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Settlements company Elexon promises to be a ‘critical friend’ to innovators as it opens Sandbox to trial new proposals

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Elexon has launched a new support service so that innovators can trial products and services which could transform the electricity sector.

The company handles settlements for the power industry and manages the associated rulebook, the Balancing and Settlement Code (BSC). Its ‘Sandbox’ is a way to test proof of concept for innovative products or business models in the live electricity settlement environment and it is being offered alongside Ofgem’s relaunched sandbox.

Applicants can apply for a derogation (a temporary relaxation of BSC rules) so that their concept can be tested.

Elexon chief executive Mark Bygraves, said: “A number of potential sandbox users have already come forward, including new and existing energy companies as well as community energy schemes and developers of flexibility platforms. We look forward to working with them, and others.

“Providing a safe space for trialling concepts is a must if we are to meet the net-zero challenge. The sandbox is great way for Elexon to share its expertise with others. It adds to the work we are doing to support the smarter system. This includes opening up the Balancing Mechanism to independent aggregators and preparing the industry for the potential roll-out of market-wide half hourly settlement.”

Any innovators wanting to apply to use the BSC Sandbox should make an application to Ofgem’s Innovation Link team. The Link is the single point of access for innovators to all Sandbox tools.

Applicants for the BSC Sandbox must then apply to Ofgem for a derogation and use of the sandbox setting out:

  • The BSC rules that would need to be changed so that their concept could be trialled.
  • The benefits that their product would bring to the electricity sector and consumers.
  • How long they would need for their trial (the maximum length of a trial is two years).

Elexon says it will be a ‘critical friend’ as innovators develop their proposals and prepare the application. The BSC Panel will review all applications for derogations and make recommendations to Ofgem for a final decision.

Applicants do not need to be a BSC Party (an organisation that is signed up to the BSC rules) to apply for the sandbox. However they would need to agree to accede to the BSC, before their trial starts.

Once a trial is completed, if it is successful the applicants would need to raise a Modification to permanently change BSC rules so that the concept transitions to ‘business as usual’.

ElectraLink has established a similar service for the Distribution Connection and Use of System Agreement (DCUSA). The DCUSA Sandbox will allow innovators to test new ideas and electricity market innovations in a real-world environment without some of the usual rules applying. This will allow innovators to test new products, solutions and business models against code criteria prior to their submission to the Ofgem sandbox, and will accelerate innovations for assessments through Ofgem’s sandbox.