What are imbalance charges?
Imbalance charges recover the cost of the gap between the electricity your supplier contracted for in a half hour and the electricity its customers actually used. Elexon calculates one imbalance price for every settlement period under the Balancing and Settlement Code, from the balancing actions the system operator took in that half hour, and settles every party against it. Since 5 November 2015 there has been a single price rather than a separate buy and sell price.
The price is published and can be checked. Your share of it cannot, because apportioning a supplier portfolio imbalance to one customer is a term of the contract rather than an industry formula. Keeping those two facts apart is the whole of checking this line.
- Prices a normal day carries
- 48
- One imbalance price per settlement period. Clock-change days carry forty-six and fifty.
- Volume that sets the price
- 1 MWh
- The Price Average Reference volume: the volume-weighted average of the most expensive 1 MWh of balancing actions left after tagging.
- Until the final settlement run
- 14 months
- The same day is settled again at roughly one, two, five, seven and fourteen months, and a disputed day at about twenty eight.
What imbalance is, and who is in it
Electricity has to be produced in the same instant it is consumed, and the market buys it in advance. Every party to the Balancing and Settlement Code tells the system how much it contracted for in each half hour, and then reality happens. The difference between contracted volume and metered volume, for one party in one half hour, is its energy imbalance: use more than you contracted for and you buy the difference from the system, use less and you sell it back.
The party in imbalance is your supplier, not you. Elexon settles with BSC parties, and a supplier balances a whole portfolio rather than one meter, so in many half hours a customer running high is offset by one running low. That is why the price of imbalance and your share of it are different questions, and why only one has a published answer.
- Full pass-through, imbalance billed at cost, on the allocation method the contract names
- Flexible or basket, imbalance on whatever volume was left unhedged when the market closed
- Day-ahead indexed, the auction price prices the volume, imbalance prices the deviation from it
- Half-hourly metered, settled on actual data, so a real per-period position exists to apportion
- Fully fixed contracts, The supplier carries the risk and prices it into the unit rate.
- The meter itself, Imbalance is settled at party level, never against one meter point.
- Any published per-customer rate, There is none. The price is published, the apportionment is commercial.
One price, and how it is set
Great Britain used to have two cash-out prices in each half hour: a short party paid the System Buy Price, a long party received the System Sell Price, and the two were different numbers. BSC modification P305 replaced that with a single price using the existing main price calculation. Ofgem approved it on 2 April 2015 and it took effect on 5 November 2015. Any explanation still describing a spread between the two is out of date.
P305 was a two-step change. The second step landed on 1 November 2018: the Price Average Reference volume fell from 50 MWh to 1 MWh, the Value of Lost Load doubled to 6,000 pounds per MWh, and the Loss of Load Probability moved from a static to a dynamic function. Elexon recalculated history under the new parameters and found prices would have averaged 2.69 pounds per MWh higher when the system was short and 0.62 pounds lower when it was long. Sharper, not simply bigger.
What sets the number is the balancing stack. Elexon takes every balancing action for the period, flags those taken for system rather than energy reasons, removes small and offsetting actions, nets the buy and sell stacks to leave the Net Imbalance Volume, then prices the most expensive 1 MWh of what remains. That volume is the Price Average Reference volume, and it is why the price behaves like a marginal cost rather than an average.
| Parameter | Current value | What it does |
|---|---|---|
| PAR, Price Average Reference volume | 1 MWh | The volume of the most expensive remaining actions the price is averaged over. Cut from 50 MWh on 1 November 2018. |
| DMAT, De Minimis Acceptance Threshold | 0.1 MWh | Balancing actions smaller than this are removed before pricing, so a rounding-sized acceptance cannot set a price. |
| CADL, Continuous Acceptance Duration Limit | 10 minutes | A bid or offer acceptance shorter than this is flagged as a system action rather than an energy action. |
| VoLL, Value of Lost Load | 6,000 pounds per MWh | The assessed value consumers place on security of supply. It sets the ceiling on the Reserve Scarcity Price. |
| RSVP, Reserve Scarcity Price | VoLL multiplied by LoLP | Reserve actions price at the greater of their utilisation price and this, so scarcity enters the price directly. |
There is no floor and no ceiling on the price itself. It can be negative, because a balancing action can be a payment to somebody for consuming more, and it can rise a long way when the system is tight, because scarcity is priced in deliberately.
How it reaches a customer bill
You are not a party to the Balancing and Settlement Code, so Elexon never invoices you. It settles with your supplier, which recovers the cost from whichever of its customers agreed to carry it. On a pass-through contract that recovery is a line on the invoice. On a fully fixed contract it is a risk premium inside the unit rate, and you will never see it named. It is one of the few lines on the business electricity bill with no rate published ahead of the period it covers.
