant Distribution System by either

impacting the applicable LLFs or via GSP Group Correction for NHH sites.

Interactively Determined LLFs

If multiple Extra High Voltage sites (requiring site-specific LLFs) are connected such that

their LLFs are calculated on an interactive basis then the identified issue can have a

pronounced and local impact. Prior to the OFTO arrangements all the sites involved in

such a situation would be assigned Site Specific LLFs, calculated to share the losses

between the sites as determined by the Distribution System Operator.

If one or more of the sites in such a situation is affected by the OFTO arrangements the

LLFs of any sites that remain outside the OFTO arrangements may be affected, although

neither the physical network, the characteristics of the sites nor the physical losses arising

on the Distribution System are changed. The Proposer believes that this is inappropriate,

and also considers that the principle of the issue remains the same whether the LLFs

involved are greater than or less than one, though this has a bearing on the practical

effect.

Losses Incentive

The Proposer suggests that the impact on LLFs as a result of an LLF not being applied to

an Offshore Transmission Connection Point could potentially have a direct financial impact

on the Distribution System Operator under the Losses Incentive (Charge Restriction

Condition 7 of the DNO Licence). This is outside the scope of P270, but was noted by the

group.

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2 Terms of Reference

P270 Terms of Reference

The P270 Workgroup comprised members of the Settlement Standing Modification Group. The group considered the following areas:

Ref Area Page ref

1 Development of the P270 Proposed solution 6

2 Any alternative solutions n/a

3 Implementation approach Main report

4 Assessment against the Applicable BSC Objectives Main report

5 Materiality of the issue identified by P270 15

6 Quantification of P270 costs and benefits 15, 22

7 Environmental effects of P270 n/a

8 Impact on industry participants 22

9 Consistency with wider industry arrangements 12

10 Impact on Transmission Losses 13

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3 Illustrative example of P270 solution

In order to illustrate the effect of the P270 solution and how it would work at a high level,

this section sets out an example of a simple arrangement of an offshore generator

connected to a Distribution System, and compares the outcomes under different

circumstances. The example is considered under:

The situation prior to introduction of the OFTO arrangements;

The current baseline arrangements; and

The P270 arrangements.

Note that this is a simplified example and the volumes of energy and other quantities are

not intended to be realistic or representative of the actual materiality of the issue. The

example shows the situation with an LLF of less than one applied, whereas application of

LLFs greater than one is possible and would affect the practical implications for the

relevant participants.

This example is therefore intended only to demonstrate the effect that the assignment, or

not, of LLFs to GSPs whose connection to the Transmission is relatively remote (e.g. an

Offshore Transmission Connection Point) can have on overall Transmission Losses, GSP

Group take and other sites‟ LLFs.

Pre-OFTO Arrangements

Prior to the introduction of the OFTO arrangements, the offshore/onshore connection in

the example was the responsibility of the offshore generator, and the Settlement Metering

was located onshore. For Settlement purposes, the generators output was its net output

(output at the offshore platform minus losses over the offshore/onshore connection)

multiplied by the LLF determined by the Distribution System Operator. In this example the

LLF is less than one, meaning the generator is considered to cause losses on the

Distribution System, so its output is scaled down to take this into account.

In physical energy terms, the Distribution System receives 1100 MWh, made up of 1000

MWh from the Transmission system via a normal onshore GSP and 100 MWh from the

offshore generator. However, the generator‟s energy is subject to its assigned LLF, in this

case 0.99. In this example the generator is registered in CVA, therefore the GSP Group

take is 1099 MWh (if it is SVA registered the GSP Group take would be 1000 MWh).

Transmission System

Distribution

System

Offshore meter

(not Settlement Meter)

reading: 105MWh

Onshore meter (Settlement Meter)

reading: 100MWh

(LLF = 0.99)

Onshore meter

reading: 1000MWh

Offshore

Generator

ONSHORE

OFFSHORE

Onshore/Offshore Boundary

GSP (onshore)

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Distribution System losses considered to be associated with the offshore generator are

allocated to the generator itself via assignment of an LLF to it. There is no impact on

Transmission Losses.

Current Arrangements

The current baseline includes the OFTO arrangements (though they are not yet applied in

all relevant situations) which means that the connection between the offshore generator

and the onshore Distribution System is part of the Offshore Transmission System and as

such is the responsibility of National Grid (as NETSO). The point where the Offshore

Transmission System connects to the Distribution System is an Offshore Transmission

Connection Point, which is a GSP and therefore not given an LLF.

The Settlement Meter for the offshore generator is located at the offshore platform (unless

a dispensation is in place enabling it to be located elsewhere) and the generator‟s full

output at that point is assigned to it for the purposes of Settlement.

The energy lost between the offshore generator and the onshore meter at the Offshore

Transmission Connection Point contributes to the national total Transmission Losses (as

with losses on any other part of the Transmission System). The onshore reading at the

Offshore Transmission Connection Point is not adjusted by the application of an LLF.

Physically, the Distribution System still receives 1100 MWh, made up of 1000 MWh from

the Transmission system via a normal onshore GSP and 100 MWh from the Offshore

Transmission Connection Point. Neither is subject to loss adjustment by an LLF, but the

Offshore Transmission Connection Point is registered in CVA, so the GSP Group take is

1100 MWh.

The offshore generator is no longer subject to Distribution System loss adjustment via LLF

assignment. Any Distribution System loss that would previously have been considered to

be associated with the generator‟s output is allocated between other Distribution System

users; there is no impact on national Transmission Losses.

Transmission System

Distribution

System

Offshore meter

(Settlement Meter)

reading: 105MWh

Onshore meter

reading: 100MWh

Onshore meter

reading: 1000MWh

Offshore

Generator

ONSHORE

OFFSHORE


GSP (onshore)

Offshore Transmission

Connection Point

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P270 Solution

Under P270 an LLF would be assigned to the Offshore Transmission Connection Point.

Since it is based on the same network characteristic and losses it would be the same as

that applied to the offshore generator‟s delivered volumes under the pre-OFTO

arrangements, i.e. 0.99.

P270 would include in the total Transmission Losses the increase (in this example) of

Distribution Losses caused by the energy flowing onto the Distribution System from the

OFTO network. Because the energy metered onshore is adjusted down by the LLF of 0.99

the calculated Transmission Losses across the onshore/offshore connection is increased

compared with that under the baseline (from 105 – 100 = 5MWh to 105 – 99 = 6MWh).

The status of the offshore generator is not affected at all (other than through its share of

the effect on Transmission Losses). Its metered volume remains the same as under the

current baseline, and it would not be allocated any distribution losses. Its treatment

remains equivalent to that of other directly connected generators.

The only effect which would in any way impact the generator is that (like all BM Units)

their TLM values would change slightly due to the very small difference in the national

total of Transmission Losses (in this example the additional 1MWh).

Transmission System

Distribution

System

Offshore meter

(Settlement Meter)

reading: 105MWh

Onshore meter

reading: 1000MWh

Offshore

Generator

ONSHORE

OFFSHORE


GSP (onshore)

Offshore Transmission

Connection Point

Onshore meter reading:

100MWh (LLF = 0.99)

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Comparison

The effects described above are tabulated below. It can be seen that across the three

scenarios the energy physically delivered to the Distribution System does not change.

