Skip rates

Balancing engineers operate the system using the Balancing Mechanism (BM) and other tools and processes, such as ancillary services. Within the Bid Offer Acceptance (BOA) process, they consider bids and offers from assets that are connected to the system, known as Balancing Mechanism units (BMUs). As explained in NESO’s Balancing Principles Statement, when making decisions on which BMUs to dispatch, engineers need to manage the system:

• Securely, reliably, safely and efficiently, adjusting energy to maintain frequency and ensure stability
• As a market in which participants compete for opportunities to assist with adjusting supply or demand

Balancing engineers manage the system as economically as possible to control balancing costs, while enabling market participants to realise the value of their assets. In 2024/25, Balancing Services Use of System (BSUoS) charges contributed to around 3.4% of electricity bills for an average domestic consumer.

In December 2023, NESO’s Balancing Programme introduced the Open Balancing Platform (OBP), a major component in our development roadmap. OBP is a modern flexible architecture which we are continuing to develop, to which we are incrementally transferring capability from legacy systems. The OBP optimises the issuing of dispatch instructions to BMUs. It is currently used only for instructing battery storage units and small BMUs. The OBP can send hundreds of instructions to BMUs using one central command. The combined impact of the above developments has resulted in a significant increase in instructions for batteries and small BMUs. Comparing the daily average for the quarter of October-December 2023 with the quarter of January-March 2025, dispatch volumes have increased for batteries by 425% and for small BMUs by 31%. The number of corresponding instructions increased by 1,347% for batteries and 72% for small BMUs. We have also expanded existing systems to accommodate 5% growth in data submissions. 

This facilitates the growing number of flexible units on the system. These increases are driving greater participation in markets, reducing skip rates and driving down balancing costs.

Skips occur when non-economic dispatch decisions are made in the ENCC Control Room. This means that a dispatch instruction has been issued, via the Bid Offer Acceptance (BOA) process, to a unit in the Balancing Mechanism (BMU) which has a less attractive £/MWh price than an alternative action that could have been taken. The BMU with a more economically attractive price is considered to have been skipped. Other actions which optimise the lowest operational cost over the course of a day may also result in skips during that day. This is often due to the skip rate methodology assessing each five-minute period independently.

Whether an action has resulted in an avoidable skip is complex. The reasons for exclusions fall into various categories including:

• Optimisation of security of supply, including for national security reasons
• Geographical location of the BMU in relation to physical limitations on the national transmission system, such as thermal, voltage and inertia-related constraints
• Dynamic properties of a BMU that limit its capability, such as ramp rates and longevity of power generation
• Operational optimisation, including cost, over a longer period such as the course of a day, rather than just focusing on a short time window or settlement period

One of NESO’s goals is to increase consumer value. One of the ways we aim to deliver this is by achieving a substantial reduction in avoidable skips as far as is practicable. Where appropriate, this will result from achieving relative parity in the utilisation of all types of BMU technology. We aim to achieve this by March 2026, the end of our Business Plan 3 (BP3) period under the RIIO-2 incentives framework.

NESO recognises that skip rates are too high, and that there has been a lack of transparency around dispatch decisions. We have created a specific programme and assigned resources to drive our focus and deliver on our commitments. This is enabling us to:

• Bring the skip rate down to a minimum by reducing avoidable skips as soon as possible; we will do this through planned system and process improvements, consulting and partnering with industry in development and testing
• Provide transparency on dispatch decisions, with updates on progress; we intend to ensure a productive relationship with the industry, and will respect the requirements of the regulator, Ofgem

We are addressing skip rates in a range of ways to help identify and prioritise areas for improvement:

• Further progressing the methodology first developed by LCP Delta for defining, measuring and monitoring skip rates; we are reviewing this against operational policies and practices to identify areas where actions may be taken out of merit order, including factors like units providing Mandatory Frequency Response (MFR), or pumped storage operating in ‘spin gen’ or ‘spin pump’ modes, and to ensure that any deviations are justifiable and transparent
• Dedicating additional balancing resources in the Control Room to support the increasing number of BMUs and resulting BOAs
• Introduction of a dispatch transparency tool, which is giving balancing engineers better visibility of when skips occur – we are refining and evolving this tool according to feedback from the Control Room
• Providing training and awareness for balancing engineers to help them avoid skips when issuing dispatch instructions to BMUs
• Root Cause Analysis (RCA) – focusing on identification of causal factors that result in skips

We have already made several updates and minor changes to the methodology first developed by LCP Delta. These account for physical constraints on the transmission system. We are also planning to implement updates in late 2025, once the necessary data is available from the OBP. These will take account of:

• Mandatory Frequency Response (MFR)
• Pumped storage units that are in ‘spin gen’ or ‘spin pump’ mode
• State of charge for storage assets, depending on the conclusion of the Grid Code modification GC0166 review

Yes, an independent Dispatch Strategic Review of Control Room operations is being undertaken. A summary of its findings will be shared with the industry.

