A 168MW virtual power plant operated by smart energy firm Limejump has become the first balancing mechanism unit (BMU) to be aggregated across multiple grid supply points.
The company said the development will finally allow small-scale embedded generators, storage operators and demand-side response providers to access the lucrative market, which until now has been the preserve of larger power stations.
“Limejump’s entry into the balancing mechanism is another step in our efforts to disrupt the conventional operations of the UK energy market,” said Limejump chief executive Erik Nygard.
“This move means that a farmer with a solar installation or a supermarket with excess energy from its cooling units will be on the same footing as a giant power station.
“Just as importantly, our move increases competition, enabling a cleaner, more sustainable energy future that benefits both the environment and the end consumer.”
Limejump said it is aiming to increase the size of its virtual power plant to 600MW within the next few months.
Renewable developer Anesco has announced its 10MW Breach Farm battery storage facility in Derbyshire, as part of the new BMU, has become the first ever to supply electricity to the balancing mechanism.
Anesco executive chairman Steve Shine, said: “It’s a major step forward for the industry, with the balancing mechanism market offering frequent instances of profitable spreads for batteries to take advantage of. In addition, it removes much of the risk that suppliers face from uncertain system prices.”
He added: “While our storage units have previously taken part in frequency response and the wholesale market, they are now able to take advantage of these additional revenue streams and pricing opportunities.”
Anseco’s 10MW Clayhill solar farm, which features 6MW of battery storage, is also part of the virtual power plant operated by Limejump.
Background
Aggregators were already allowed to enter units into the balancing mechanism if they were the registered supplier for all the sites they were aggregating. Limejump was granted a supply licence in 2015.
However, the Grid Code also stipulated that BMU data submitted to the system operator at National Grid must be aggregated at the grid supply point (GSP) level.
In a recently published roadmap setting its plans to widen access to the balancing mechanism, National Grid said in practice this meant the “supplier route” was previously only used in “locationally specific cases”. All involved single sites below the GSP level.
Limejump’s virtual power plant is the first to be aggregated across multiple GSPs.
To enable this to happen, Ofgem has granted the company a derogation from the aforementioned Grid Code requirements. It will instead be allowed to aggregate BMU data at the GSP group level. A GSP group covers all of the GSPs within a distribution network licence area, of which there are 14 across Great Britain.
The derogation is specific to Limejump. Ofgem said it provides “no precedent for any future derogation requests and every such request will be assessed on its own merits and particular circumstances.”
It is also time limited, applying until either a code modification called GC0097 is implemented, if approved, or Ofgem issues further direction, if not.
GC0097 aims to reform the Grid Code to enable market participants and the system operator at National Grid to take part in a new Europe-wide balancing platform called TERRE (Trans-European Replacement Reserve Exchange). Allowing BMU data to be aggregated at the GSP group level is one of the changes it would introduce.
Ofgem is currently considering whether to approve the modification. It recently postponed the decision which was previously scheduled for the end of the July.
The regulator is also evaluating a similar modification to the Balancing and Settlement Code (BSC) called P344. Among the changes it would introduce in preparation for TERRE would be to create a new type of BSC participant called a “virtual lead party”.
A virtual lead party would be able to create an aggregated BMU without having to take responsibility for balancing the sites that make up the unit by becoming their registered supplier.
Back in April, Flexitricity announced plans to launch a new service called Flexitricity+ with the aim of “cracking open” the balancing mechanism to DSR.