Example parameters under various arrangements

Pre-OFTO Baseline1 P270

Import from main, onshore

Transmission System 1000 MWh 1000 MWh 1000 MWh

Import from offshore generator 100 MWh 100 MWh 100 MWh

Total energy delivered to

Distribution System 1100 MWh 1100 MWh 1100 MWh

LLF applied to offshore/onshore

connection 0.99

None

(i.e. 1.00) 0.99

OFTO system contribution to

Transmission Losses Zero 5 MWh 6 MWh

Generator‟s Settlement Metered

Volume 99 MWh 105 MWh 105 MWh

GSP Group Take 1099 MWh2 1100 MWh 1099 MWh

Under the baseline (i.e. with the OFTO arrangements) the generator is not directly

responsible for losses over the offshore circuits between the generator and Distribution

System because this connection is now Transmission System and as such these losses are

now considered Transmission Losses. The generator‟s metered volume for Settlement

does not therefore include the losses on the connection, and increases accordingly.

However, it is also apparent that the introduction of the OFTO arrangements into the

baseline affects the GSP Group Take. In this example this would have a diluted effect on

all sites in the Distribution System, but in different circumstances could also have an

impact on a few particular sites, via their assigned LLFs. If other users‟ LLFs do not

change the impact would affect the GSP Group Take, but if LLFs of other users change

GSP Group Take may be unaffected.

Under the P270 Proposed solution the offshore generator‟s metered volume remains the

same as under the baseline but the GSP Group Take is restored to its previous value by

the application of an LLF to the onshore/offshore connection. The contribution of the

OFTO system to Transmission Losses is conversely affected, in this example increasing.

The Proposer believes that these effects are justified by the characteristics of the network

arrangements and reflect a cost reflective allocation of energy volumes to the participants

involved.

1 Baseline is post-OFTO and pre-P270. 2 Assuming (for the purposes of this example) that the Generator is CVA-registered.

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4 P270 Legal Text

P270 concerns the application of LLFs to particular types of GSP, and does not directly

affect the application of LLFs relating to Boundary Points. The two main aspects of the

P270 solution are:

Introduce a distinction between GSP types based on how they are connected to the

Transmission System; and

Enable LLFs to be assigned to appropriate GSP types.

Changes to BSC Sections K and X are proposed to support this approach. The changes are

detailed in Attachment A. This section explains the intent of the changes and how they

are intended to deliver the P270 Proposed Solution.

The group considered using the term „Interconnected‟ in the text (e.g. Interconnected

Transmission System, etc) but felt that this might be potentially confusing given the

provisions in the BSC relating to Interconnectors and the use of the term „Main

Interconnected Transmission System‟ (MITS) in the Transmission Charging Methodology

(which has a similar intent, but is not equivalent to, the P270 term). The group therefore

agreed to use the term „contiguous‟ to describe a network being interconnected in the

sense intended by P270 on the basis that they believed this would be clearer.

Section K, Classification and Registration of Metering Systems and

BM Units

Amend K1.7.3 so it is clear that LLFs associated with Remote Grid Supply Point are not

intended to be excluded from this provision by the P270 solution. Also add words to

reflect the definitions added by P270.

Section X, Definitions and Interpretation

Annex X-1, General Glossary

Add definitions of:

1. Contiguous Transmission System: to specify a subset of the overall

Transmission System which is the „main‟ Transmission System by reference to the

number of GSP Groups to which a network is connected by unbroken Transmission

Assets. The intent is that isolated parts of the Transmission System which are

subject to the P270 provisions are not captured by this definition;

2. Contiguous Transmission System Boundary: to define where a boundary is

part of the „main‟ system by building on the first new definition, above. The

wording reflects the existing Transmission System Boundary definition (which

remains in the BSC); and

3. Remote Grid Supply Point: this is the type of GSP that will fall under the P270

provisions, i.e. will be able to have a LLF applied to it.

Annex X-2, Technical Glossary

Amend the definition of CVA Line Loss Factor to extend it to cover Remote Grid Supply

Points. The new provision applying to Remote Grid Supply Points will reflect the wording

for the existing provision relating to Boundary Points on a Distribution System, which is not

impacted by P270.

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What constitutes Contiguous Transmission System?

This section explains what constitutes Contiguous Transmission System under P270 (and

what does not). In the examples in this section all the connections are such that they are

designated as Transmission System. Some elements of the examples are hypothetical

network elements (i.e. of which no examples currently exist) and are included for

illustrative purposes; where this is the case it is clearly stated.

Contiguous Transmission System

The criterion for Transmission System to be considered Contiguous Transmission System

under P270 is that it is connected to more than one GSP Group by unbroken Transmission

Assets. P270 does not seek to define the main onshore Transmission System as the sole

Contiguous Transmission System, but instead leave open the possibility that other

networks may be considered Contiguous Transmission System if they meet the relevant

criteria.

The diagram above shows part of the main, onshore Transmission System. Because it is

connected to both of the GSP Groups shown (as well as all the other GSP Groups) it is

considered Contiguous Transmission System under P270.

The diagram above also shows an Offshore Transmission network comprising Offshore

Generator A which is connected to both GSP Group A and GSP Group B. Under P270 this

would also be considered Contiguous Transmission System under P270. Note however

that no instances of this arrangement currently exist.

Not Contiguous Transmission System

Any Transmission System not connected to multiple GSP Groups is not Contiguous

Transmission System under P270.

The diagram below shows an Offshore Transmission network comprising Offshore

Generator B which is connected to GSP Group B. Since it is connected to only one GSP

Group it does not constitute Contiguous Transmission System under P270.

The diagram below also shows a hypothetical arrangement where a generator located

onshore is connected to a GSP Group via a network that is designated as Transmission

System, i.e. the generator is not a conventionally embedded generator and is not

Tra

nsm

issio

n S

yste

m

GSP Group B

ONSHORE OFFSHORE

Onshore/Offshore

Boundary

GSP Group A Offshore

Generator A

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connected directly to the main Transmission System. Because it is connected to only one

GSP Group it also would not be considered Contiguous Transmission System under P270.

As stated, this is a hypothetical arrangement; no instances of this set-up currently exist,

and it is difficult to envisage circumstances in which this or a similar arrangement could

arise. However, this configuration is included to illustrate that P270 does not seek to

differentiate between Transmission System networks on the basis that they are offshore; if

a Transmission System network located onshore meets the criteria that identify it as not

Transmission System interconnected under P270 it would not be considered Contiguous

Transmission System.

Summary

The P270 solution, and hence legal text, attempts to differentiate between Transmission

System networks, and their GSPs, based on whether or not they exhibit Transmission

System interconnection. The legal text does this by considering that an interconnected

network will be connected to multiple GSP Groups.

As explained above, the P270 legal text is not drafted to specifically distinguish either:

The main, onshore Transmission System from other Transmission System networks; or

Offshore Transmission System networks from other Transmission System.

Tra

nsm

issio

n S

yste

m

GSP Group B Offshore

Generator B

ONSHORE OFFSHORE

Onshore/Offshore

Boundary

GSP Group A

Onshore

Generator

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5 Initial Workgroup Discussions

The group believed that the key question underlying P270 is whether it is justifiable, in the

particular circumstances identified by P270, to effectively shift the cost of losses occurring

on a Distribution System into the overall Transmission Losses allocated on a uniform basis

between all generation and demand users of the Transmission System.

The Proposer believed that the P270 approach would be appropriate because it would

make the losses consequences of transmission connection and operation decisions visible

to the Transmission Company. The Proposer believed the equality of treatment of onshore

and offshore Transmission connected generation would be maintained under P270.

