The proposed GC0117 code modification would introduce a standardised approach to Large Power Stations for embedded customers across all licence areas. Its introduction would mean that many customers who do not currently need to apply for a Bilateral Embedded Generation Agreement (BEGA) would need to apply for one, including all 10 MW–99 MW projects in England or Wales. The removal of Bilateral Embedded Licence Exemptible Large Power Station Agreements (BELLAs) would have similar impacts in Scotland.
Because Large Power Stations are required to register as Balancing Mechanism Units (BMUs), the code modification would place a heavy administrative burden on NESO, DNOs and Elexon, as NESO would need to process approximately 650 additional BEGA applications each year. The proposal would mean an end to considering key variations in network voltages across Great Britain. For example, transmission in Scotland operates at 132 kV, and a 50 MW generator there might connect to the transmission network rather than the distribution network.
The Electricity Storage Network supports the goal of increasing visibility of assets in the Balancing Mechanism, however the proposed changes would place significant new financial and compliance burdens on many storage and embedded generation projects at a challenging time, coming alongside Clean Power 2030 and grid connection reforms. Industrial and commercial sites with onsite generation, including ‘behind-the-meter’, would also be impacted.
Within this consultation response, we focus on the additional costs, policy impacts and challenges around the implementation date. We recommend that NESO and Ofgem review the code modification in light of a number of additional impacts and costs that have not been captured in the development process (eg significant upfront and ongoing costs, growing role of DSOs, impact on non-firm technical limit projects, additional resource requirements at NESO and Elexon at a critical time of reform, and undermining CP30 delivery).
We recommend a thorough review of the code modification, which fails to capture key financial, operational and policy impacts (eg CP30 delivery).
A new cost-benefit analysis is needed to factor in additional CAPEX and OPEX costs, system operator capacity, regional differences and the actual benefits of increased BMU registrations.
The current implementation date of 1 June 2027 is too soon given ongoing grid connection reforms and CP30.
We recommend that the code modification considers the potential impact on a project’s queue position for sites that haven’t secured main plant contracts by June 2027.
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