Webinar: Terre, the balancing mechanism and virtual lead parties


National Grid and Elexon will hold a webinar next week on wider access to the balancing mechanism and project Terre.

It will outline steps for companies with flexible assets that wish to access those markets by becoming ‘virtual lead parties’ or VLPs.

The balancing mechanism (BM) is National Grid’s main mechanism for balancing supply and demand in real time. It is currently only open to participants with a supply licence. The electricity system operator wants to increase competition and is working on ways to bring in more providers.

One way is by creating a new type of entity – the virtual lead party.

VLPs will be able to create secondary balancing mechanism units that use either individual assets (load or generation) or aggregated assets in the same grid supply point (GSP) to bid into both the balancing mechanism and the European balancing market (Terre).

The minimum requirement is 1MW and VLPs can provide balancing services without having a supply licence. That also means they are not responsible for managing TNUoS or BSUoS charges.

Terre, the European balancing market, will run in tandem with the GB balancing market. It will allow participants to bid in load or generation (1MW minimum) in 15 minute blocks to deliver within 30 minutes.

While VLPs can bid into both markets, the key difference is that Terre is pay as cleared and the BM is pay as bid. National Grid hopes to launch both wider access to the balancing mechanism and Terre by the end of 2019.

Ahead of that, those wishing to register secondary balancing mechanism units as virtual lead parties will be able to do so via Elexon from February 2019, and will not have to pay as much credit cover as primary balancing mechanism units.

See details here.

Register for the webinar, held 11am 20 December, here.

Related stories:

National Grid on ‘ultimate balancing market’ and how Terre could pan out

National Grid outlines roadmap to bring all flex providers into balancing mechanism

Flexitricity aims for supply licence, eyes BM prize

Limejump: Aggregators will need a supply licence to survive

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