Details of how Elexon and the PAB assess the likely impact of each Settlement Risk on the overall integrity of Settlement, which is set out each year in the Risk Evaluation Methodology (REM)
Details of Elexon and the PAB’s assessment of these impacts for a given Performance Assurance Operating Period (PAOP), which is set out each year in the Risk Evaluation Register (RER)
Details of how Elexon and the PAB mitigate these impacts, which is set out each year in the Risk Operating Plan (ROP) and in the Menu of Performance Assurance Techniques
Specific details of the Settlement processes, failure of which could cause a Risk to materialise, which are set out in the relevant section of the BSC and Code Subsidiary Documents (CSDs) such as the BSC Procedures (BSCPs)

Your Operational Support Manager (OSM) is your first point of contact for Performance Assurance queries and is available to support you.

If you have a more general question about Performance Assurance or Settlement Risk, please raise a ticket through the online Elexon Support portal.

What are Settlement Risks?

A Settlement Risk is any potential failure point within a Settlement process or system that may materialise as an adverse impact to the overall integrity of Settlement.

Typically, any such impact takes the form of either or both:

Consumption or Generation data failing to enter Settlement, usually identified through Settlement Performance, expressed as the amount of actual metered data used to calculate Settlement Volumes; and/or
Incorrect consumption or Generation data entering Settlement, usually identified through Settlement Accuracy (the factor by which the overall volume of energy recorded in Supplier Volume Allocation (SVA) needs to be scaled up or down to match the overall volume of energy recorded in Central Volume Allocation (CVA)) exceeding certain tolerances.

How are Settlement Risks identified?

Elexon identifies Settlement Risks through the systematic analysis of each Market Participants’ obligations under the BSC and CSDs, particularly the steps they are required to complete for the processes set out in the various BSCPs.

Elexon records each step at which a Market Participant is required to complete a specific action as a potential failure point or Risk Factor. All Risk Factors associated with a particular process are then grouped together into Settlement Risks associated with one of four different process areas:

Registration and Appointments
Data Retrieval and Processing
Metering Installation and Maintenance
Central Systems and BSC Agents

The Settlement Risks are recorded on the Risk Ledger. A full list of currently identified Settlement Risks are provided below.

How do Elexon and the PAB manage Settlement Risks?

Most Settlement Risks are managed by the PAB and Elexon through the Performance Assurance Framework (PAF), under which Elexon and/or the PAB apply a range of Performance Assurance Techniques (PATs). More details on the PATs can be found in the Menu of Performance Assurance Techniques, and in the Guidance Notes for the PATs themselves.

Risk Factors associated with processes operated by a BSC Agent are managed by the appropriate Service Owner within Elexon.

Prior to the start of each Performance Assurance Operating Period (PAOP), Elexon and the PAB assess the potential impact of each Settlement Risk using the Risk Evaluation Methodology (REM) and record this in the Risk Evaluation Register (RER).

This RER is used to inform the deployment and scope of the PATs over the PAOP, as set out in the Risk Operating Plan (ROP), although it is important to note that Elexon and the PAB may also deploy PATs outside of this cycle where necessary to protect the integrity of Settlement.

In managing Settlement Risk, Elexon and the PAB make use of two further concepts: Risk Events and Market Issues.

A Risk Event is any event (whether internal or external to the market) that impacts more than one Settlement Risk, such as an economic crisis or disease pandemic. Risk Events often impact the scope of some PATs and require the deployment of others.
Market Issues are common challenges experienced by all or many Market Participants in fulfilling their BSC obligations around particular Settlement processes. In addition to impacting the scope and deployment of PATs, a Market Issue will usually require Elexon to take a leadership role in delivering a strategic response outside of “business as usual” PAF activity.

List of Current Settlement Risks

For detailed information on the Risk Factors for individual Risks, including the Parties, Party Agents, and BSC Parties responsible for ensuring relevant processes are completed, please refer to the Risk Ledger and RER.