We are ensuring transparency of and accountability for our skip rate performance throughout BP3 by:

In-person engagement

• Updates at the weekly Operational Transparency Forum (OTF)
• Hosting skip rate-focused events, including in-person forums, investor days and webinars, with recordings made available, plus online drop-in sessions
• ‘Round table’ sessions for CEOs of organisations operating flexible assets
• Direct interaction with individual stakeholders, including visits to their locations and invitations for them to visit the Control Room

Publishing information

• Explanations and updates in the Skip Rates section of the NESO website
• Accurate and timely datasets on a data portal on the NESO website; the datasets are structured according to a methodology that builds on a five-stage process first developed by LCP Delta
• Updates in NESO newsletters

We very much welcome:

• Attendance and participation at our in-person and online events
• Submission of questions, comments, concerns and suggestions by email to our dedicated mailbox, [email protected]

We have defined the nature of skips for tracking and analysing skip rates – the frequency of how often they occur. We have developed a dispatch transparency tool to assist with this. We continually engage with our balancing engineers, including focused investigation of skip rates experienced on specific days, weeks and months, and by individual BMUs. We have also procured the support of a consultancy in our root cause analysis to develop a set of casual factor hypotheses using advanced, data-driven methods. All these activities will assist with:

• Developing our understanding of why skips occur
• Assessing the efficiency of the decision-making process
• Highlighting areas where system and process improvements can be made to optimise performance

In 2024, we worked with LCP Delta to develop a five-stage methodology for measuring and monitoring skip rates. We also defined two types of skip rates, looking at the volume of energy that is skipped within a time period:

• All-Balancing Mechanism (All-BM) Skip Rate – a measure of skips as a proportion of all system and energy actions
• Post-System Action (PSA) Skip Rate – a measure of skips as a proportion of all energy actions

These are expressed as percentages. References to BMUs that have been skipped, and their associated energy volumes, have the same meaning for both All-BM and PSA definitions. Only the context and denominator are different.

The methodology has five stages, through which bid and offer volumes are excluded for various reasons. To improve the accuracy of a dataset that identifies skips, we need to exclude volume that is not accessible to the ENCC Control Room within balancing timescales:

Stages

1. Starting point including volume from all BMUs
2. Feasible volumes from wind offers
3. Volumes that could not be accessed within BM timescales, or were unavailable due to constraints
4. Volumes that were taken for system reasons
5. Feasible volume that would require a received bid or offer to be unwound
6. Volumes from long-notice units that could not be accessed by the balancing team in the Control Room

From June 2025, we have been reporting skip rates by technology type at the weekly Operational Transparency Forum (OTF). It is possible to calculate skip rate by technology type using the ‘In-Merit PSA’ dataset, published on our data portal. We will also be publishing an additional dataset which provides skip rate by technology type.

• CCGT units with long-notice periods are included up to and within Stage 4 but excluded at Stage 5. The skip rate for all stages is published in the summary dataset on the data portal, in addition to the datasets that specify which units have been skipped. Long-notice means => 31 mins that a unit needs:
• Minimum Non-Zero Time (MNZT) – to run before it can return to zero
• Minimum Zero Time (MZT) – to remain at zero before it can return to generating or absorbing energy
• Notice to Deviate from Zero (NDZ) – to begin generating or absorbing energy when starting from zero

For more information, please refer to the Skip Rate Methodology & Implementation Guide v2, May 2025.

The proposed methodology would limit the available volume of any unit that, due to ramp rates, cannot deliver its potential volume within 30 mins. From our impact analysis, we have identified a relatively small number of units that would be impacted by this change, which would be very complex to implement. In discussion with industry representatives at the Skip Rate Forum on 1 May 2025, a consensus was reached to not include ramp rates.