The view of some group members was that the P270 approach was not appropriate. A

member noted that there are currently no circumstances where Transmission Losses

include Distribution losses, and commented that whereas prior to the OFTO arrangements

the embedded BM Unit received an LLF and picked up the cost of Distribution System

losses, under P270 the cost would be socialised via the Transmission Losses

arrangements.

The group did not believe that any actual change to Distribution or Transmission System

flows or losses would occur if P270 was approved (though they may be „reclassified‟). A

majority felt that future Transmission or Distribution System investment decisions would

not be affected by approval of P270.

A member that did not support P270 suggested that it would be discriminatory to identify

a particular part of the Transmission System and apply an LLF to it. This member believed

that the P270 issues could be handled under the LLF methodologies without change to the

BSC.

The Proposer argued that accommodating Distribution Losses associated with embedded

transmission would inevitably result in distortion of the losses costs for other connectees

to the Distribution System, whether by affecting the site specific LLFs of a limited number

of users or by socialising across all Distribution System users.

A member considered this issue part of a wider issue of flows between GSPs, both from

and to Transmission across Distribution Systems (as in this case) and from and to

Distribution Systems across Transmission, due to embedded generation. Output of

embedded generators could significantly affect flows from individual GSPs on a Distribution

System, affecting Distribution (and Transmission) losses in a manner that could be

significant and difficult to predict.

This member did not believe it was obvious that the type of GSP identified by the P270

solution was different to other GSPs; some, most or all of the flow entering a Distribution

System might be used within that Distribution System, even if an Offshore Transmission

System is isolated from the rest of the transmission system. The member felt this

situation would not be significantly different from that of conventional GSPs, and therefore

to focus on the particular situation identified by P270 could be viewed as discriminatory.

Some of the group felt that, in practice, it was unlikely that P270 would have any effect on

future connection decisions for offshore networks. Since embedded benefits are not

applicable to embedded transmission connections it is unlikely that new offshore networks

will consider connection via Distribution System.

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A member noted that while they were by no means satisfied with the OFTO arrangements

overall they were also keen not to introduce small exceptions/discriminations into the

arrangements.

Consideration of P270 and P242

Though not directly related to P270, rejected Modification P242, „Treatment of Exemptable

Generation Connected to Embedded Offshore Transmission Networks,‟ proposed changes

to preserve the status quo for some participants impacted by the Offshore Transmission

Arrangements.

P242 sought to allow Offshore Exemptable Generators that connect onshore to a

Distribution System the option of being treated in the same way as onshore Exemptable

Embedded Generators. Under the Offshore Transmission Arrangements such generators

must be treated the same as directly-connected Generators.

The Authority rejected P242 because it considered that it would be inappropriate to

introduce different treatment within the category of transmission connected generation,

that seeking to amend the arrangements would arguably decrease regulatory certainty and

hinder effective competition, and that P242 would not promote cost reflective charging

and in any case the issues identified do not fall under the BSC.

There are similarities in the areas relevant to P242 and P270 (i.e. both were raised in

response to changes resulting from introduction of the offshore regime and both aim to

retain the status quo in particular areas in some circumstances). The group considered

the issues identified by the P242 decision to try to give a view on whether they have any

relevance to P270. Further information on P242 can be found on the P242 webpage on

the ELEXON website.

ELEXON analysis

To try to understand and compare how P242 and P270 relate to the intent of offshore

transmission policy ELEXON reviewed the work of the Offshore Transmission Embedded

Transmission Working Group (OTETWG). The OTETWG met three times in January 2008,

and produced a report (which can be found on Ofgem's website).

Section 4 of the report appears to recognise that the Generator should be treated as

directly connected, not embedded. Paragraph 4.1 states that „The power station would be

transmission connected but the transmission connection would be connected via a

distribution system‟.

Section 5 appears to conclude that the LDSO should treat an OFTO connection in the same

way as other users of the Distribution System. Paragraph 5.7.5 reads:

OTETWG noted that under the DCUSA, users of the distribution system are

responsible for installing settlement metering. OTETWG recommends that

current BSC and/or DCUSA arrangements should be developed to ensure that a

distribution licensee is able to treat offshore transmission connections consistently

to other types of customer connections to the distribution system.

The OTETWG conclusions were reflected the June 2008 Ofgem/BERR Regulatory Policy

Update (available from Ofgem's website). This Update included explicit discussion of

transitional arrangements for existing schemes, and stated that it was not appropriate to

give them TNUoS benefits. ELEXON‟s interpretation is that:

It was perceived that approval of P242 would have nullified a policy intent explicitly

stated by Ofgem/BERR; but


http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=1&refer=Networks/offtrans/sf/et

http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=32&refer=Networks/offtrans/pdc/cdr/cons2008

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The P270 solution appears to be consistent with the OTETWG views and therefore

Ofgem/BERR policy intent.

Group discussions

The views of the group were split on the nature of the relationship, if any, between P242

and P270.

The Proposer believed that P270 should be assessed on its merits against the Applicable

BSC Objectives, but that the P270 solution does not conflict with any of the reasons given

for the rejection of P242. P270 is specifically aimed at the connectee to the Distribution

System, i.e. the NETSO, and is not attempting to change the arrangements between the

NETSO and the Offshore Generator.

Furthermore, the Proposer noted that P270 specifically seeks to identify all Transmission/

Distribution connection points whose characteristics meet the P270 criteria, and not

restrict the P270 provisions to Offshore Transmission Connection Points. The intention is

to link the P270 solution to the physical characteristics that drive the need for an LLF, i.e.

not designate the issues identified by P270 as solely relating to the OFTO arrangements.

One member did not believe P242 had any relevance to the assessment of P270, noting

that the assessment of Modifications under the BSC should be based on whether or not

the Applicable BSC Objectives would be better facilitated by the proposed change.

Further to this overall view that considerations relating to P242 were irrelevant and

inappropriate for assessment of P270, the member also disagreed with ELEXON‟s analysis

in a number of areas. In relation to the OTETWG‟s views, they felt that the OFTO

arrangements contain inconsistencies because they were also a product of Use of System

Charging Methodology Modification Proposal GBECM-08, „Introduction of charging

arrangements associated with Offshore Transmission Networks‟. The member also felt

that approval of P270 would contradict the rejection of P242 by designating the Offshore

Transmission Network connecting the generator to the Distribution System as not part of

the „main‟ Transmission System

Another member disagreed with ELEXON‟s analysis because they believed that, although it

appears that it is intended that „embedded transmission‟ be subject to DUoS charges in the

same manner as any other Distribution System user, this does not explicitly apply to LLFs.

This was based on feedback from Ofgem in relation to another BSC change (CP1343) that

„Our understanding is that change proposal 1343 regarding line loss factors for customers

metered at primary substations does not interact with the calculation and billing of use of

system charges to HVS customers. If that is the case we have no reservations with the

proposals at this point in time‟, which the member interpreted to mean there is no

association between DUoS charges under the DCUSA and LLF allocation under the BSC.

The rest of the group considered ELEXON‟s analysis and did not have any strong views on

the matter. Overall, the group did not identify any issues relating to P242 that they felt

would affect their assessment of P270 against the Applicable BSC Objectives or that they

believed should be brought particularly to the attention of the Authority.

Potential interaction between P270 and P229

The group noted that P270 would effectively shift the cost (or saving) resulting from the

effect of a Remote GSP on the losses on a Distribution System from others users of the

Distribution System to the Transmission Loss costs of Transmission System users. P229,

„Introduction of a seasonal Zonal Transmission Losses scheme‟, which is currently awaiting

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an Authority decision, would change how Transmission Losses are allocated from a

uniform national approach to zonal allocation.