The arithmetic on the supplier side of that boundary is not in dispute. It is the published price for a settlement period multiplied by a volume, summed across every settlement period in the billing window.
The volume attributed to you for that half hour, which the contract decides: the whole of your consumption, or only the part left unhedged.
In pounds per MWh, for that settlement date and settlement period, as published by Elexon. One figure, applying to short and long alike.
One pound per MWh is exactly 0.1 pence per kWh, so the sum divides by ten to give pence. Division by a power of ten loses nothing.
What is in dispute is the first term. Two allocation methods are common and they produce very different bills. Under full-consumption pass-through, your whole half-hourly volume is priced at the imbalance price for that half hour. Under an imbalance-volume method, only the difference between what the supplier purchased on your behalf and what you consumed is priced, which can be negative and therefore a credit. Neither is in industry code. It is in your contract, and if it is not, that is the finding.
A day of imbalance at published prices
Settlement date 26 August 2026 is an unremarkable working Wednesday. Elexon published forty-eight prices for it, the lowest 88.55 pounds per MWh in period 8 and the highest 214.00 pounds per MWh in period 16. The consumption below is an assumption, clearly labelled as one. The prices are not.
- Consumption assumed, flat across the settlement day
- 100 kWh in each of 48 periods
- Total volume
- 4,800 kWh
- Lowest published price, period 8
- £88.55 per MWh
- Highest published price, period 16
- £214.00 per MWh
- Sum of kWh multiplied by price, across 48 periods
- 715,748.6084
- Divided by ten, in pence
- 71,574.86p
- Imbalance for the day
- £715.75
The mean of those forty-eight prices is 149.11 pounds per MWh, and on a flat profile the day comes out at exactly that. On a real profile it would not. Now one hour of the same day, when a site is most likely to still be running hard.
- Consumption assumed, 18:00 to 19:00 on 26 August 2026
- 200 kWh
- Period 37, 100 kWh at £202.78 per MWh
- 2,027.80p
- Period 38, 100 kWh at £202.00 per MWh
- 2,020.00p
- Imbalance for the hour
- £40.48
What a day-ahead index exposes you to
A day-ahead indexed contract prices your energy at the clearing price of the day-ahead auction for the hour it was delivered in, plus an agreed margin. In Great Britain that auction is N2EX, run by Nord Pool, clearing in pounds per MWh for each hour of the following day. Gate closure is 09:50 GMT and results are published by 10:00 GMT, so every hour of tomorrow has a published price today.
The appeal is real: an index price is transparent, the same number for everyone, and free of the risk premium a fixed price carries. What it does not remove is the difference between the plan and the outcome. The auction settles a forecast; imbalance settles reality. A day-ahead-indexed contract usually leaves you exposed to both, and the second exposure is the one nobody quotes at the point of sale.
- Day-ahead, 24 hourly prices matching the settlement day
- £3,450.29 per MWh, summed
- Mean day-ahead price
- £143.76 per MWh
- The same 4,800 kWh at those hourly prices
- £690.06
- The same 4,800 kWh at the 48 imbalance prices
- £715.75
- Difference, one meter, one day
- £25.69
That is 3.7% on a quiet late-summer Wednesday, on a perfectly flat profile. It forecasts nothing. It shows that two published prices for the same electricity, struck a day apart, are not the same price, and that a contract naming one is silent about the other. For the evening hour above the gap is wider: the auction cleared the hour from 18:00 at 179.86 pounds per MWh, so 200 kWh cost 35.97 pounds at index against 40.48 pounds at the imbalance prices.
The settlement runs, and why a bill comes back
Settlement is not a single event. Elexon runs the same settlement day repeatedly over more than a year, because the data improves: half-hourly metered sites are largely accurate from the start, estimated volumes elsewhere are progressively replaced with actual readings, and the whole picture is recalculated each time.
- 1 weekInterim Information, II→
Run about five working days after the settlement day. For information only. No party is charged or credited from it.
- 1 monthInitial Settlement, SF→
The first run parties are charged or credited on. The payment date is 29 calendar days after the settlement day.
- 2 and 5 monthsR1 and R2→
The first two reconciliation runs. Volumes move as estimates are replaced by readings, and the price can be restated too.
- 7 monthsR3→
The third reconciliation run, and the last routine one before the final.
- 14 monthsFinal Reconciliation, RF
The target is 97% of non-half-hourly energy on actual data. After RF only an upheld dispute reopens the day.
