Replacement Reserve (RR)
Replacement Reserve is a harmonised service across participating European TSOs for the provision of both an increase and decrease of active power.
21st June 2019 - We have submitted a derogation request to Ofgem on the implementation of the new Replacement Reserve product. We are currently awaiting a decision from Ofgem.
What is Replacement Reserve?
As part of the Electricity Balancing Guidelines, which aims to establish a pan-European market for Balancing Energy, a new product has been created, RR, which can be used across participating TSOs.
What is Wider Access to the BM?
Alongside RR, changes are being made to the Balancing Mechanism to make it more accessible to non-traditional providers and aggregators. Participants interested in Wider Access are able to pre-qualify using the same links on the right hand side.
Who can participate in RR and WA?
Both markets are open to participants that are parties to the Connection Use and System Code (CUSC), either as a Generator, Supplier or Virtual Lead Party. Further information on the CUSC can be found at: https://www.nationalgrideso.com/codes/connection-and-use-system-code-cusc
Participants will also need to accede to the Balancing and Settlement Code (BSC) for which there are associated costs. Further information can be found at: https://www.elexon.co.uk/bsc-and-codes/balancing-settlement-code/
There are cost associated with acceding to the respective documents. For the CUSC, this is £5,000 plus VAT, while for the BSC this is £500 with details on further charges available at: https://www.elexon.co.uk/knowledgebase/what-are-the-costs-associated-with-being-a-bsc-party/
Virtual Lead Parties
As part of P344 and GC0097, a new market participant type has been created, VLPs, who will be able to register Secondary BMUs for the provision of balancing services to the System Operator. We have previously hosted a webinar outlining what a VLP is, and the slides and a recording of that webinar can be found here.
Companies looking to become a VLP, are required to accede to the CUSC. There is an industry modification that is looking to introduce this, CMP295, and once approved, will allow VLPs to sign up to the CUSC.
As part of EBGL there is a requirement for providers to be prequalified before participating in certain markets. These markets are BM (including Wider Access), TERRE and STOR. Further details on the steps to prequalify, can be found under the How to Participate tab.
Elexon have provided guidance on how to register units, including for VLPs, along with how TERRE will be settled.