While acknowledging that P270 must be assessed against the existing Code baseline, the

group therefore believed it would be prudent to consider how P229 and P270 would

interact if both were approved. Under P229 there are two separate mechanisms for

apportioning transmission losses:

A locational mechanism (implemented using TLFs)

Each BM Unit is given a TLF, which is calculated using a Load Flow Model of Nodes on

the Transmission System and reflects variable losses on the Transmission System.

The TLF values do not reflect any losses on the distribution system caused by OFTO

networks (page 8 of the P229 Modification Report: “Because losses over Distribution

Systems are not Transmission Losses they would be excluded from TLF calculation”).

A non-locational mechanism (using TLMOs as currently)

This mechanism allocates all the Transmission Losses that aren‟t included in the TLF

value, socialising them across users, while maintaining the current 45/55 overall split

between generation and demand.

If both P229 and P270 are implemented losses on a Distribution System resulting from an

OFTO connection would not be reflected in the TLF calculation, but would be smeared

across all users via the TLMO, just as they would be under P270 without P229. The group

therefore agreed that P229 does not have any significant interaction with P270.

LLF definition and LLF Methodologies

In developing the P270 solution the group noted that the BSC definition of an LLF is that it

converts data into an equivalent value at the Transmission System Boundary. However,

the group questioned whether this relatively straightforward description was fully reflective

of the determination of LLFs, which it noted is complex and must accommodate the

variable (non-linear) element of losses on the distribution system.

The group did not reach a view on whether there are inconsistencies between the BSC

definition of LLF and how LDSOs calculate LLFs, but agreed any such issues around the

relationship of the BSC LLF definition and LDSOs‟ LLF methodologies are outside the scope

of P270.

Retrospection

The P270 Modification Proposal suggested that the P270 solution should be applied

retrospectively, though only back to the first OFTO appointment at the beginning of March.

The group considered the guideline criteria that Ofgem has previously noted in relation to

the retrospective application of changes. The group agreed that retrospection does not

appear to be justified for P270. The Proposer agreed not to include retrospective

application as part of the solution for industry consultation, but noted that they would

further consider this and would like to know the views of industry participants.

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6 Analysis of the Materiality of P270

The group estimated the materiality of the P270 issue by calculating the impact of

applying LLFs to sites to which the BSC does not currently permit an LLF to be applied, but

which meet the criteria of the P270 solution. The only such sites identified by the group

were some of the projects in the first round of the Offshore Transmission arrangements.

Note that the generation projects identified are used as a proxy for their onshore

connections, to which the LLFs would actually be applied under P270.

The approximate annual output of each connection was determined by applying a load

factor of 0.3 (agreed by the group) to the calculated annual output of the generator

(based on its stated capacity). The impact of P270 was estimated by applying the LLF to

the annual output. The P270 materiality is the difference between the output before and

after application of the LLF. An estimate of the monetary value of this materiality was

calculated by applying a price of £60 per MWh.

The overall (net) materiality of the P270 issue is estimated to be 6791MWh. If P270 is

approved this would result in an increase of 0.13% in overall Transmission Losses, based

on approximate total Transmission Losses of 5391000MWh in 2010.

Approximate materiality of P270 issue for Round 1 projects

Project Distribution connection

Size (MW)

Estimated output (MW)

MWh/ year

LLF Materiality (MWh/year)

Materiality (£/year)

Barrow Electricity

North West

90 27 236520 1 0 0

Robin Rigg

East&West

Electricity

North West

180 54 473040 0.97 14191 851472

Gunfleet

Sands 1&2

UK Power

Networks

164 49.2 430992 1.004 -1724 -103438

Sheringham

Shoal

UK Power

Networks

315 94.5 827820 1.004 -3311 -198677

Ormonde Electricity

North West

150 45 394200 1 0 0

Greater

Gabbard

None 504 151.2 1324512 - - -

Thanet UK Power

Networks

300 90 788400 1.003 -2365 -141912

Walney 1 None 178 53.4 467784 - - -

Walney 2 Electricity

North West

183 54.9 480924 1 0 0

Totals 2064 619.2 5424192 6791 407445

Greater Gabbard and Walney 1 do not connect to a Distribution System, and therefore

would not receive an LLF under P270 (and therefore do not contribute to the materiality of

the P270 issue), but are included in the table since they are part of the first round of

projects under the Offshore Transmission arrangements. There are no Distribution

System-connected sites in the currently planned subsequent rounds.

LLFs used are „snapshot‟ values that might be applied to the identified sites based on the

present state of the Transmission System and Distribution Systems. Changes on the

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amount of onshore or offshore generation or demand could affect the LLFs of Remote

GSPs (i.e. in the same way such changes might affect other LLFs).

Robin Rigg was the driver for the raising of P270, and its connection was the first to be

designated as Offshore Transmission under the OFTO regime, at the beginning of March

2011. As such an LLF cannot be applied to either the Robin Rigg generator itself or its

point of connection to the Distribution System. The group estimated the approximate

annual output of Robin Rigg as 473,040MWh per year, based on its stated capacity of

180MW. The group estimated the materiality of the P270 issue in relation to the Robin

Rigg connection as 14191MWh per year by using the LLF of 0.97 that was applied to Robin

Rigg prior to the OFTO regime. This is the approximate volume of energy that would need

to be smeared across users of the Distribution System each year under the baseline or,

under P270, would be shifted into Transmission Losses. The group estimated the

monetary value of this as approximately £850,000 per year.

The Robin Rigg connection is the only significant example of the P270 issue identified

(either currently extant or planned). The materiality of other prospective Distribution

System-connected Offshore Transmission is significantly less than that of the Robin Rigg

connection, but may still be material.

The LLFs applied to projects connected to the UKPN network are based on generic LLFs for

Extra High Voltage sites because there is currently insufficient information to calculate site

specific LLFs. These values are the best estimate possible for the purposes of this

analysis, but the site specific LLFs that would eventually be applied to the sites (i.e. under

P270) could be materially different (increased or decreased), which would affect the

estimate of the materiality.

LLFs of 1 are applied to the projects, other than Robin Rigg, connected to the ENW

network, because these sites are connected very close to „conventional‟ GSPs on the

Distribution System. They will therefore neither materially cause nor relieve Distribution

System losses, so ENW has advised that if they were to receive an LLF it would be 1. This

means that the P270 issue has zero materiality in relation to these sites.

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7 Final Workgroup Discussions

Consultation Responses

11 responses were received to the P270 Assessment Procedure industry consultation.

Respondents included Distributors, Suppliers, Generators and Party Agents. Respondents

were split on the question of whether P270 would be an improvement on the existing

arrangements. A slight majority of six respondents believed that the P270 solution would

not better facilitate the Applicable BSC Objectives compared with the existing Code

baseline.

The group did not identify any significant new arguments either for or against P270 in

consultation responses. CE Electric UK argued that:

Not allocating an LLF to an offshore (i.e. remote) GSP could mean that associated

Distribution System losses are shared between other customers and potentially create

a cross subsidy; and

Without P270 large on-shore generators who have an LLF might be at a competitive

disadvantage compared with off-shore generators who do not.

CE Electric UK believed applying an LLF to remote connections would remove this different

treatment of offshore (remote) and onshore (interconnected) generation and associated

potential cross-subsidies, and P270 would therefore better facilitate Objective (c). The

group did not believe that sharing Distribution System losses between other Distribution

System customers would constitute a cross-subsidy, and considered that P270 would not

directly impact competition between generators because even under P270 no LLF would

be applied to a generator on an isolated piece of the Transmission System, but rather to

the GSP connecting that Transmission System element to a Distribution System.