A disputed day can be rerun at roughly twenty eight months, as a Dispute Final run, but only where the Trading Disputes Committee agrees. So an imbalance charge for a period you closed months ago arrives because the industry had not finished settling it, and a reconciliation being legitimate does not make its amount right.
RCRC, and why it is usually a credit
RCRC, the Residual Cashflow Reallocation Cashflow, is the small line that puzzles people most, largely because it is usually negative. It exists because imbalance settlement does not balance to zero on its own.
Section T of the Balancing and Settlement Code defines a Total System Residual Cashflow for each settlement period: the information imbalance charge, plus the system operator balancing mechanism cashflow, plus the non-delivery charge, less the total balancing mechanism cashflow, plus the total energy imbalance cashflow. Most of those terms cancel, and the Simple Guide to Section T states that the residual can be expressed simply as the total system energy imbalance cashflow.
That residual is reallocated to every energy account in proportion to its credited energy volume. The proportion is the Residual Cashflow Reallocation Proportion, the amount landing on one account is the Residual Cashflow Reallocation Cashflow, and the accounts of the transmission system operator take a zero proportion. Because the residual is normally a surplus, most parties receive money back, which is why RCRC reaches a pass-through invoice as a credit.
Where it appears, and how to check it
There is no standard line name for either charge, and the labels overlap with others in the same part of the invoice.
| What the line says | What it means | Can it be checked on its own |
|---|---|---|
| Imbalance, or Cash-out | The charge itself, usually as a total for the period rather than a rate, because no single rate spans it. | The price can be. The share cannot |
| System Buy Price, or SBP | The same charge, named after the price rather than the concept. Since 2015 it equals the sell price. | The price can be |
| RCRC, or Residual Cashflow Reallocation | The reallocated residual, usually a small credit and usually shown as a negative amount. | No public rate exists to check it against |
| Day-ahead, N2EX or index | The commodity priced at the auction clearing price for the delivery hour, plus a margin. | Yes, against the published auction result |
| Elexon, BSC or settlement charges | Settlement administration recovered by the supplier. A different charge, frequently confused with this one. | Only against the contract rate |
| Third party costs, or Non-commodity charges | Imbalance bundled with balancing, network and policy charges into one number. | No. An error in one component hides under an error in another |
Five questions settle the line, in this order, because a failure early on invalidates everything after it.
- Does the contract pass imbalance through at all? On a fully fixed contract it should not appear.
- Which settlement periods is it for? Not which month. The charge is per settlement period, so a line without the dates and half hours behind it cannot be reproduced.
- Is the price the published one for each of them? This is the firm check, and the only one a public source can settle.
- Which volume was priced? Your whole consumption, or only the unhedged part. The two answers can differ by more than the charge itself.
- Is this an original charge or a reconciliation? Price it against the data for the period reconciled, and expect the volume rather than the price to be what moved.
What is changing
Shorter imbalance settlement periods are on the table
The Review of Electricity Market Arrangements concluded with a decision to keep a single national wholesale price and reform it. The Reformed National Pricing delivery plan, published by the Department for Energy Security and Net Zero on 21 April 2026, names a balancing and settlement package: shorter imbalance settlement periods, a lower mandatory balancing mechanism participation threshold, physical notifications required to match traded positions, unit bidding, and gate closure aligned with the market trading deadline.
Shorter settlement periods would be the largest change to this charge since 2015: more prices per day, a closer match between when energy was used and when it was priced, and a rebuild of every system that assumes forty-eight half hours. The plan states that Ofgem and the Secretary of State are expected to decide from the second half of 2026 onwards. A proposal is not a rule.
Half-hourly settlement is spreading to smaller sites
Market-wide Half Hourly Settlement, the industry programme moving every meter point onto settlement from actual half-hourly data, changes which volumes carry a real per-period position at all. A site settled against an estimated profile has no genuine half-hourly imbalance to apportion; a site settled on actual data does.
Deep dives and edge cases
These are the cases that come up often enough to answer and not often enough to interrupt the main path.
A negative imbalance price is not an errorWhy the system sometimes pays people to use more electricity.＋
The imbalance price is built from the prices of balancing actions, and a bid price can be negative: a generator offering to pay to reduce output, because stopping would cost it more. At the margin, the system pays somebody to consume.
When that action is the marginal one, the price for that settlement period is negative, and a supplier passing imbalance through correctly shows a credit for those half hours. A rebuild that treats the price as an absolute value, or filters negative rows out as bad data, will overstate the charge and be confidently wrong.