Registration and Appointments

REG-01 Metering Point Registration information is created, maintained or transferred incorrectly or not at all
REG-02 Volume Allocation Unit Registration information is created, maintained or transferred incorrectly or not at all
REG-03 Meter Technical Details are transferred incorrectly or at all
REG-04 Settlement Data required for the validation and estimation of energy volumes is created, maintained or transferred incorrectly or not at all
REG-05 Agents are not appointed or de-appointed correctly

Metering Installation and Maintenance

MET-01 Metering Equipment is installed, programmed or maintained incorrectly including where Commissioning is performed incorrectly or not at all
MET-02 Meter Technical Details are created incorrectly
MET-03 Meter Technical Details are not maintained or transferred correctly or at all following changes to Metering Equipment
MET-04 A fault with Metering Equipment, including communications equipment, is not resolved

Data Retrieval and Processing

DAT-01 Metered data is not retrieved physically where remote data is not available
DAT-02 Energy volumes are not estimated correctly or at all where metered data is not available
DAT-03 Metered data is validated or submitted incorrectly or not at all
DAT-04 Manual adjustments to Metered Data are completed or recorded incorrectly or not at all
DAT-05 Revenue Protection processes are followed incorrectly or not at all

Central Systems and BSC Agents

CEN-01 An item within MDD or ISD is created or updated incorrectly or not at all
CEN-02 The SVAA carries out its functions incorrectly or not at all
CEN-03 The CDCA carries out its functions incorrectly or not at all
CEN-04 NETSO submits Settlement data to the SAA incorrectly or not at all
CEN-05 The SAA carries out its functions incorrectly or not at all
CEN-06 The ECVAA carries out its functions incorrectly or not at all
CEN-07 The FAA carries out its functions incorrectly or not at all

Recent Changes to the Risk Ledger

Elexon and the PAB previously recorded Settlements Risks separately for the SVA and CVA Markets, with 19 Risks identified in the former and 15 in the latter.

The current Risk Ledger improves on this earlier structure by more closely identifying Settlement Risks with specific business processes. Through doing so, it enables Elexon, the PAB and Market Participants to make use of the Settlement Risks in identifying and addressing the root causes of poor Settlement Performance and/or Settlement inaccuracy.

The following table sets out the correspondences between the two ledgers. Note that some Risks from the old ledger have been spread out over multiple Risks on the new ledger, whilst others have been combined.

The Risk Ledger will be updated each year along with the RER, and as necessary to accommodate changes to the BSC and/or CSDs. This Section of the Guidance Note will be updated to reflect such changes as needed.

