Elexon
What is Elexon?
Elexon is one of those energy-industry names that never appears on a bill but shapes what ends up on one. It is the body that runs settlement for the GB electricity market, the behind-the-scenes reconciliation that works out, half hour by half hour, whether each supplier bought the right amount of power for what its customers actually used. You will never phone Elexon or receive an invoice from it, but if your business has a half-hourly meter, Elexon is quietly why your consumption data matters so much. Here is what it does and why it matters to you.
On this page
Elexon is a market administrator, not a supplier, a regulator or the system operator. It sits at the centre of the electricity settlement process, and its role is growing as the market moves every meter onto half-hourly settlement.
What Elexon actually is
Elexon is the company that administers the Balancing and Settlement Code, the rulebook that governs how electricity is settled in Great Britain. In plain terms, it runs the sums that reconcile what every supplier and generator agreed to trade against what was actually generated and consumed. It was set up when the electricity trading arrangements were reformed in the early 2000s and has run settlement ever since.
It is not a supplier, so it never sells you power. It is not the regulator, which is Ofgem. And it is not the system operator, which is NESO. Elexon is the neutral administrator that makes sure the money follows the electricity correctly.
The Balancing and Settlement Code
The Balancing and Settlement Code, usually shortened to the BSC, is the set of rules that everyone trading electricity in GB signs up to. It covers how metered volumes are collected, how they are allocated to suppliers, and how imbalances are priced and charged. Elexon is the body that keeps the BSC running day to day: managing the central systems, calculating the numbers, and enforcing the rules.
You do not sign the BSC as an end customer. Your supplier does. But the accuracy of your metered data feeds straight into it, which is where a business meter comes in.
What settlement means
Settlement is the process of squaring up the market after the event. Every half hour, the electricity system produces a set of numbers: how much each generator produced and how much each supplier’s customers consumed. Suppliers contract for power in advance, but they can never predict demand perfectly. Settlement works out the gap between what each supplier contracted for and what its customers actually used, then charges or pays for that difference.
Elexon runs this reconciliation. It collects the metered data, allocates consumption to the right supplier, and calculates who owes what.
The settlement timeline
Settlement is not a single event, it happens in stages as better meter data arrives. An initial run uses early, often estimated, data. Later reconciliation runs update the figures as actual meter readings come in, and a final run closes the period once the data is firm. This is why accurate, timely metering matters: if your data is missing early on, your consumption is filled with estimates and only corrected later. The move to half-hourly settlement is designed partly to make this whole timeline faster and more accurate.
Imbalance pricing
The difference between contracted and actual volumes is priced at the imbalance price, which Elexon calculates for every half hour. A supplier that used less than it bought effectively sells the surplus back at the imbalance price; one that used more has to buy the shortfall at it. When the system is tight, that price can be very high, which is part of what pushes suppliers to forecast demand carefully and to value accurate meter data.
You do not pay the imbalance price directly. But it feeds into the risk that suppliers price into your unit rate, especially on pass-through and flexible contracts.
A worked example
Imagine a supplier contracts for 100 MWh in a settlement period, but its customers actually use 105 MWh. It is 5 MWh short, so through settlement it must buy that shortfall at the imbalance price. If the imbalance price is £90/MWh:
5 MWh × £90/MWh = £450 the supplier pays for being under-contracted in that period.
Example only. Imbalance prices vary every half hour and can be far higher or lower, so treat this as illustrative.
Multiply that risk across thousands of half hours and you can see why suppliers care so much about forecasting demand, and why clean half-hourly data from your meter helps them price you keenly.
Why Elexon matters to your business
For a small business on a simple meter, Elexon runs entirely in the background. For a larger site on a half-hourly meter, it matters more, because your half-hourly consumption data flows into settlement. Accurate, timely data means your supplier settles correctly and can price you more keenly. Missing or estimated data, by contrast, gets replaced with defaults that are rarely in your favour.
This is one of several reasons a half-hourly site benefits from a good meter operator and clean data, and why bills built on estimated reads are worth chasing down.
Elexon and MHHS
Elexon’s role is expanding through Market-wide Half-Hourly Settlement, or MHHS, the biggest change to settlement since the market opened. Today only larger sites are settled half-hourly. Under MHHS, every meter with a smart or advanced meter will be settled half-hourly, so suppliers price against your actual time-of-use consumption rather than an estimated profile. Elexon is central to delivering it. For the detail on what this means for a business, see our guide to Market-wide Half-Hourly Settlement.