When there are no balancing actions to priceThe default rules, and the market price that fills the gap.＋
If flagging and tagging leave nothing in the Net Imbalance Volume there is no marginal action to average, and the price is set to the Market Price instead. That is calculated under Section T4.3A from Market Index Data supplied by market index data providers, and reflects the short-term wholesale price rather than the cost of balancing.
Two related defaults exist. Where the volume of balancing actions is smaller than the Price Average Reference volume, the price is the volume-weighted average of whatever there is. Where there is no unflagged volume inside the replacement price reference volume, the replacement price comes from the Market Price too. A calm half hour can carry a price sourced quite differently from its neighbours.
Imbalance is not BSUoS, and neither is Elexon and BSC chargesThree balancing-adjacent lines that are three different charges.＋
BSUoS recovers what the National Energy System Operator spends balancing the system, at a single national tariff fixed in advance, applied to every unit you consume. Imbalance settles the difference between contracted and metered volume at a price that changes every half hour and is only known after the event. A line called balancing charges is almost always the first and almost never the second.
A third line, usually labelled Elexon or BSC charges, is the cost of settlement administration itself, with no public per-customer schedule, so it is checked against the contract rate. Three charges, one part of the invoice, and confusing them is how a genuine overcharge gets defended as normal.
Energy intensive manufacturers get nothing back on this oneWhat the EII certificate and the compensation scheme do not cover.＋
An Energy Intensive Industries certificate exempts a certified proportion of four policy levies, and the Network Charging Compensation Scheme that travels with it refunds a share of eligible BSUoS, DUoS and TNUoS charges. Imbalance is in neither list, and neither is RCRC.
Imbalance is not a policy levy and not a network charge, so it sits outside both. For a certified site it is one of the few large non-commodity exposures that no relief touches, which makes checking it worth more rather than less.
Questions
What are imbalance charges on my electricity bill?＋
Imbalance charges recover the cost of the gap between the electricity your supplier contracted for in a half hour and the electricity its customers actually used. Elexon calculates one imbalance price for every settlement period under the Balancing and Settlement Code, from the balancing actions the system operator took in that half hour, and settles every BSC party against it. A supplier can only pass that on if the contract says so, which is why imbalance appears on pass-through and flexible contracts and never on a fully fixed one.
What is the system price?＋
The system price, also called the imbalance price or the cash-out price, is the price in pounds per MWh applied to a party imbalance in a single settlement period. Since 5 November 2015 the System Buy Price and the System Sell Price have been the same number, so there is one system price per half hour rather than two. It is calculated from the volume-weighted average of the most expensive 1 MWh of balancing actions left after flagging and tagging, a volume called the Price Average Reference.
Why is there one imbalance price and not two?＋
BSC modification P305 replaced the dual price with a single price using the existing main price calculation. Ofgem approved it on 2 April 2015 and it took effect on 5 November 2015 as part of the November 2015 Release. Under the dual price a party that was short and a party that was long faced different prices and could not offset. Under the single price, opposing imbalances on two energy accounts price at the same number, which removed the incentive to balance accounts against each other rather than balance the system.
How high can the imbalance price go?＋
There is no cap in the calculation itself, but there is a ceiling on one input. Short Term Operating Reserve actions are priced at the greater of their utilisation price and the Reserve Scarcity Price, which is the Value of Lost Load multiplied by the Loss of Load Probability for that settlement period. The Value of Lost Load has been 6,000 pounds per MWh since 1 November 2018. The price can also be negative, because a balancing action can be a payment to increase demand.
What is RCRC on my electricity bill?＋
RCRC stands for Residual Cashflow Reallocation Cashflow. Imbalance settlement leaves a residual surplus or deficit in each settlement period, called the Total System Residual Cashflow, and the Balancing and Settlement Code reallocates it to every energy account in proportion to its credited energy volume. The amount allocated to one account is its RCRC. Elexon determines it under Section T4.10.3, and BSC parties see it on their settlement statements rather than in a public price feed.
Why is RCRC a credit rather than a charge?＋
Because the residual it redistributes is usually a surplus. The Total System Residual Cashflow simplifies to the Total System Energy Imbalance Cashflow, which is what every party in imbalance paid in net of what every party in imbalance was paid. That figure is normally positive, so the reallocation gives money back rather than taking it. It is small per unit and it applies to every settlement period, so on a pass-through invoice it usually reads as a small negative line. It can go the other way.