Former Risk	Current Risk(s)
SVA 01 SVA Metering Point is registered incorrectly or not at all, such that metered data is not collected or aggregated	REG-01 Metering Point Registration information is created, maintained or transferred incorrectly or not at all
SVA 02 SVA Metering System attributes held in the Supplier Meter Registration Service (SMRS) or by any party in the Supplier Hub are incorrect	REG-01 Metering Point Registration information is created, maintained or transferred incorrectly or not at all
SVA 03 SVA Metering Equipment is installed, programmed or maintained incorrectly including where Commissioning is performed incorrectly or not at all	MET-01 Metering Equipment is installed, programmed or maintained incorrectly including where Commissioning is performed incorrectly or not at all
SVA 04 Changes to SVA Metering Equipment are not notified, such that all members of the Supplier Hub do not use the current Meter Technical Details	MET-03 Meter Technical Details are not maintained or transferred correctly or at all following changes to Metering Equipment
SVA 05 A fault with SVA Metering Equipment is not resolved, such that metered data is recorded incorrectly or cannot be retrieved	MET-04 A fault with Metering Equipment, including communications equipment, is not resolved
SVA 06 On a change of agent, Meter Technical Details are not transferred or processed correctly or at all, such that parties do not use the latest Meter Technical Details	REG-03 Meter Technical Details are transferred incorrectly or at all
SVA 07 SVA Metered data is not retrieved, such that the proportion of estimated data being used in Settlement contributes to performance standards not being met	DAT-01 Metered data is not retrieved physically where remote data is not available
SVA 08 SVA metered data is not processed or transferred correctly, or at all	DAT-02 Energy volumes are not estimated correctly or at all where metered data is not available
	DAT-03 Metered data is validated or submitted incorrectly or not at all
SVA 09 The Data Aggregator does not process metered data correctly or at all, including transfer to SVAA, such that the energy volumes required for Settlement are incorrect or missing	DAT-03 Metered data is validated or submitted incorrectly or not at all
SVA 10 On change of Data Collector, meter read history is incorrect or not transferred such that sufficient history is not available for validating and estimating energy volumes	REG-04 Settlement Data required for the validation and estimation of energy volumes is created, maintained or transferred incorrectly or not at all
SVA 11 Unmetered Supplies volumes are calculated incorrectly or not at all	REG-01 Metering Point Registration information is created, maintained or transferred incorrectly or not at all
	REG-04 Settlement Data required for the validation and estimation of energy volumes is created, maintained or transferred incorrectly or not at all
	REG-05 Agents are not appointed or de-appointed correctly
	DAT-02 Energy volumes are not estimated correctly or at all where metered data is not available
	DAT-03 Metered data is validated or submitted incorrectly or not at all
	DAT-04 Manual adjustments to Metered Data are completed or recorded incorrectly or not at all
SVA 12 SVA Metering System technical details are created incorrectly	MET-02 Meter Technical Details are created incorrectly
SVA 13 Manual adjustments to Metered Data are not completed correctly, or at all	DAT-04 Manual adjustments to Metered Data are completed or recorded incorrectly or not at all
SVA 14 Agents are not appointed or de-appointed correctly, such that SMRS is not complete or up to date, members of the Supplier Hub do not hold the correct MPID of other Hub members or the appropriate agents are not appointed	REG-05 Agents are not appointed or de-appointed correctly
SVA 15 SVA reference data is not created or transferred correctly, or at all	CEN-01 An item within MDD or ISD is created or updated incorrectly or not at all
SVA 16 The energisation status held in SMRS or by any party in the Supplier Hub does not match the physical energisation status of the SVA Metering System	REG-01 Metering Point Registration information is created, maintained or transferred incorrectly or not at all
SVA 17 Exception reports are not sufficiently managed, such that material exceptions are not addressed at all or in a timely manner	REG-01 Metering Point Registration information is created, maintained or transferred incorrectly or not at all
	REG-05 Agents are not appointed or de-appointed correctly
	DAT-03 Metered data is validated or submitted incorrectly or not at all
SVA 18 Revenue protection processes are not managed sufficiently, such that unrecorded energy volumes are excluded from Settlement	DAT-05 Revenue Protection processes are followed incorrectly or not at all
SVA 25 Balancing Services provided by Virtual Lead Parties allow error to enter Settlement, such that the energy volumes required for Settlement are incorrect or missing	REG-02 Volume Allocation Unit Registration information is created, maintained or transferred incorrectly or not at all
CVA 19 A Volume Allocation Unit is registered incorrectly or not at all, such that the CDCA does not collect any or the relevant data	REG-02 Volume Allocation Unit Registration information is created, maintained or transferred incorrectly or not at all
CVA 20 CVA Metering Equipment is installed, programmed or maintained incorrectly including where Commissioning is performed incorrectly or not at all	MET-01 Metering Equipment is installed, programmed or maintained incorrectly including where Commissioning is performed incorrectly or not at all
CVA 21 CVA Metered Data is not retrieved, or processed correctly, or at all, by the CDCA	DAT-01 Metered data is not retrieved physically where remote data is not available
	DAT-03 Metered data is validated or submitted incorrectly or not at all
CVA 22 Changes to CVA Metering Equipment are not notified to CDCA	MET-03 Meter Technical Details are not maintained or transferred correctly or at all following changes to Metering Equipment
CVA 23 A fault with CVA Metering Equipment is not resolved, such that Metered Data is recorded incorrectly or cannot be retrieved	MET-04 A fault with Metering Equipment, including communications equipment, is not resolved
CVA 24 CVA reference data is not created or transferred correctly, or at all	REG-03 Meter Technical Details are transferred incorrectly or at all
	REG-05 Agents are not appointed or de-appointed correctly
	MET-02 Meter Technical Details are created incorrectly
	DAT-03 Metered data is validated or submitted incorrectly or not at all
	CEN-01 An item within MDD or ISD is created or updated incorrectly or not at all
CVA 26 Aggregation Rules in CDCA are incorrect such that CVA Metered Data is not correctly aggregated, and the energy volumes required for Settlement are incorrect or missing	CEN-03 The CDCA carries out its functions incorrectly or not at all
CVA 27 Trading Parties do not or are unable to pay Trading Charges fully or at all, such that it triggers an Event of Default	This would not relate to a failure of a specific Settlement system or process and has been removed from the Ledger. Disorderly Market exits (such as Parties ceasing to trade) will now be recorded as Risk Events.
CVA 28 NETSO does not submit or submits incorrect Settlement data	CEN-04 NETSO submits Settlement data to the SAA incorrectly or not at all
CVA 29 The SAA's calculations and processing are incorrect or use incorrect data	CEN-05 The SAA carries out its functions incorrectly or not at all
CVA 30 The ECVAA does not carry out processes correctly, such that output files are inaccurate	CEN-06 The ECVAA carries out its functions incorrectly or not at all
CVA 31 The FAA does not accurately process Trading Charges or calculate ad-hoc charges correctly, such that Advice Notes are incorrect	CEN-07 The FAA carries out its functions incorrectly or not at all
CVA 32 Manual adjustments to CVA Metered Data are not completed correctly, or at all	DAT-04 Manual adjustments to Metered Data are completed or recorded incorrectly or not at all
CVA 33 An Interconnector Administrator does not submit, or submits inaccurate BM Unit Metered Volume data	DAT-03 Metered data is validated or submitted incorrectly or not at all
CVA 34 The SVAA does not process or transfer the correct data or does not use approved default data.	CEN-02 The SVAA carries out its functions incorrectly or not at all

