Elexon's BSC Modification P510 advances through Assessment Procedure to replace mutualised VTP compensation with direct bidirectional mechanism in GB Wholesale Market

BSC Modification P510, raised by Flexitricity on 5 March 2026, is progressing through the Assessment Procedure. Five Workgroup meetings have been completed (May-September 2026), the BSC Panel approved a 6-month extension to the Assessment Procedure (9 July 2026) and agreed the Cost Benefit Analysis approach (8 October 2026), while Ofgem rejected an urgency request (31 March 2026). The Assessment Report is now due to be presented to the Panel on 11 February 2027.

P510 would replace the Supplier-funded mutualised compensation arrangements introduced under P415 with a direct, bidirectional compensation mechanism for Virtual Trading Party (VTP) actions in the GB Wholesale Market, mirroring the direct compensation model already implemented in the Balancing Mechanism via P444. This aims to remove competitive distortions between Supplier-VTPs and independent VTPs, eliminate potential Supplier 'double benefit', strengthen incentives to complete both sides of flexibility transactions, and better support Demand Turn Up and Consumer-Led Flexibility participation aligned with Clean Power 2030 objectives.

This is a wholesale-market compensation redesign targeting a specific competitive distortion identified since P415's November 2024 implementation: mutualised, Supplier-funded compensation for VTP actions reduces revenue certainty for independent aggregators and creates gaming/double-benefit risk for Suppliers acting as VTPs. The proposal's progression is notable for its procedural rigor—Ofgem's rejection of urgency treatment pushed the modification into a full Assessment Procedure with an independent Cost-Benefit Analysis comparing P510 against P509 and the status-quo P415/P511 arrangements. This CBA-driven approach, with findings expected to inform Workgroup and Panel recommendations to Ofgem, suggests a measured regulatory review rather than fast-tracked implementation, with the Assessment Report not due until February 2027 and implementation timing still undetermined. The read-across to the already-implemented BM direct compensation model (P444) provides a precedent that may streamline design discussions, but the Wholesale Market context (distinct commercial route to market) introduces different settlement and gaming considerations that the Workgroup is still resolving through parallel consideration of multiple compensation design options.

Balancing and Settlement Code (BSC) Modification Procedure, Great Britain

Present Assessment Report to Panel · 11 Feb 2027

Primary sources