The Balancing and Settlement Code (BSC) Modification P442 represents one of the most significant technical shifts in the UK electricity market in recent years.
Approved by Ofgem and implemented in 2025, the modification introduces the Exempt Supply Notification Agent (ESNA) role and establishes a formalised method for identifying, reporting and settling exempt versus licensed electricity volumes.
Historically, exempt supply was rarely taken advantage of due to unclear processes, inconsistent reporting and risk around levy treatment.
P442 changes that by establishing a consistent, auditable pathway for exempt supply arrangements to function at scale and in line with Electricity Market Reform (EMR) requirements.
P442 introduces three key innovations:
A new market role: the ESNA
The Exempt Supply Notification Agent calculates exempt supply volumes using validated half-hourly data and submits them to central settlement systems. This ensures exempt volumes are correctly excluded from CfD and Capacity Market levies.
Generators, suppliers and exempt participants now follow a unified process for time-matching, validation and settlement. This dramatically reduces commercial and regulatory uncertainty.
P442 ensures that exempt volumes are treated as intended within the EMR framework—levied only on licensed supply.
đź”— EMRS: https://www.emrsettlement.co.uk
These changes make the exempt supply lower‑risk, more transparent and more widely accessible.
By establishing a clear process for handling exempt volumes, P442 strengthens confidence across the supply chain; generators, suppliers and energy users each benefit in different ways.
P442 allows renewable and distributed generators to offer time‑specific electricity that consumers can value more accurately. Instead of being forced into generic green products, generators can monetise their real‑time output and capture better value when their generation aligns with customer demand.
Suppliers gain a robust, consistent framework for integrating time-matched supply and levy treatment into:
This creates opportunities to develop new commercial products based on actual renewable availability.
Businesses can now procure clean energy in a verifiable, timestamped way. Instead of relying on annual certificates, consumption can be matched to specific periods of renewable production—opening the door to:
One of the most transformative aspects of P442 is how it supports the growth of community and distributed energy. By formalising how time‑matched electricity is recorded and settled,
P442:
If implemented consistently across the industry, P442 could shift time‑matched clean energy from a niche option to a mainstream market feature. It helps create the stable regulatory foundation needed for a more open, accountable and locally driven energy system—one in which clean power can be bought and sold with confidence.
ConsensusPower’s platform is built to operate within the P442 framework.
We support organisations by providing:
Whether you’re a generator, a supplier or a large corporate, we're here to help make the complexities of exempt supply simple, transparent and commercially beneficial.