National Grid to revamp balancing services

System operator aims to 'level the playing field' for different technologies

National Grid has floated plans to revamp the balancing services it procures in response to the changing needs of the power grid.   

The system operator has published a consultation document outlining its intentions to, among other things, overhaul the procurement of frequency response services.

“Our aim is to create balancing services markets that meet our changing system needs and in which all technology types can compete on a level playing field,” said National Grid head of commercial for electricity Cathy McClay.

“To achieve this, we will provide market information that plainly sets out our needs and simplify balancing services to create transparent markets.”

The consultation was prompted by concerns among stakeholders that balancing services are “inaccessible”, “complicated” and “unclear” as well as not being future proof.

“Investors need to know our plans so they can make informed decisions of their own,” the document states.

A chief concern for the future operability of the power grid is declining system inertia, as a result of the closure of synchronous generation such as coal, gas and nuclear. As inertia falls, the energy system becomes more susceptible to rapid changes in frequency due to sudden load losses.

To counteract this decline, National Grid last year held a trial tender for enhanced frequency response (EFR). The service was designed to provide a faster response to changes in frequency than the existing alternatives – firm frequency response (FFR) and mandatory frequency response (MFR).

Rather than holding a second tender, the system operator instead plans to combine both EFR and FFR into a single service. National Grid said this new service should be procured much closer to the point of use than its predecessors to ensure it can be more closely aligned to the changing needs of the system.

Although its requirements are expected to remain level for the time being, National Grid also intends to reform its balancing services for reserve as they currently have “overlapping timescales of delivery and differing technical requirements and characteristics”.

“These multiple products inhibit transparency of the total market opportunity,” the consultation notes. National Grid will seek to rationalise and simplify these services and launch a new reserve service in 2018/19.

Furthermore, the system operator said the reactive power market used to control voltage on the power grid does not properly value reactive power capability and is inaccessible to distributed energy. It will therefore design and implement a new reactive power market by the end of 2018/19.

To replace the black start capabilities traditionally provided by conventional thermal generation, National Grid will examine alternative ways of restoring the power grid following blackouts. This could include using islanded generation that is typically separated from the rest of the grid, upgraded thermal generation that is able to provide black start capabilities at lower load factors or even intermittent renewables.  

The firm will publish its current black start procurement strategy later this summer in effort to improve the transparency of the market. New contracts for the provision of black start services will be offered from 2018.

Commenting on the consultation, Renewable Energy Association policy manager Frank Gordon said: “Our members will welcome the move to simplify what is currently a complex hodgepodge of incentives built up over many years.”

He continued: “These technical system products don’t seem revolutionary or sexy but their reform is a business-critical activity if we are to accommodate new flexibility, electric vehicle, and energy storage technologies.”

Author: Tom Grimwood,
Channel: Operations & Assets , Markets & Trading , Policy & Regulation

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