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Network Gas Supply Emergency Acceptances

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Network Gas Supply Emergency Acceptances

Guidance Note

Guidance Note: Network Gas Supply Emergency Acceptances


Approved Modification P448 ‘Protecting Generators subject to Firm Load Shedding during a Gas Supply Emergency from excessive Imbalance Charges’1 was implemented on 7 December 2022 to address the risk to Generators arising from Network Gas Supply Emergencies in Great Britain.

Where a BM Unit includes Generation plant which has been notified of a Load Shedding instruction from the Gas System Operator (GSO) during a Stage 2 or 3 Network Gas Supply Emergency (a “gas curtailment”), it is likely that that the BM Unit will be unable to generate, and, if the generator had already sold that power, the Lead Party of the BM Unit would be exposed to a potentially unmanageable Imbalance Charge, especially if the gas curtailment lasts for longer than just a few Settlement Periods. To mitigate this risk, the Load Shedding instruction will be treated as a type of Bid for BSC purposes.

Acceptance Data relating to these Network Gas Supply Emergency Acceptances (NGSEA) will be processed in two stages:

    • Directly following a Load Shedding Instruction, NGESO will construct BOA(s) which reflect the effect of the Load Shedding instruction on the Generator and submit them into Settlement; and

    • At a time after the event, a Panel Committee will review all evidence provided by the Lead Party and any Subsidiary Parties to any BM Units impacted by the Load Shedding Instruction, and may direct further changes to Settlement data relating to those BM Units.

This Guidance Note expands on the P448 solution set out in the BSC and in BSCP18 “Corrections to Bid-Offer Acceptance Related Data”2, explains the context for the new processes and provides Elexon contact details.

Initial Settlement of NGSEAs

A Load Shedding Instruction from the Gas System Operator - NGSEA) - will be settled initially as one or more Bids.

This will ensure that the Lead Party and any Subsidiary Parties of a BM unit affected by a gas curtailment would not be subject to imbalance charges, which could be extremely large and so could result in those parties becoming insolvent.

NGESO will construct a BOA (or BOAs if the gas curtailment is sufficiently lengthy) to action the NGSEA, which will effectively bring the FPN for that BM Unit down from the submitted value to the revised level following the gas curtailment – usually this would be either ‘0 MW’ or the Stable Export Limit (SEL) for the BM Unit.

NGESO would use ‘best endeavours’ to submit each BOA to the SAA by the end of the second full working day after the initial Settlement Period affected by the gas curtailment (‘D + 2’), and no later than by ‘D + 3’, so that the BOA(s) will be processed in the Interim Information (II) Settlement Run for that Settlement Date, ensuring that no imbalance charges would accrue as a result of the BM Unit being unable to generate power sold before the gas curtailment.

Elexon’s credit-monitoring processes will not ‘know’ about the Acceptances until they are processed in the II Settlement Run. Prior to that, the Credit Cover Percentages for the affected Lead Party and/or Subsidiary Parties may increase, as Metered Data shows the BM Units were not generating. Elexon is obliged (in accordance with Section M3.4.3C of the BSC) to take the gas curtailment into account, and not authorise placing the Parties into Credit Default if any apparent shortage of Credit Cover is caused by the gas curtailment.

If, for any reason, BOA(s) could not be entered into SAA in time to be processed in the II Settlement Run, Elexon would continue to ensure that the Lead Party and/or Subsidiary Parties were not inappropriately placed into Credit Default as a result of the gas curtailment (as per BSC Section M3.4.3C). The BOA(s) would be loaded before the Initial Settlement Run (SF), which would ensure that Parties were not invoiced for inappropriate Imbalance Charges as a result of the gas curtailment. The BOA(s) would be processed in accordance with Section 3.4 of BSCP18 “Corrections to Bid-Offer Acceptance Related Data”.

Subsequent review of NGSEAs

After an NGSEA has been received and processed by the SAA, each BOA entered into Settlement will be reviewed by the Generation Curtailment Validation Committee (GCVC)Panel Committee.

The GCVC will be empowered to direct that changes be made to any P448 BOA. Any such changes shall be entered into Settlement before the Final Reconciliation Settlement Run (RF) for the relevant Settlement Date. Please note that a post-SF amendment to a P448 BOA would not require a Trading Dispute be raised to implement it, unlike other Emergency BOAs which are processed in accordance with BSCP18.

For more details relating to the GCVC, please refer to Appendix 2 of BSCP18 “Corrections to Bid-Offer Acceptance Related Data”.

What should I do if a power station in my BM Unit receives a Load Shedding instruction?

If a power station in your BM Unit receives a Load Shedding instruction, there are several things that you should do:

You must tell the market what’s happened through MEL re-declarations and REMIT notifications.

You must submit Physical Notifications that reflect the position immediately before the Load Shedding instruction was received, if you haven’t done so already.

Grid Code Modification GC01603 allows the Lead Party of a BM Unit affected by a Load Shedding Instruction to do this, rather than be required to submit Physical Notifications that reflect the position resulting from the Load Shedding Instruction.

You should contact Elexon Support4 at the earliest opportunity.

Elexon will then liaise with you and the NGESO to agree the detail of the P448 BOAs which NGESO will issue to the Settlement Administration Agent (SAA), as set out in the next section. This process and the information that you will need to provide is set out in in Section 3.5 of BSCP18 “Corrections to Bid-Offer Acceptance Related Data”.

You must retain records as set out in BSC Section G6.1.2 i.e. such records as may reasonably be expected to assist the GCVC in performing its duties records, including:

    1. relating to the volume of Active Energy bought and/or sold by the Lead Party at the Bid-Offer Acceptance Time for the Network Gas Supply Emergency Acceptance;

    2. that demonstrate (or may allow theGCVCto infer) which BM Unit(s) the Lead Party would have used to deliver that Active Energy; and

    3. that demonstrate (or may allow theGCVCto estimate) the Avoidable Costs that the Lead Party incurred or saved as a result of the Network Gas Supply Emergency Acceptance

Continue to submit appropriate Bid Prices.

Need more information?

For more information please contact Elexon Support.

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