Accounting for thermal constraints on the transmission system is done in two ways:

• Constraint calculation – we review feasible volumes that are behind thermal constraint boundaries and exclude any volume that would make an active constraint worse; we also review accepted volumes behind thermal constraint boundaries and exclude any actions that were deemed to be taken to solve the constraint; these are identified as ‘behind constraints’ in our exclusions dataset.
• System-tagged actions – excluded at stage 3 and identified by the Control Room in our exclusions dataset

Later in 2025, we are planning to:

• Review the suitability of our constraint calculation used at Stage 2
• Look at the impact of skips behind constraints related to system actions (we currently only look at skips for energy-related reasons) with the aim of establishing a potential methodology to calculate and identify whether non-economic actions are being taken to manage constraints

We are currently designing the implementation of an MFR exclusion in the skip rate methodology. This will likely be an additional stage which removes units being held or positioned for MFR. Any unit with an MFR tag in a five-minute period will have its accepted and feasible volume excluded. Further detail will be provided at future stakeholder events

Balancing Services Adjustment Data (BSAD) records actions taken outside the BM, including interconnector trades. The LCP Delta methodology included BSAD actions at Stage 0 and excluded them at Stage 1. Actions taken outside the BM will be considered as part of our wider dispatch review caried out later in 2025. We take these actions for system security reasons, due to the level of uncertainty around future requirements.

We are publishing all the datasets daily on the NESO Data Portal. The ‘In-Merit’ datasets for All-Balancing Mechanism (All-BM) and Post-System Action (PSA) skip rates are organised into monthly files. These allow us to monitor skip rates and monitor changes over time. They show:

• Skip rates for each 30-minute settlement period for each of the stages of exclusion 
  (0 to 5)
• A list of all BMUs that were in merit for each five-minute period
• Reasons why BMUs were excluded, indicating the stage of the methodology at which each exclusion took place and determining which exclusions count as skips

Unfortunately not. Some of the data used in the calculations is not available because it was not stored long-term before mid-December.

It is not possible to show skip rates using the same methodology from before December 2024 because the necessary historic data is not available. However, the longer that we monitor skip rates, the broader our view of the impact of changes in the Control Room will become.

We are investigating publishing a dashboard to allow the datasets to be displayed more helpfully and more easily interpreted.

Yes, different technology types will be identifiable.

No. We have been exploring the possibility of making constraints-related data available. However, due to the combination of the sensitivity of the data and the need to comply with Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), we are currently unable to do so. We are continuing to explore avenues to see if we can find a way forward.

We are pleased to see that the datasets we are publishing are being utilised by other parties to conduct their own analysis. We welcome their findings and their views on how we can make the datasets more accessible. 

It is possible to calculate skip rate by technology type from December 2024 onwards using the ‘In-Merit PSA’ dataset, published on our data portal. We will also be publishing an additional dataset which provides skip rate by technology type.

The dashboard is available on the Skip Rates page of this website. It is indeed based on Post-System Action (PSA) data at Stage 5. This is because it represents the most accurate view of actions which are available to the Control Room in real time.

The other stages are provided in the raw data to give transparency of the methodology, rather than because there is value in tracking how these skip rates change over time. If other stages are of interest, we can add another view which summarises the exclusions at each stage.

Where possible, the Control Room takes the most cost-effective action to resolve a constraint.

We secure for an ‘N-1’ scenario, where we assume that a boundary operates following one double-circuit fault. Therefore, Control Room must ensure that, for each constraint boundary, there is enough effective generation to take action on, and also remain within the Security & Quality of Supply Standard (SQSS) limits for post-fault actions.

With regard to pre-fault actions, as the network operates in a steady state, there are more transmission assets available pre-fault. This intrinsically reduces the effectiveness of any generator or any circuit. This is why the need to take action on a specific combination of generation stations is typically less than under a post-fault condition. Once the Control Room is comfortable with real-time demand security, they take action on generation pre-fault in the most cost-effective way. This may be a balance of both pre-fault condition and post-fault action requirements.

The Control Room aims to resolve all system issues as efficiently as possible, determined by both the effectiveness and the cost of an action. All appropriate options are considered for resolving voltage issues.

Generators within one boundary can help to resolve voltage issues within another boundary. We normally arm an intertrip (I/T) for transient stability. If there is no I/T, the unstable generator would normally need to be restricted (nuclear should not be restricted for this). This means that a wider search is not really an option.

In relation to a Sub-Synchronous Oscillation (SSO), generators are sometimes restricted, based on the effectiveness of the action for resolving the SSO.

We aim to reduce skip rates as far and as fast as possible. However, we still need to refine our methodology and capture, develop and interpret a greater volume and range of data to support progress in root-cause analysis. This will give us better insights and improve the basis of our collaboration with the industry. From this, we will be better able to determine how to devise appropriate targets that are reliable, realistic, achievable and enjoy a broad consensus.

GC0166 will enable provision of additional data on the State of Charge (SoC) of units such as batteries. This will improve certainty and assist with decision making for limited-duration assets.

Yes. We are continuing to refine and improve the OBP with planned upgrades, alongside other changes. We expect the OBP to integrate further services and replace existing systems by 2027.