NESO's BSC Modification P502 moves through Assessment Procedure to create Supplier/Aggregator compensation mechanism for ABSVD-driven imbalance adjustments

NESO raised BSC Modification P502 on 5 November 2025 proposing a compensation mechanism to and from Suppliers when their Imbalance position is adjusted due to Applicable Balancing Services Volume Data (ABSVD) being applied, triggered when customers in their BM Units deliver ancillary services via an Independent Aggregator. The Panel approved progression to Assessment Procedure on 13 November 2025, and the modification is now being examined by a dedicated Workgroup (three meetings held: 30 January, 26 March and 21 May 2026), with a formal Assessment Procedure Consultation scheduled for 7-27 September 2026.

P502 addresses a settlement gap where Suppliers' imbalance positions can be adjusted due to Independent Aggregator-delivered balancing services without corresponding financial compensation, creating potential inequity between Suppliers and Independent Aggregators competing for the same flexible demand. Resolving this is a prerequisite for scaling third-party aggregation of demand-side flexibility in GB without distorting Supplier imbalance exposure.

This modification sits at the intersection of settlement design and third-party access rules, addressing a structural friction created by GB's growing Independent Aggregator model: when an aggregator delivers balancing services using a Supplier's metered customers, the resulting ABSVD adjustment shifts the Supplier's imbalance position without a corresponding compensation flow. Absent a fix, Suppliers bear settlement risk from actions they neither initiate nor benefit from, which could discourage Suppliers from allowing customers to participate via Independent Aggregators or lead to commercial disputes and pass-through costs to consumers. The design choice—a bidirectional compensation mechanism 'to and from' Suppliers—suggests the Workgroup is trying to preserve settlement neutrality rather than simply shielding Suppliers, which is a more balanced but also more complex methodology to specify and implement. The multi-year timeline (raised November 2025, Final Modification Report not due until January 2027) reflects the technical complexity of designing a compensation formula that must interact with existing ABSVD data flows and BM Unit-level settlement calculations. This is a narrow but consequential piece of market plumbing: if poorly calibrated, the compensation mechanism could either under-compensate Suppliers (perpetuating the access barrier) or over-compensate them (creating a disincentive for aggregator-mediated flexibility), directly affecting the growth trajectory of GB's Independent Aggregator market for demand-side response and ancillary services.

GB Balancing and Settlement Code (BSC), Modification P502

Assessment Procedure Consultation closes · 27 Sept 2026

Primary sources