The upshot for you: as MHHS lands, the shape of your consumption starts to matter to your price, not just the total. Businesses with predictable demand may benefit; peakier sites may want to look at when they use power.
Elexon as a data source
Beyond settlement, Elexon publishes a lot of the market data the industry relies on: the generation mix, imbalance prices, demand figures and more. Brokers and analysts use it to understand what the system is doing. You are unlikely to use it directly, but the numbers your broker quotes about system conditions often trace back to Elexon’s data.
Elexon vs Ofgem vs NESO
Three bodies, three jobs, easy to muddle:
| Body | Role |
|---|---|
| Elexon | Administers the Balancing and Settlement Code and runs electricity settlement |
| Ofgem | The regulator: sets the rules and protects consumers |
| NESO | The system operator: balances the grid in real time |
Elexon squares up the market after the event, NESO keeps it balanced in the moment, and Ofgem regulates the whole thing. All three sit behind the business electricity market you actually buy from.
Frequently asked questions
What is Elexon?
Elexon is the company that administers the Balancing and Settlement Code and runs settlement for the GB electricity market. It reconciles what suppliers and generators contracted against what was actually metered.
Is Elexon a regulator?
No. The regulator is Ofgem. Elexon is a neutral market administrator that runs the settlement process. It applies the rules rather than setting policy.
What is the Balancing and Settlement Code?
The Balancing and Settlement Code, or BSC, is the rulebook governing how electricity is settled in Great Britain. It covers metering data, volume allocation and imbalance pricing. Elexon administers it.
What does electricity settlement mean?
Settlement is the process of squaring up the market after the event. Each half hour, it works out the gap between what each supplier contracted for and what its customers actually used, then charges or pays for the difference.
How does the settlement timeline work?
Settlement happens in stages. An initial run uses early, often estimated data; later reconciliation runs update the figures as actual meter readings arrive; a final run closes the period. Accurate, timely metering keeps your figures right from the start.
What is the imbalance price?
It is the price Elexon calculates for every half hour to value the difference between contracted and actual volumes. When the system is tight it can be very high, which is why suppliers forecast demand carefully.
Do I pay Elexon directly?
No. You never receive a bill from Elexon or deal with it directly. Your supplier signs up to the settlement arrangements Elexon runs, and any effect on your costs comes through your supplier.
Why does Elexon matter to a business with a half-hourly meter?
Your half-hourly consumption data feeds into settlement. Accurate, timely data means your supplier settles correctly and can price you more keenly. Missing or estimated data gets replaced with defaults that are rarely in your favour.
What is MHHS and how is Elexon involved?
Market-wide Half-Hourly Settlement moves every smart or advanced meter onto half-hourly settlement, so suppliers price against your actual time-of-use consumption. Elexon is central to delivering it.
Is Elexon the same as NESO?
No. NESO, the National Energy System Operator, balances the grid in real time. Elexon settles the market after the event. They are separate bodies with separate jobs.
Does Elexon set electricity prices?
No. Elexon does not set the price you pay. It calculates settlement and imbalance figures. Your unit rate is set by your supplier, built from wholesale costs, network charges, policy costs and margin.
Where does Elexon get its data?
From metering across the network, collected through the settlement systems it runs. It also publishes market data such as the generation mix and imbalance prices, which the wider industry relies on.
How does Elexon affect my unit rate?
Indirectly. The imbalance risk and settlement accuracy that Elexon governs feed into the risk a supplier prices into your rate, particularly on pass-through and flexible contracts. Clean half-hourly data helps a supplier price you keenly.
Why does estimated data cost more at settlement?
Because when your actual reads are missing, settlement fills the gap with estimates that are rarely in your favour, and corrections come later. Accurate half-hourly data settles your true usage first time, reducing the risk a supplier prices in.
How long has Elexon run settlement?
Since the electricity trading arrangements were reformed in the early 2000s. It has administered the Balancing and Settlement Code ever since, and its role is now expanding through the move to market-wide half-hourly settlement.
Balancing and Settlement Code (elexon.co.uk) · Ofgem (ofgem.gov.uk)