Do you need more information?

YourOSMis your first point of contact for Performance Assurance queries and is available to support you. If you’re not sure who they are, check theBSC Signatories and Qualified Personspage of our website.

The Elexon website has more information on thePerformance Assurance Framework.

More information about specific BSC Processes and managing the Risks associated with them can be found in Elexon’sDigital BSC, especially theBSC Procedures(BSCPs) andGuidance Notes.

For any other information please raise a ticket through the onlineElexon Supportportal.

Intellectual Property Rights, Copyright and Disclaimer

The copyright and other intellectual property rights in this document are vested in Elexon or appear with the consent of the copyright owner. These materials are made available for you for the purposes of your participation in the electricity industry. If you have an interest in the electricity industry, you may view, download, copy, distribute, modify, transmit, publish, sell or create derivative works (in whatever format) from this document or in other cases use for personal academic or other non-commercial purposes. All copyright and other proprietary notices contained in the document must be retained on any copy you make.

All other rights of the copyright owner not expressly dealt with above are reserved.

No representation, warranty or guarantee is made that the information in this document is accurate or complete. While care is taken in the collection and provision of this information, Elexon Limited shall not be liable for any errors, omissions, misstatements or mistakes in any information or damages resulting from the use of this information or action taken in reliance on it.

CONTENTS

Performance Assurance: Settlement Risk V2.0

What this document covers

What this document does not cover