However, the group considered that if P270 is approved there is a possibility that the

effect of a Remote GSP‟s LLF could be passed through to the generator connected to it

(though they acknowledged a further change might be needed to enable this to occur).

Potential Alternatives

Nine respondents did not believe there were any potential P270 Alternative solutions that

the group should consider. SmartestEnergy suggested that an alternative solution was to

require Settlement metering to be at point of connection to the network onshore. The

group did not believe this would address the issue identified by P270 and agreed that it

appeared to be counter to the intent of the Offshore Transmission arrangements.

CE Electric UK asked whether consideration had been given to whether the losses on

Distribution assets (that result in an LLF calculated by the Distributor) could be separated

from the losses on the offshore (remote) Transmission assets. The group believed that in

principle this could be done, but did not believe it would resolve the P270 issue, i.e. if the

LLF-associated losses are identified the question of who they are allocated to remains.

The group did not believe that separating out the LLF losses as suggested would present

any alternative candidates to receive the impact of such losses, i.e. further to either

Transmission System connectees (under P270) or some or all Distribution System

customers (under the baseline).

The group agreed that there were no potential solutions that should be further developed

or progressed as a P270 Alternative solution.

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Legal Text

Only EDF Energy had significant comments on the P270 Proposed legal text. They

suggested that instead of the suggested change to K1.7.3, to remove the reference to a

Boundary Point, either the current wording „at a Boundary Point‟ should be retained or

wording such as „at a Boundary Point or a Remote Grid Supply Point‟ should be used to

extend K1.7.3 to cover Remote Grid Supply Point without affecting its current meaning.

EDF Energy were concerned that the suggested wording would leave open the possibility

that all Metering Systems “on” a Distribution System, even metering between Distribution

Systems with different owners that might not be used in Settlement, should have an LLF.

They believed this would be unnecessarily burdensome, and it should be made clear that

only Metering Systems used for Settlement require an LLF. The group did not agree that

the suggested text would have the result identified by EDF Energy‟s concern, because the

provisions of K1.7.3 only apply to LLFs, they do not identify where LLFs must be applied.

However, the group considered that the suggestion to add „or a Remote Grid Supply Point‟

would be equivalent to the suggested approach of removing the reference to a Boundary

Point and would result in greater clarity. The group therefore agreed that the legal text

should be updated in line with this suggestion, including any further changes to K1.7.3

needed to support this revised approach.

EDF Energy also suggested that the proposed new definitions should refer to „Contiguous

Main Transmission System‟ instead of „Contiguous Transmission System‟. However, the

group established that this suggestion stemmed from a misapprehension that P270 was

aiming to identify a single Contiguous Transmission System that is the „main‟, onshore

Transmission System.

In fact, the P270 solution leaves open the possibility of multiple Contiguous Transmission

System networks to cater for the possible existence in the future of interconnected

offshore networks which are able to respond to the demand of Distribution Systems in a

similar manner to the main onshore Transmission System. The group therefore agreed

that no change was required to the proposed „Contiguous Transmission System‟ definition.

The group noted that under the proposed text:

Connection of an Offshore Transmission System to two Distribution Systems would

cause the relevant GSPs not to be considered Remote GSPs under P270; and

An isolated onshore Transmission System circuit (e.g. connecting to the main

Transmission System through a Distribution System substation) would be considered a

Remote GSP.

The group also agreed that the other issues mentioned in EDF Energy‟s legal text

comments are out of the scope of P270.

Implementation Impacts

The majority of respondents confirmed that they would not be impacted by

implementation of P270. Electricity North West and UK Power Networks are the two

LDSOs with existing or planned connections on their networks that would be considered

Remote GSPs under P270, and accordingly identified impacts on LLF methodologies and

the LLF calculation. National Grid confirmed an impact due to LLFs being assigned to

Remote GSPs and the consequent effect on Transmission Losses.

Other than the two affected LDSOs and the System Operator, only EDF Energy identified

an impact, as a result of processing new LLFs using existing systems and procedures.

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None of the respondents identified cost or lead time impacts as a result of implementation

of P270.

Implementation Approach

Ten respondents supported the proposed implementation approach. However, one

respondent believed that any changes to Code Subsidiary Documents required to support

the P270 solution should be made at the same time as the necessary changes to the BSC.

The group considered that in the case of P270 no issues would arise from the proposed

approach of implementing the P270 solution in the BSC and then making the supporting

Code Subsidiary Document changes in a subsequent date, but agreed that in principle all

changes should be made simultaneously.

They therefore agreed that if the Code Subsidiary Document changes can be drafted in

time to be included in the P270 Report Phase industry consultation, P270 should be

implemented in both the Code and any affected Code Subsidiary Documents at the same

time, i.e. outside of a standard BSC Release and at an appropriate number of days after an

Authority decision. If Code Subsidiary Document changes cannot be consulted upon in the

Report Phase industry consultation the original, staggered implementation approach may

be employed.

Analysis of Materiality

None of the consultation respondents disagreed with the group‟s approach to the analysis

of the materiality of P270. Only analysis of the materiality of the P270 issue for Robin

Rigg was included in the P270 consultation, though it was noted that similar analysis

would be conducted for other sites that meet the criteria of Remote GSP, albeit Robin Rigg

was understood to be the most significantly impacted existing or planned site.

Respondents commented that the Robin Rigg materiality is a fair representation of the

impact of an OFTO connection on a Distribution System, and though it may not appear

significant in terms of overall Transmission Losses it could be significant for individual

customers. CE Electric UK noted that offshore generation is intended to be a growing

sector, so it is possible that any adverse effects of the current arrangements on Parties

may well be amplified over time.

Western Power Distribution agreed with the assessment of the impact on LDSO losses, but

believed that analysis of potential distortion of competition in generation (between

Distribution System-connected and Remote GSP-connected generators) caused by the

current arrangements might further strengthen the case in support of P270.

Unfortunately WPD‟s response was late, and as such was not discussed by the group at its

final meeting, however no analysis was specified that could be conducted to support the

contention that there is potential distortion of competition in generation. Moreover, the

group agreed, with regard to CE Electric UK‟s comments (in response to question 1), that

P270 would not directly impact competition between generators because P270 would see

LLFs applied to a GSP connecting a generator on an isolated piece of the Transmission

System to a Distribution System. Since the group did not identify a potential for distortion

of competition in generation as a P270 issue, and as such placed no weight on this

argument in its views against the Applicable BSC Objectives, there does not appear to be

any need for supporting analysis in this area.

Any discrimination between generators connected to 132kV Distribution (in England and

Wales) and generators connected to 132kV Transmission (in Scotland and Offshore) had

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been considered during development of the BETTA and OFTO arrangements, and is

beyond the scope of the BSC.

Retrospection

None of the respondents supported retrospective application of the P270 solution.

Electricity North West adopted a neutral stance and noted, as Proposer, that it would

make a final decision on whether the P270 solution should be retrospective at the final

group meeting. The group agreed that there was still no basis for retrospective

implementation of P270.

Therefore the Proposer confirmed that retrospective effect would not be part of P270, and

the P270 solution would have effect only prospectively from the point of its

implementation.

Considerations outside the scope of the BSC

In light of the Authority‟s wider statutory remit the consultation asked for any views from

respondents with regard to benefits or disadvantages of P270 that are outside the scope

of the BSC, though such considerations would clearly be outside the scope of P270.

