Skip rates
What is a skip?
A skip occurs when a non-economic dispatch decision is made. If the NESO Control Room sends an instruction via BOA (Bid Offer Acceptance) at a higher price than an alternative action that could have been taken, then NESO will have created a skip and the alternative action is bypassed.
Some skips are unavoidable and are due to asset dynamics and limitations on the transmission system. Other operational actions which optimise the lowest operational cost per day may also introduce skips.
Those skips that are avoidable, including those that can be reduced through NESO improvements (system improvements, process improvements or market design), should be minimal.
The “Skip rate” refers to the frequency at which certain actions or assets are bypassed or "skipped" during operational decisions. Skip rates help measure the efficiency and decision-making processes in operations, highlighting areas where improvements can be made to optimise performance and transparency.
As the rate of skips can be calculated based on all actions in the BM, or subsets of available actions, the definition of any skip rate being [calculated / quoted] is important. For the purposes of this analysis, we are using the following two commonly recognised definitions: ‘All BM Skip Rate’ and ‘Post System Actions Skip Rate’.
While there are varying definitions of skip rates across the industry, we are proposing two distinct categories of skips to be used moving forward. These categories will be tracked and measured to ensure we are accountable for our performance. The two categories are:
- "All Balancing Mechanism Skip Rate" (BM skip) – A measure of avoidable skips, taking into consideration all balancing mechanism actions we could have taken over the relevant period.
- "Post System Action Skip Rate" – A more targeted measure of avoidable skips not in context of all actions taken at the time. The occurrence of these skips is far less the BM Skips.
NESO are developing a tool to monitor these skip rates that will be publicly accessible. This tool will provide transparency in skip rate data, and will help to identify and prioritise areas for improvement.
Defining, measuring and addressing skip rates
An explanation of what skip rates are, the challenges smaller assets are having within the balancing market and our commitment to rectify the situation.
LCP Delta skip rate report - Phase 2
A full report on LCP Delta’s methodology for calculating skip rates and the results from their analysis.
| Name | Published |
|---|---|
| Defining, measuring, and addressing skip rates | 2 Dec 2024 |
| LCP Delta skip rate report - Phase 2 | 1 Dec 2024 |
Enhancing Energy Storage in the Balancing Mechanism
On 16 October, we welcomed over 75 stakeholders from across the energy industry to our ‘Enhancing Energy Storage in the Balancing Mechanism’ event.
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