Independent Distribution Network Operator (IDNO) – Entering the Market |
Guidance Note |
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This is an overview of the end-to-end process for entering the market as an Independent Distribution Network Operator (IDNO). Although not formally defined in the Balancing and Settlement Code (BSC), an IDNO is any Party, which distributes electricity for the purposes of the Utilities Act of 2000 in addition to the 14 geographic Distribution Network Operators. As IDNO is not a defined term in the BSC, you will register as a Distribution System Operator (DSO) (also referred to as a Distribution Network Operator (DNO) in some instances) in Central Volume Allocation (CVA), and as a Supplier Meter Registration Agent (SMRA) , Unmetered Supplies Operator (UMSO) and Licensed Distribution System Operator in Supplier Volume Allocation (SVA).
This note includes information on the CVA and SVA entry processes. The two entry processes can run in parallel, and where possible we also align the BSC processes with the Master Registration Agreement (MRA) entry process. It also includes guidance on how get set up as a Distributor in Market Domain Data (MDD).
If you are considering entering the market as an IDNO, Elexon recommends that you contact its Participant Management team (
market.entry@elexon.co.uk) to arrange a meeting with them to discuss your intentions and they can provide further support and guidance. Market Entry meetings are free of charge to potential Parties, and can be held either at Elexon’s office or via teleconference.
It is a requirement for all BSC Parties to complete CVA Market Entry. This section provides an overview of the steps involved and offers on advice on how to complete each step.
The Market Entry process is initiated by acceding to the BSC. At this point, you will be considered a BSC Party, and will be subject to Elexon’s Base Monthly Charge of £250 (+VAT) per calendar month or part thereof.
When you are ready to accede, please submit:
A signed and undated Accession Agreement uploaded to the Elexon Kinnect Customer Solution. This will be countersigned and dated by Elexon on your chosen accession date.
Once Elexon has received the forms and Accession Fee, they will arrange an Accession Date of your preference. Please contact the Participant Management team for templates of these documents.
0.2 Appoint Authorised Signatories
Authorised Signatories are the people appointed to carry out activities under the BSC. Your Authorised Signatory will also need to sign off documentation and forms relating to the market entry process. To appoint your first set of Authorised Signatories Elexon requires either:
BSCP38/5.1 with the first signatories details in both part A and C of the form. Additional signatories only need to complete part C; and
A Director’s letter on company headed letter paper nominating the first signatory. The Participant Management team can provide a template for this.
The Party to add an Authorised Signatory via the Self-Service Gateway (Elexon Kinnect Customer Solution); and
A Director’s letter on company headed letter paper nominating the first signatory. The Participant Management team can provide a template for this.
0.3 Order Communications Line
BSC Parties are required to acquire a communications method for Elexon’s systems to communicate with their own. There are two options for this:
the Low Grade Service. This is a download from the public internet, takes five Working Days to set up and is free to BSC Parties; and
the High Grade Service. This involves the installation of a direct connection to your office, through which data will be pushed in real time. There are costs associated with the High Grade Service.
It is unlikely that an embedded IDNO will receive data from Elexon, and so the
Low Grade Service will be adequate for your requirements. To order your communications line, please complete the
Communications Line request form.
0.4 CVA Qualification testing
BSC Parties are required to complete CVA
Qualification to certify that the
Party’s CVA system can correctly interact with Elexon’s systems and validate the format of any data that they receive. Parties are required to build or procure their own system, which is qualified on an individual basis. The principle of CVA
Qualification is described in
BSCP70 and the
New Participants Guide to CVA Qualification. To complete CVA
Qualification, there are three routes:
Full testing of all relevant flows. The testing is free to entering Parties and can be repeated multiple times if the first test is not successful. The testing takes approximately half a day and can be booked using the BSCP70 booking form;
Waiver testing against an already Qualified Parties system. If you have agreed with a Party that has already Qualified in the role to make use of their system, then you can waiver the testing. To do so complete the BSCP70/02 waiver application listing the flows which you wish to waiver. This should be accompanied by supporting evidence in the form of a letter from the supporting Party;
Opt out of testing. This is not a method that Elexon recommends as it provides no assurance to the Party that they are able to correctly receive any data that they receive. To opt out, submit the BSCP70/01(a) form and acknowledge in the email that not testing is done so at the Parties own risk.