Six respondents believed P270 would have an effect, two that it would not have any effect

they are aware of, while three were neutral.

Electricity North West provided a summary of the benefits they believe P270 would have

outside the BSC, including the DNO Losses Incentive and its view of the implications of

NGET as offshore System Operator being a party to DCUSA and liable for Distribution Use

of System charges in respect of offshore connections to distribution networks.

Scottish Power‟s response noted that it is possible P270 might alleviate non-BSC problems

but that, as a principle, problems should be solved where they occur, which would not be

the case with P270.

Other comments

Five respondents had further comments on P270. Most had been covered elsewhere in

the assessment of P270 or in the consultation responses. However, the group considered

E.ON UK‟s concern regarding ELEXON interpreting a previous Ofgem decisions in relation

to the OTETWG from January 2008 and the subsequent Ofgem/BERR policy update (see

„ELEXON analysis‟ within the section „Consideration of P270 and P242‟). E.ON noted that

as with any BSC proposal assessment of P270 must be in relation to achievement of the

Applicable BSC Objectives.

The group agreed that P270 must be assessed against the Objectives and considered that

the interpretation and discussion of previous proposals and decisions should not be given

prominence in the assessment of P270, though it should be documented as part of the

detailed record of the group‟s discussions.

In line with this, a group member noted that the remarks relating to CP1343 under „Group

discussions‟ within the section „Consideration of P270 and P242‟ should be noted without

undue regard to the interpretation given to them by the member.

Further discussions

Having considered the consultation responses, a group member reiterated their belief that

the issues identified in relation to P270 could be handled under Distributors‟ LLF

methodologies and, if necessary, changes to the DNO Losses Incentive scheme. However,

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the group noted that the Losses Incentive is firmly tied to LLFs used in Settlement, and to

change this would require a change to the Licence Conditions.

The belief of some members, as previously stated, was that, in practice, P270 was unlikely

to have a significant effect on future connection decisions for offshore networks. The

group clarified that this was based on the view that it is generally not cost effective to

connect large offshore generators to Distribution Systems (primarily due to the network

reinforcement required) since there are currently no incentives (i.e. generally, though

there may be drivers in particular cases).

This means that widespread connection of new Offshore Transmission networks via

Distribution Systems is unlikely. Therefore it appears unlikely that P270 would influence

Offshore Transmission connection decisions because sites that would constitute Remote

GSPs under P270 are unlikely to be created either under P270 or under the current

baseline. However, it is nonetheless possible that smaller generation sites might be

connected via Distribution Systems.

Conclusions and recommendations

Taking into consideration the responses to the P270 Assessment Procedure consultation

and their further discussions, the group agreed the P270 implementation approach and

confirmed their final views on P270 against the Applicable BSC Objectives. The group‟s

final views aligned with their initial views, except that one member believed that a

disadvantage that they had originally ascribed to both Objectives (a) and (b) should only

be against Objective (b), meaning the member now believed P270 to be neutral with

respect to Objective (a). The group‟s final views are set out in the main Assessment

Report document.

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8 Costs and Impacts

Costs

ELEXON Cost ELEXON Service Provider cost Total Cost

Man day Cost

8 £1920 £1000 £2920

Indicative industry costs

Zero industry costs for P270 implementation; any consequent activities (such as

calculation of LLFs by LDSOs) conducted under normal processes.

Impacts

Impact on BSC Agent

CDCA Possible impact due to need to include LLFs in Aggregation Rules for Offshore

Transmission Connection Points

Impact on BSC Parties and Party Agents

LDSOs: LLF calculation and calculated Distribution System losses (and GSP Group Take)

Suppliers and embedded generators: no implementation impact (but effects from impact

on GSP Group Take and/or Line Loss Factors for other connections in the GSP Group)

Impact on Transmission Company

Responsible (as NETSO) for Offshore Transmission Connection Points assigned LLFs

Impact on ELEXON

LLF validation ELEXON audits and approves LLFs calculated by Distributors, and under

P270 would do so for LLFs calculated for remotely connected GSPs

Impact on Code

Section K Classification and Registration of

Metering Systems and BM Units

Amend to allow LLFs for Remote Grid

Supply Points

Sections X Definitions and Interpretation Add and amend definitions to support the

P270 solution

Impact on Code Subsidiary Documents

BSCP25 Registration of Transmission System Boundary Points, Grid Supply Points, GSP

Groups and Distribution Systems Connection Points

BSCP75 Registration of Meter Aggregation Rules for Volume Allocation Units

BSCP128 Production, Submission, Audit and Approval of Line Loss Factors

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9 Workgroup Membership

Member Organisation 22.3.11 10.5.11 27.5.11

Adam Lattimore ELEXON (Chairman)

Dean Riddell ELEXON (Lead Analyst)

Mike Attree Proposer (ENW Limited)

Ben Smith National Grid X

Esther Sutton E.ON UK X

Harminder Basi UK Power Networks

Gary Henderson Accenture

Martin Mate EDF Energy X

Garth Graham SSE (part) X X

Bill Reed RWEnpower

Attendee Organisation

Nicholas Brown ELEXON (Lawyer) X

John Lucas ELEXON (Design Authority) X

Sarah Jones ELEXON (Operational support) X

Bimbola Ayo Ofgem (till 1) X

Paul Jones E.ON UK X X

10 Glossary

Acronym Term

BSCP BSC Procedure

GSP Grid Supply Point

LDSO Licensed Distribution System Operators

LLF Line Loss Factor

OFTO Offshore Transmission Owner

OTETWG Offshore Transmission Embedded Transmission Working Group

P270 – Proposed Legal Text v.0.4

Page 1 of 2 © ELEXON Limited 2011

P270 – PROPOSED LEGAL TEXT

SECTION K: CLASSIFICATION AND REGISTRATION OF METERING SYSTEMS AND

BM UNITS (V33.0)

Amend paragraph 1.7.3 as follows:

1.7.3 For the avoidance of doubt, a Line Loss Factor relating to a Metering System at a

Boundary Point or a Remote Grid Supply Point on a Distribution System where such

Distribution System is indirectly connected to the Transmission System (or, in respect of a

Remote Grid Supply Point, the Contiguous Transmission System) must, when applied to

data relating to such Metering System, converts such data into a value at the Transmission

System Boundary (or, in respect of a Remote Grid Supply Point, the Contiguous

Transmission System Boundary), with such Line Loss Factor to take into account

distribution losses both on:

(a) that Distribution System; and

(b) on the Distribution System by which it is indirectly connected to the

Transmission System (or, in respect of a Remote Grid Supply Point, the

Contiguous Transmission System).

SECTION X: DEFINITIONS AND INTERPRETATION

ANNEX X-1: GENERAL GLOSSARY (V51.0)

Amend Section X by inserting the following definitions in alphabetical order into Annex X – 1 General

Glossary:

"Contiguous Transmission

System":

means any part of the Transmission System that is

connected by transmission assets to two or more GSP

Groups;

"Contiguous Transmission

System Boundary":

means the boundary between the Contiguous Transmission

System and all Plant or Apparatus (including Distribution

Systems and other directly connected Plant and Apparatus)

connected to the Contiguous Transmission System;

"Remote Grid Supply Point": means a Grid Supply Point which is not connected to the

Contiguous Transmission System;

ANNEX X-2: TECHNICAL GLOSSARY (V31.0)

Amend Section X by amending the following definition in Annex X – 2 Technical Glossary:

Line Loss Factor Means a multiplier which:,

(i) when applied to data from a CVA

Metering System connected to a

Boundary Point on a Distribution System,

converts such data into an equivalent

value at the Transmission System

P270 – Proposed Legal Text v.0.4


Boundary; or

(ii) when applied to data from a CVA

Metering System connected to a Remote

Grid Supply Point, converts such data

into an equivalent value at the

Contiguous Transmission System

Boundary.

