PSRG26/01
Profiling Accuracy: Profile Classes 3 and 4
Impacts of Moving to Elective HH Settlement
Meeting Name
Profiling and Settlement Review Group
Meeting Date
3 July 2013
Purpose of paper
For Decision
Summary
At the PSRG on 1 May the PSRG agreed a modelling scenario whereby a number of large
customers in Profile Class 3 and 4 customers move to elective HH Settlement. This paper
presents the findings of the modelling, the cost impacts, the potential impacts to Group
Correction and the impact on the profile of customers remaining in those Profile Classes.
The PSRG are invited to consider the findings, any action, and consider if any further
analysis should be undertaken.
1.
Introduction
1.1
At its last meeting the PSRG (meeting 25, 1 May) agreed a scenario whereby 716 GWh of annual energy on
Profile Classes 3 and 4 are moved to ‘elective’ HH Settlement in the _E Midlands GSP Group. This paper
presents the results of this analysis for PSRG consideration. The analysis presented is based on annual
averages with the modelling calculations performed at a half-hourly level.
2.
Out-turn Profile Shape estimates
2.1
The approach to creating the shape and volume to be moved were discussed and agreed at the last PSRG
(PSRG25/03). The out-turn Profile Shapes and average volumes for Large Customers are shown in Figures 1
and 2:
Figure 1. Profile Class 3 Profile Shape for Large Consumers
Profiling Accuracy: Profile Classes 3 and 4
Impacts of Moving to Elective HH Settlement
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Figure 2. Profile Class 4 Profile Shape for Large Consumers
3.
Analysis and Results
3.1
Using the aggregated data from Figures 1 and 2 the impact on NHH Group take can be estimated. Figure 3
shows the effect of moving these customers to NHH elective on the NHH GSP Group Take in _E Midland GSP
Group:
Figure 3. Change in NHH Group Take
Profiling Accuracy: Profile Classes 3 and 4
Impacts of Moving to Elective HH Settlement
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3.2
If the Profiles for Profile Classes 3 and 4 were not adjusted the average impact on the Profile Class Estimates
would be as seen in Figure 4.
1200
1000
800
MWh
600
Profile Estimate Before
Profile Estimate After
400
200
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Settlement Period
Figure 4. Change in Profiled Estimate
3.3
Note the volume moved to elective and the profiled difference will be the same volume. Figure 5 shows the
difference between the volume moved to elective HH Settlement and the profiled difference:
80
70
60
50
MWh 40
PC3_4 now HH
Profile Difference
30
20
10
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Settlement Period
Figure 5. Profile Difference verses Volume Moved to elective
3.4
Using data from the above graphs we can estimate the average impact on Group Correction Factors. It can
be seen in Figure 6 the GCFs could move ±1%:
Profiling Accuracy: Profile Classes 3 and 4
Impacts of Moving to Elective HH Settlement
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Average Impact on GSP GCFs
1.1
1.05
1
GCF 0.95
Avg GCF Before
AVG GCF After
0.9
0.85
0.8
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Settlement Period
Figure. 6 Impact on Average GSP GCFs
4.
What are the potential financial impacts on Suppliers?
4.1
It is possible to estimate the absolute potential cost to Suppliers caused by changes in GCFs impacting
Supplier imbalance positions, if they could not theoretically account for such changes in their forecasting.
Using the day ahead prices and System Buy and System Sell price streams the cost of impacts before and
after can be estimated:
4.2
•
Profile over-estimates then GCF is less than 1 and corrects Supplier volumes downwards potentially
leaving them in a long position – then volume difference priced at N2EX- SSP; and
•
Profile under-estimates and GCF is greater than 1 and corrects Supplier volumes upwards potentially
leaving them in a short position – then volume difference priced at SBP-N2EX.
The above calculation on average creates a cost to Supplier of £7 per MWh, when short, over what they
could have bought the energy for day ahead, and a £4 per MWh saving they could have realised if they had
not bought the energy in the first place, when long. The results of the calculation show that the potential
cost to Suppliers if no action is taken to adjust the Profiles could be around £3.5M per annum:
Absolute Cost Before (£)
£4.78m
Absolute Cost After (£)
£4.53m
Difference (£)
Across all 14 GSP Groups (£)
Profiling Accuracy: Profile Classes 3 and 4
Impacts of Moving to Elective HH Settlement
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© ELEXON 2013
£252k
£3.52m
PSRG26/01
5.
What are the impacts on the average profile?
5.1
If the profile were to be adjusted the difference for Profile Class 3 could look something like Figure 7:
Profile Class 3 - Change in Profile Shape
0.04
0.035
0.03
0.025
Before
0.02
After
0.015
0.01
0.005
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Figure 7. Change in Profile 3 post large customers moving elective.
5.2
The impacts are modest as it appears that although larger customers on Profile Class 3 have greater energy
volumes their profile is not significantly different than smaller Profile Class 3 customers. Likewise with Profile
Class 4 differences are modest as can be seen in Figure 8:
0.035
0.03
0.025
0.02
Before
After
0.015
0.01
0.005
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Figure 8. Change in Profile 4 post large customers moving elective.
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Impacts of Moving to Elective HH Settlement
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6.
Conclusions
6.1
Large Customers in Profile Classes 3 and 4 have the potential to impact Supplier imbalance volumes but
such impacts are likely to be modest. This is because large customers do not have significantly different
profile shapes than small to medium size customers in the same Profile Class. The profile data is also likely
to be self-correcting as such customers would also be removed from the profiling samples mitigating the
risks yet further.
7.
7.1
Recommendations
We invite you to:
a)
CONSIDER the analysis undertaken and results of the analysis;
b)
DISCUSS the conclusions and implications of the findings; and
c)
DIRECT ELEXON as to the next steps or other analysis to be undertaken.
For more information, please contact:
Kevin Spencer, Market Analyst
[email protected]
020 7380 4115
Profiling Accuracy: Profile Classes 3 and 4
Impacts of Moving to Elective HH Settlement
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© ELEXON 2013