The exact flows you will be required to test will depend upon how the network is set up as to what flows you will expect to receive and use. For instance, it is unlikely that an embedded network will receive data from Elexon. It is the responsibility of participants to assess which data flows they will need to test (if any) or if it is appropriate to opt out of testing.
All BSC Parties are required to register with the Funds Accession Agent (FAA). This is done online via the
Elexon Kinnect Customer Solution or the
BSCP301/04(a) form. Please note that the FAA requires you to have a UK bank account, that is an account with a bank that has a branch based in the UK and used GBP is its principal currency.
0.6 Nominate operational contacts
Elexon requires Parties to nominate contacts for who should be contacted in relation to different activities under the BSC. The nominated persons should be authorised to undertake activities relating to the area for which they have been nominated. Operational contacts are declared online via the
Elexon Kinnect Customer Solution or the contacts spreadsheet, the template for which can be provided by the Participant Management team.
When you have completed CVA
Qualification and, we will register you as a Distributor in our Central
Systems. The registration requires form
BSCP65/01 or this can be completed online via the Self-Service Gateway (Elexon Kinnect Customer Solution).
If completing the BSCP65/01 form, please put the
Party Name in line one of the address followed by the address beginning in line two.
0.8 Register in Market Domain Data
Information on registering in MDD is provided in a separate section below. Some of the required MDD roles require Performance Assurance Board (PAB) approval before they can be registered so MDD roles can either be added in batches or all at once following SVA Qualification.
SVA Qualification is a risk based Performance Assurance Technique (PAT) designed to offer confidence to the PAB and the market as a whole, that you are capable of operating in your chosen role without posing a risk to Settlement.
The SVA
Qualification process is based around the
Self-Assessment Document (SAD), which asks about the organisation’s systems, staff and processes and takes a risk based approach. The risk assigned to an application will be reviewed by Elexon and the
Qualification Service provider (QSP) at various stages throughout the
Qualification process (for example, as subsequent drafts of the SAD are received) and if an applicant’s circumstances change. It is advisable to take a look at the SAD before initiating the
Qualification process to get a feeling for the types of questions and identify any areas you may have insufficient evidence for. Under the MRA, Distribution businesses are required to operate a
Metering Point Registration
System (MPRS) to support the Change of
Supplier process in the UK
electricity market, therefore, as an IDNO, you will be required to Qualify in the role of
SMRA and
UMSO. A Distribution business will also need to Qualify as an
LDSO under
BSCP537.
The main reason that a Distributor is required to have the
UMSO role is so that the
SMRA can create one (or more) Unmetered Supplies MPAN for that Distributor and that any Unmetered Supplies can be aggregated into this MPAN, then sent over the DTN to that Distributor for their billing purposes. Additional information on the operational requirements and responsibilities of
UMSOs can be found in
BSCP520 and in the supporting
Guidance Notes.
The Qualification process is initiated by your accession to the BSC. We will then arrange a meeting between the applicant, Elexon, the QSP and REC to understand your business plans, explain the BSC and REC Qualification processes and agree indicative timescales.
0.2 Completion/submission of the SAD
The SAD is broken down into numerous sections, some generic and some role specific. As an IDNO you will need to complete sections 1-7 (generic), 12 (SMRA), 17 (UMSO) and 20 (LDSO). Each section has an introduction to provide guidance and each question provides more detailed advice of what the QSP is looking for. There is space to answer each question and attach any supporting evidence you wish to provide.
The SAD can be submitted all at once or section by section. It will be reviewed by the QSP who will provide feedback and request additional detail or evidence where an answer is insufficient. This forms an iterative process that can be repeated many times until the QSP is happy with the submission. A risk-based approach is used when reviewing the SAD, supporting evidence and determining the amount of witness testing carried out on an applicant. Elexon assess the risk of an applicant based on the responses provided in the SAD and the supporting evidence.
Following completion of the SAD, the QSP will undertake a site visit to confirm that your processes are in line with the answers provided in the SAD. The level of witness testing will depend on the level of risk the QSP associated with your application, so it is better to give detailed answers in the SAD. Prior to the visit, the QSP will provide you with a scope for the witness testing, so that you can prepare any additional evidence. There is more information in the
QSP’s Approach to Qualification.
Following the witness testing, the QSP will write a report detailing its findings and provide a recommendation for your Qualification application. Elexon and QSP Reports detailing the completion of the procedure are presented to the PAB. Elexon provide a recommendation and all the information needed for the PAB to make a decision on an applicant’s Qualification. The PAB decides on an applicant’s approval for Qualification.