P270 – Proposed changes to BSCP25 v.0.1


P270 – PROPOSED CHANGES TO BSCP25

BSCP25 ‘Registration of Transmission System Boundary Points, Grid Supply Points, GSP Groups and Distribution Systems Connection Points' (Version 6.0)

4.3 Grid Supply Point Registration

REF WHEN ACTION FROM TO INFORMATION REQUIRED MEDIUM

4.3.1 At least 5 WD before the

CPCD1

Agree GSP Id TC LDSO(s) GSP Id Fax/ Email

4.3.2 At least 5 WD before the

CPCD

Submit Registration of GSP Form Part A TC CRA

BSCCo

BSCP25/5.3 Part A ‘Registration of

GSP Part A’, signed by an authorised

person, registered as such using

BSCP38

Fax/ Post/

Email

4.3.3 Within 1 WD of receipt

of 4.3.2

Acknowledge receipt of Registration of GSP

Form Part A

CRA TC Fax/ Email

4.3.4 At the same time as 4.3.3 Check the form has been completed by an

authorised person registered as such using

BSCP38

CRA Internal

Process

4.3.5 Within 1 WD of receipt

of 4.3.2

Inform the relevant LDSO(s) of GSP

registration

Request initial views regarding the allocation

of the GSP to a GSP Group from the relevant

LDSO(s)2 and TC.

BSCCo LDSO(s)

TC

Fax/ Email

4.3.6 Within 2 WD of 4.3.5 Send initial views on the GSP allocation to a

GSP Group

TC

LDSO(s)

BSCCo Fax/ Post/

Email

1 Commissioning Programme Commencement Date: references to the Commissioning Programme Commencement Date in this Section 4.3, are to that of the first circuit associated with the GSP 2 Where the LDSO is operating out of area or it is a shared GSP, other impacted LDSO(s) should be approached for views.




4.3.7 Within 2 WD of receipt of

4.3.6

Outline new GSP registration details to Parties

concerned and requests opinions on which GSP

Group the GSP should be allocated to with

reference to:

(a) Effect of geographic factors in establishing

Daily Profile Co-efficients

(b) Effect of the size of the GSP Group on GSP

Group Correction Factors

(c) Effect of proximity of Boundary Points on

the value of Physical Notifications and Bid-

Offer Pairs to the TC submitted in relation

to Supplier BM Units

BSCCo Relevant

LDSOs

TC

The Authority

All Suppliers

Consultation paper noting any views

already expressed by LDSO(s) and the

TC

Email/ BSC

Website

4.3.8 Within 10 WD of 4.3.7 Provide opinions as requested Relevant

LDSOs

TC

The Authority

All Suppliers

BSCCo Suggested revisions to the GSPs

comprised in a GSP Group or agreement/

disagreement to an LDSO/ TC view with

reference to geographic factors, the size

of the GSP Group, the proximity of

Boundary Points and which GSP Group

the GSP should be allocated

Fax/ Post/

Email

4.3.9 At next convenient Panel

meeting

Present a paper summarising registration

details for the GSP, opinions of Parties on the

GSP Group allocation and any other

recommendations

BSCCo Panel Panel Paper Internal

Process

4.3.10 Within 1 WD of the

Panel Meeting.

Notify of the Panel’s decision on the allocation

of the GSP

BSCCo Relevant

LDSO(s)

TC

Notification of Panel’s decision Fax/ Email

4.3.11 At the same time as

4.3.10

Complete GSP Registration Form with the

allocated GSP Group ID and send the form to

CRA

BSCCo CRA BSCP25/5.3 ‘Registration of GSP’,

signed by an authorised person,

registered as such using BSCP38

Fax/ Email

4.3.12 Within 1 WD of 4.3.11 Acknowledge receipt of GSP Registration

Form

CRA BSCCo Acknowledge receipt Fax/ Email




4.3.13 After 4.3.10and at least

20 WD prior to the EFD3

of the associated

MSID(s)

Submit Aggregation Rules for the GSP and

GSP Group Metered Volume in accordance

with BSCP75

Nominated

LDSO

CDCA BSCP75/4.2 form signed by an

authorised person, registered as such

using BSCP38

Fax/ Post /

Email

4.3.14 After 4.3.10 and at least

20 WD prior to the EFD

of the associated

MSID(s)

Submit Metering System Registration Forms

in accordance with BSCP20

LDSO

TC4

CRA BSCP20/4.1 form signed by an

authorised person, registered as such

using BSCP38

Fax/ Post/

Email

4.3.15 After 4.3.10 and at least

20 WD prior to the EFD

of the associated

MSID(s)

For Remote GSPs, initiate the Line Loss

Factor process (BSCP128) by submitting CVA

LLFs for MSID

LDSO BSCCo CVA Long or Short Format data files in

accordance with BSCP128 Appendix 5.

Signed by an authorised person as per

BSCP38

Fax/ Post/

Email and

Electronic

Spreadsheet

4.3.165 At least 10 WD prior to

the EFD

Establish new Aggregation Rule for GSP

Group Take

CDCA Internal

Process

4.3.176 At least 5 WD prior to the

EFD

Check the following:

(a) Metering System Proving Test

associated with the GSP has been

completed successfully in accordance

with BSCP02

(b) Aggregation Rules have been

successfully registered for the GSP in

accordance with BSCP75

(c) New GSP Group Take Aggregation Rule

has been established

(d) Circuit names stated on the GSP

Registration Forms match circuit names

and numbers on the Meter Technical

Details

CDCA

As submitted in 4.3.1

Metering System Proving Test results

Successfully registered Meter

Aggregation Rules

Meter Technical Details

(Where confirmation has not been

provided the GSP registration shall

remain pending.)

Internal

Process

3 The EFD must be on or before the agreed Energisation Date 4 The obligation to register the Metering System lies with the Transmission Company for Offshore Transmission Connection Points, and the LDSO for other Grid Supply Points




4.3.187 Within 1 WD of 4.3.176 Confirm checks made in 4.3.176 CDCA CRA

Fax/ Email

4.3.198 At least 4 WD prior to the

Energisation Date

If confirmation in 4.3.187 is not received,

inform the TC not to energise the circuits and

agree a new Energisation Date

CRA TC

LDSO

Confirmation that the circuits should

not be energised and agreement of a

new Energisation Date

Post/ Fax/

Email

4.3.201

9

Prior to the EFD of the

associated MSID(s) and

on completion of 4.3.187

Inform the TC of the EFD of the Metering

System(s) associated with the GSP and

authorise the TC to energise the connection on

or after this date

CRA TC Confirmation of EFD and authorisation

to energise on or after this date

Fax/ Post/

Email

4.3.210 On or before EFD of the

associated MSID(s)

Provide Party and BSC Agents with standing

data reports

CRA LDSO

TC

BSC Agents

BSCCo

Standing data reports of data entered

onto the systems (CRA-I007)

Electronic




BSCP75 ‘Registration of Meter Aggregation Rules For Volume Allocation Units' (Version 12.0)

4 Appendices

4.1 Typical Configurations and Aggregation Rules for Volume Allocation Units

4.1.1 Overview

In order to calculate the Metered Volume for a Volume Allocation Unit,

Aggregation Rules have to be submitted by Parties to enable metered data values to

be aggregated to the appropriate Metered Volume. The responsibilities are detailed

in Section R of the Code. This means that Parties have an obligation to register

Aggregation Rules with the CDCA for the following Volume Allocation Units in

accordance with this BSCP (the Volume Allocation Units themselves are registered

with the CRA):

BM Units (other than Interconnector BM Units and Supplier BM Units)

Grid Supply Points (including Remote Grid Supply Points)

GSP Groups

Interconnectors

Listed below are examples of the typical configurations of the four Volume

Allocation Units that require Aggregation Rules to be submitted. Aggregation Rules

are submitted using the Metering System ID and metering subsystem ID and, where

appropriate, BM Unit ID, GSP ID, GSP Group ID and Interconnector ID.