Why am I being billed imbalance for a period I already paid for?＋
Because settlement runs more than once for the same day. Elexon runs an Interim Information run about a week after the settlement day, at which nobody is charged, then the Initial Settlement run about a month later, which is the first time parties are charged or credited. Four reconciliation runs follow, at roughly two months, five months, seven months and fourteen months, and a disputed day can be rerun at about twenty eight months. Volumes change between runs as estimates are replaced by actual readings, so a later charge or credit for an old period is normal.
What is a day-ahead price on my bill?＋
It is the clearing price of the day-ahead auction for the hour your energy was delivered in, used as the reference price in an index-linked supply contract. In Great Britain the N2EX day-ahead auction run by Nord Pool clears in pounds per MWh for each hour of the following day. Gate closure is 09:50 GMT and results are published by 10:00 GMT, so the price for tomorrow is known today. A day-ahead-indexed contract prices your volume at that published number plus an agreed margin.
Is the imbalance price the same as the day-ahead price?＋
No, and the gap between them is the point. The day-ahead price is what the market agreed a delivery hour was worth the day before. The imbalance price is what it cost to fix the difference between that plan and reality, in each half hour, after the event. On settlement date 26 August 2026 the N2EX day-ahead price averaged 143.76 pounds per MWh across the settlement day, while the mean of the 48 published imbalance prices was 149.11 pounds per MWh.
Which contracts pass imbalance through?＋
Pass-through and flexible contracts. On a fully fixed contract the supplier carries the imbalance risk and prices it into the unit rate, so imbalance never appears as a line. On a pass-through contract it appears as its own line or inside a combined non-commodity line, and the contract states how the supplier apportions its portfolio imbalance to you. That method is a commercial term, not an industry formula, which is why two suppliers can bill different amounts for the same half hour.
Can I check an imbalance charge myself?＋
You can check the price, and you should. Elexon publishes a system price for every settlement period, so you can confirm that the price your supplier applied to a given date and half hour is the published one. What you cannot check from a public source is your share, because the apportionment of a supplier portfolio imbalance to one customer is contractual. Ask for the settlement periods, the price used for each, and the allocation method named in your contract.
How often does the imbalance price change?＋
Every half hour. A normal settlement day has forty-eight settlement periods and therefore forty-eight prices, and the two clock-change days each year have forty-six and fifty. The range within one day is wide: on 26 August 2026 the published prices ran from 88.55 pounds per MWh in period 8 to 214.00 pounds per MWh in period 16. An average price for a day tells you very little about what a peaky demand shape actually cost.
The price is published. Your share of it is a contract term.
Simplest Energy prices an imbalance line from the published Elexon price for every settlement period it covers, compares the result against the invoice, and says plainly which half of the answer a public source can settle.
- Imbalance priced from the published Elexon price for each settlement period billed, joined to your half-hourly consumption
- More than 185,000 published prices held from 1 January 2016, refreshed daily, with three years of history reloaded weekly so a restated price is picked up
- Prices stored and priced at full published precision, with the only rounding at the final whole penny
- Pricing the per-customer allocation of imbalance costs, which is contract-specific and today is held for confirmation
- A public source for RCRC, which is not published and today comes from settlement statements
Built from the primary document.
Imbalance Pricing Guidance, the nine stages of the system price calculation
Imbalance Pricing, and the current values of PAR, DMAT, CADL, VoLL and RSVP
Section T, Settlement and Trading Charges: the Simple Guide, including the determination of residual cashflow allocations
The Electricity Trading Arrangements: A Beginner's Guide
P305: Electricity Balancing Significant Code Review Developments
Changes to the system price calculation on 1 November 2018
System prices by settlement period, settlement date 26 August 2026
N2EX day-ahead auction prices for Great Britain
Reformed National Pricing delivery plan
- Last reviewed
- 2 September 2026
- Technical basis
- Elexon Imbalance Pricing Guidance v16.0 (effective 14 July 2025), the BSC Section T Simple Guide v45.0 (effective 27 November 2025), the Elexon imbalance pricing parameter page, the Elexon Insights system price data for settlement date 26 August 2026 and the N2EX day-ahead auction results for the matching delivery hours, all checked 2 September 2026
- Review trigger
- An Ofgem or Secretary of State decision on the Reformed National Pricing balancing and settlement package, in particular shorter imbalance settlement periods; a change to the Price Average Reference volume, the De Minimis Acceptance Threshold or the Value of Lost Load; or a BSC modification that alters the settlement run timetable.
This guide explains how the imbalance price is set and how it reaches a bill. It is not tax, legal or procurement advice. The prices quoted are the indicative settlement prices Elexon published for settlement date 26 August 2026, read on 2 September 2026, and they can be restated at a later settlement run. Check the linked source before relying on a figure.