What is the Imbalance Settlement Process?
The imbalance settlement process settles discrepancies between the amount of electricity that a company has contracted to generate or consume and that which they actually generated or consumed. Due to the nature of electricity, generators may generate more or less energy than they have sold; customers of suppliers may consume more or less energy than their supplier has purchased on their behalf and traders may buy more or less energy than they have sold. In such circumstances, these BSC Parties are regarded as being ‘in imbalance’ and the ‘energy imbalances’ (i.e., the amounts of energy generated or consumed and not covered by contracts) have, in effect, been bought or sold from or to the National Grid system. Two ‘cash-out’ prices, also known as ‘energy imbalance price’ are calculated for each half hour of the day and are used to settle these differences. These are called the System Buy Price (SBP) and the System Sell Price (SSP).