The identifier for a specific flow consists of the Metering System ID, the metering

subsystem ID and the measurement quantity.

The Custom and practice is that Export Meters are used to measure flows

from Plant or Apparatus and Import Meters are used to measure flows to

Plant or Apparatus.

Any flow on an Export Meter is classified as AE. Any flow on an Import

Meter is classified as AI.

In all cases, a net flow measured by a metering subsystem will be calculated

as [AE-AI]. Hence, a net flow from Plant/Apparatus will be treated as

positive and a net flow to Plant/Apparatus will be treated as negative.

Therefore the Volume Allocation Unit which has a net Import will be

treated as negative and a Volume Allocation Unit which has a net Export

will be treated as positive.

All net flows measured by a metering subsystem which are to be accounted

for in a given Volume Allocation Unit will be summed. This will give an

overall net flow into or out of the given Volume Allocation Unit.



All net flows measured by a metering subsystem which are to be accounted

for in any other Volume Allocation Units that are associated with the given

Volume Allocation Unit should be subtracted from the above summated net

flow. The outcome of the above two operations will be the net flow for the

given Volume Allocation Unit.

In the case of GSP Group Takes, a further set of net flows need to be subtracted

from the summated net flows derived in the above steps. These are the net flows

measured by metering subsystems of CVA registered Volume Allocation Units

which are embedded within the GSP Group. The prime responsibility for

identifying these CVA registered Volume Allocation Units lies with the CDCA

(rather than with Parties). However, the CDCA will fulfil this responsibility by

requesting LDSOs to submit Aggregation Rules for GSP Group Take for their

authorised area and the LDSOs shall comply with any such request.

In the illustrations that follow the above logic is used. However, the diagrams show

metering subsystems, rather than individual meters, registers or channels.

4.1.6 Grid Supply Points and GSP Group Takes

GSPs are a number of Systems Connection Points at the same location at which the

Transmission System is connected to a Distribution System. The submission of

Aggregation Rules for GSPs and GSP Groups are the responsibility of the

Distribution System Operator. The submission of Aggregation Rules for GSP Group

Take is the responsibility of the CDCA.

Note that the term Grid Supply Point (as used in the BSC and in this BSCP) includes

Offshore Transmission Connection Points i.e. points at which the Offshore

Transmission System connects to an onshore Distribution System. The process for

submitting Aggregation Rules for Offshore Transmission Connection Points is the

same as for other Grid Supply Points.

Section 4.1.7 describes two different examples of a shared GSP. Section 4.1.8

describes a typical GSP which includes a Distribution Systems Connection Point and

GSP Group Take.

Sections 4.1.9-4.1.11 describe different scenarios with embedded Distribution

Systems where there is more than one Distribution System Operator within a single

GSP Group.

Section 4.1.17 describes considerations relating to a Remote GSP.

4.1.17 Remote GSPs

The submission of Aggregation Rules for Remote GSPs is the responsibility of the

Distribution System Operator. The term Grid Supply Point (as used in the BSC and

in this BSCP) includes Remote GSPs, i.e. GSPs that meet the criteria of a Remote

GSP as defined in the BSC. The process for submitting Aggregation Rules for



Offshore Transmission Connection Points is the same as for other Grid Supply

Points.

Before Aggregation Rules can be submitted for Remote GSPs the Remote GSPs

have to be registered in accordance with Section K of the Code and BSCP25.

Aggregation Rules for Remote GSPs are defined in the same way as Aggregation

Rules for other GSPs (as described in section 4.1.6) except that Aggregation Rules

for Remote GSPs shall include the application of appropriate (Distribution) LLFs.




BSCP128 ‘Production, Submission, Audit and Approval of Line Loss Factors’ (Version 3.0)

3. SUPPORTING INFORMATION

3.1 LLF Methodology Principles

All LLF methodologies are required to comply with the Principles described below:

1. LLFs shall be calculated using a generic (non Site Specific) method except for:

(a) Sites that are connected at Extra High Voltage (EHV); or

(b) Where the customer has requested a Site Specific LLF, and the LDSO is

in agreement; or

(c) Sites that are Remote GSPs.

2. All LLFs shall be calculated to at least 3 decimal places and submitted to 3

decimal places.

3. All Site Specific LLFs shall account for Technical Losses only.

4. All Generic LLFs shall account for all losses (Technical and Non Technical).

5. Site Specific losses and the total Grid Supply Point Group (GSPG) losses shall

be considered in the calculation of Generic LLFs.1

6. Non-EHV Generic LLFs for Import and Export at the same site where the

voltage level is the same shall have the same values.

7. There shall be no more than 2 Low Voltage (LV) and 2 High Voltage (HV)

Generic LLFC Groups, in each GSPG, and at least 1 Generic EHV LLFC

Group.

8. As a minimum, Generic LLFs shall be calculated separately for Day and

Night.

9. LDSOs shall utilise Settlement data from a Settlement Run at R3 or greater

and from a complete 12-month period, for calculating Generic LLFs. The 12-

month period to be used shall be the BSC Year2 3 years prior to the BSC Year

for which the LLFs are being calculated.

10. Adjustments to calculation or application of LLFs, to take into account historic

market wide issues noted in the BSC Auditor’s latest Report, can only be made

if agreed to be appropriate by the Panel.

1 This principle allows Site Specific Losses to be calculated individually or in aggregate and then used in the calculation of Generic LLFs. 2 This principle only applies to the calculation of Generic LLFs. The BSC Year is 1 April to 31 March, LLFs for use in the BSC Year

commencing 1 April 2011 should be calculated using the Settlement Data from the 2008 BSC Year, 1 April 2008 to 31 March 2009.



11. Robust error detection and correction processes shall be in place throughout

the calculation and submission of LLFs.

12. All Generic LLFs shall be re-calculated at least every 2 years.

13. All Site Specific LLFs shall be re-calculated when there has been a relevant

change to the site or network, and at least every 5 years.3

14. No changes shall be made to approved Generic LLFs mid year. Annual

updates will have an effective from date of 1 April. Where default LLFs have

been applied due to an audit failure, these may be replaced with approved

LLFs on a prospective basis as determined when the LLFs resubmitted by the

LDSO have been approved by the Panel.

15. No retrospective changes shall be made to approved Site Specific or Generic

LLFs other than to correct material manifest errors.

16. Changes shall only be made to approved Site Specific LLFs mid year if there has been a

material change affecting the site; and the revised LLFs have been approved by the Panel.

Annual updates will have an effective from date of 1 April. Where default LLFs have been

applied due to an audit failure, these may be updated to the approved LLFs on a prospective

basis as determined from time to time by the Panel.

3 Appendix 3.4 provides clarification on how this should be implemented.