Please note that since the PAB meet once a month (their meeting dates are listed on the
BSC website) and Elexon and the QSP will need to write their reports, it can be six to ten weeks between Witness Testing and the PAB presentation.
0.5 Market Domain Data requirements
As an IDNO, you will be required to register multiple roles in MDD. Some of these will roles will require PAB approval, while others can be entered as part of the Market Entry process. As a minimum, you will need to have the following MDD Roles and PAB Approval for these before you will be allowed to operate in the market:
SMRA - MDD Market Role Code P (PRS Agent) – requires PAB approval;
LDSO - MDD Market Role Code R (Distributor) – requires PAB approval;
UMSO - MDD Market Role Code 3 (Unmetered Supplies Operator) – requires PAB approval.
In addition, there are other MDD Roles that you can have, but these are NOT mandated under the MPRS/
BSCP537 Qualification requirements:
These roles relate to the Distributor being able to respond to queries regarding faults on its network, and provide information around investigations into electricity theft. In particular registration of these roles relates to the distributors ability to receive and process relevant data flows.
The exact roles and requirements may vary slightly depending on the setup of your network and your intended operations. If you require further advice on completing MDD forms, please contact
mddc@elexon.co.uk.
BSCP509 describes the process of registering in MDD and Appendix 1 contains the necessary forms to register roles. Please note that MDD is updated once a month according to the
release schedule, and so this should be taken into account when planning your timescales. Depending on whether you choose to start the MDD process before or after you have gained PAB approval, the MDD requirements can either be done in bulk in one release, or spread over 2-3 releases.
MDD forms should be submitted as Microsoft Word documents where possible.
0.6 Registration of Roles
A new role can only be created in MDD if the
Party has a
Market Participant Identifier (MPID). This is a unique four letter identifier and is created using the
BSCP509 Entity 1 form. This should be accompanied by an Entity 45 form. You can choose your preferred MPID, and it can be reserved in advance by emailing
mddc@elexon.co.uk.
In most cases the MPID will be created in MDD at the same time as some of the required roles. The first set of roles you will need to consider are:
0.7 Creation of MDD operational parameters
When you have completed both the CVA and SVA Market Entry processes, you will need to set up your MDD operational parameters. These are done using the Entity forms in
BSCP509 Appendix 1. The below list gives aims to give a complete overview of what may be required, but the exact requirements may depend upon your intended operations:
Entity 2 – Distributor appointment. Required for each GSP Group in which you intend to operate.
Entity 4 – SMRA. Required for each GSP Group in which you intend to operate.
Entity 52 and/or Entity 53 – Meter Timeswitch Class (MTC), and MTC in Distributor Area. Required for each MTC that you as an IDNO intend to register. It is recommended that IDNOs register MTC 800 (the IDNO does not need to register any Non Half Hourly (NHH) combinations against this MTC 800). This MTC will allow a Supplier to register a new connection where the IDNO has not yet installed a Meter, to get the MPAN into a traded state. MTC 800 indicates that there is no meter on site, and MPAS does not validate it against NHH combinations as it does with all other MTCs.
Entity 17 – Line Loss Factor Class (LLFC). Required for each LLFC that you as an IDNO intend to register. Please note that each time an Entity 17 form is submitted to MDD to create new LLFCs or remove old ones, the LLF team at ELEXON (llfs@elexon.co.uk) should be copied in to the submission email.
Entity 55 – Valid MTC LLFC Combinations. Required for Half Hourly (HH) Metering systems that you intend to register. Note that MTC(s) for you as an IDNO, and LLFC(s), need to have been created via the Entity 53 and the Entity 17 Forms.
Entity 54, Entity 56 and Entity 63 – Non Half Hourly Combinations. Required for NHH Metering systems that you intend to register. Note that SSC needs to exist, MTC(s) for you as an IDNO, and LLFC(s), need to have been created via the Entity 53 and the Entity 17 Forms. Entities 54, 56 & 63 create the Valid MTC SSC LLF Profile Class (PC) for you as IDNO.
The MDD team will be able to provide assistance with this, and can be contacted by emailing
mddc@elexon.co.uk.
As described in the ‘
Market Domain Data requirements’ section, once you have obtained, or are in the process of obtaining, PAB approval, to register as a Distributor in MDD (Role
Code ‘R’) and process any GSP appointments, you will be allowed to submit LLFs. Although Elexon cannot officially process your LLF submissions until Ofgem has confirmed your license, you should allow plenty of time to complete the required forms. If you wish to draft forms in advance, Elexon will be happy to review and provide feedback. LLFs are multipliers applied to generation/consumption
Metered volumes of
Metering Systems connected to distribution networks to account for losses on the network. The submission and validation of LLFs is described in
BSCP128: Production, Submission, Audit and Approval of Line Loss Factors. All LLFs and Calculation Methodologies are audited annually and once approved by the BSC
Panel, the LLFs are then published on the Elexon Portal and also sent to the
SVAA, (and the
CDCA where applicable). The LLFs and Calculation Methodologies need to be submitted before the start of a given year (Annual Audit).
Some LLFs can be submitted during the BSC Year via a Mid-year submission provided that Elexon have audited your methodology and it was approved by the Panel. Please note that all LLF submissions are dependent on the MDD release cycle.
As an embedded network, you will have a choice to either create your own IT systems and Methodology to calculate LLFs, or Mirror Methodologies and Generic Line Loss Factor Classes of the Host LDSO (i.e. LDSO operating in a given GSP group).
0.1 Calculating your LLFs
If you choose to calculate your own LLFs, the process is described in
BSCP128. Elexon will check that the systems you created, Methodology, and the LLFs you calculated are correct and ready to be entered into
Settlement. This is a lengthy process which can take up to several months.
As per
BSCP128, the Key Milestones in this procedure are:
Submission of methodologies;
Review of methodologies;
Approval of methodologies;
Submission of LLFs;
Audit of LLFs;
Panel Approval of LLFs; and
Notification of Approved LLFs to Central Data collection Agent (CDCA)/Supplier Volume Aggregation Agent (SVAA) (as applicable).
In terms of the documents to be submitted, Elexon will require from you (presented in order of submission):
BSCP128 and Appendices can be found on the
BSC website.
Most IDNOs choose to Mirror Host
LDSO’s Methodology and LLFs. This process allows you to choose Generic
LLFCs calculated by Host
LDSOs to be used as your own and applied to sites which connect to your network. Note that you cannot Mirror some sites and Calculate others. To Mirror
LLFCs, please liaise with the LLF Team at Elexon via
llfs@elexon.co.uk, who will be able to provide you with a ‘Combined CSAD’ which contains all audited and approved Host
LDSO LLFs for all
GSP Groups and categories for a given
BSC Year. If you decide to Mirror, the process is easier and you will be able to make a submission Mid-Year. You will still need to submit an MSAD to confirm that you will be Mirroring a Methodology of a Host
LDSO in a given
GSP Group. Overall the process will require you to submit:
The Request template is a document which allows Elexon to establish which Host LDSO LLFCs you intend to Mirror. Elexon will be able to provide you with the template
0.3 How to choose the right LLFC?
Very often, the way that Host
LDSOs group
LLFCs together is dependent on what network usage charges are associated with them. Elexon has no interaction with Charging Statements produced by
LDSOs, as these are not governed by provisions of the BSC. Charging Statements and charging methodologies are regulated by provisions of the
Distribution, Connection and Use of System Agreement (DCUSA).
When choosing the right LLFC you will have to consider the following:
Point of connection; is this Extra High Voltage (EHV), High Voltage (HV) or Low Voltage (LV). Is it substation or network connected?
Is the site NHH or HH metered?
What metering type is at the site? Which Code of Practice (CoP) does it fall under?
The easiest way to establish which LLFCs to Mirror is by checking the Charging Statements of the Host LDSOs, and in MDD for the details of Host LDSO’s LLFCs. The LLFC details are contained within the following MDD tables:
LLFC – this table will give you an idea on what type of site a given LLFC is used for (‘Line Loss Factor Class description’ column).
MTC – amongst other items MTC Meter Type, MTC Payment Type etc.
MTC in PES Area – as MTC above.
Valid MTC LLFC Combination (HH).
Valid MTC SSC Combination (NHH).
Valid MTC LLFC SSC Combination (NHH).
Valid MTC LLFC SSC PC Combination (NHH).
To access MDD tables, please register on the Elexon Portal. The tables can be found by typing ‘
Market Domain Data’ in the search box at the top right-hand side of the page or by the following link:
https://www.elexonportal.co.uk/MDDVIEWER
In GSP_A you choose to have LLFC 10. Start by deciding the type of customers for which this LLFC will be applied to, HH or NHH.
If you decide to use HH, check valid HH Host LDSO LLFCs in ‘Valid MTC LLFC Combination’ MDD table. It lists all applicable half-hourly LLFCs in all GSP Groups. For the purpose of our example we chose to Mirror EELC LLFC 1. You can then check the MTC Id field for available options. Always choose those combinations which will fit how you wish to operate the sites in question (or to fit the kind of metering systems at a given site). In the case of LLFC 1, three MTCs are used by Host LDSO – 845, 846 and 900. Compare those against ‘Meter Timeswitch Class’ MDD table (as shown below).
Check the MTC Common
Code Indicator field - it informs you whether a given MTC is generic or specific. In this case it is ‘
T’, indicating that this MTC is generic. You can find further information on entity forms in
BSCP509 Appendix 2. You can also check the MTC
Meter Type in the ‘
MTC Meter Type’ table:
Another field which might impact which Host
LLFC you will choose is the ‘
MTC Payment type’.
After reviewing all information we chose MTC Id of 845 (‘COP 1-5’; ’HH COP5 and Above With Comms’; ‘T’).
Finally, to find applicable LLFC description for the Entity 17 form, look up the Host LDSO LLFC’s description in the ‘Line Loss Factors’ MDD table.
A similar process would apply to choose NHH LLFC. Choose your LLFC (e.g. 20) and the desired mode of use. Check ‘Valid MTC LLFC SSC Combination’ or ‘MTC LLFC SSC PC Combination’ tables for correct NHH combinations. In our example we chose EELC LLFC 15. The Meter Timeswitch Class Id is 100. It has MTC Common Code Indicator field of ‘F’, hence we need to check its details in ‘MTC in PES Area’ and ‘MTC Meter Type’ and ‘MTC Payment type’ tables. Here we can see that it is ‘TN’ (i.e. Timeswitch Non-Programmable) and ‘CR’ (i.e. Credit type). After identifying all required information, we need to check the Host LLFCs description as per our HH example.
In order to operate a Distribution business, you must obtain a licence to do so from Ofgem, there is further information on
Ofgem’s website. Please contact Ofgem (
licensing@ofgem.gov.uk) to discuss this process further. The processes can be run in parallel – you can begin the BSC Market Entry process before you have been granted a licence but you are not able to complete Market Entry and register as a Distributor without a licence.
In order to fulfil your Distribution licence conditions, you will also be required to accede to the MRA and complete the MRASCO Assurance process, which sets out terms for the provision of
Metering Point Administration Services (MPAS Registrations). The MRA is the multi-party agreement between all licensed
electricity Distribution Businesses and
Suppliers. More information on the MRA can be found at
http://www.mrasco.com/about-the-mra and the Assurance team can be contacted at Assurance
Assurance@gemserv.com.
In addition to the BSC and MRA, there are a number of other industry codes which you may need to become a
Party to. The list of codes can be found on the
Ofgem website with contact details of the relevant
Code Administrator. Your licence conditions will specify what codes you are required to sign up to. If you require further assistance on your obligations please contact Ofgem.
There is no BSC requirement for an embedded network to have a Settlement Meter installed at its Boundary Point. It is usual for a Meter to be installed, but this is primarily used for inter-Distribution Network Operator billing and falls outside of the BSC.
BSC Modification P283 transferred the responsibility for testing Metering equipment from the Meter Operator Agent (as appointed by the Registrant) to the equipment owner. In practice for an IDNO, this means that if you install any measurement transformers (i.e. Current Transformers (CTs) and Voltage Transformers (VTs)) you will also be responsible for commissioning the equipment.
0.4 Profile Administrator Report Data
Once you are operational in the Market, the BSC and MRA requires that a Distributor provides snapshots of the data contained in its SMRS upon BSCCo or PAB request. Currently the snapshot is requested each quarter. This snapshot contains information on all of the MPANs registered on the Distributor’s network and the associated details. Elexon will contact you prior to the submission with details of what fields are required and the format it should be presented in.
The Settlement Snapshot dates are:
15 January;
31 March;
15 July; and
30 September.
The snapshot data is required to be submitted 10 WD after the above dates.
For further information please contact the
BSC Service Desk or call
0370 010 6950.
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