National Grid has confirmed plans to trial weekly firm frequency response (FFR) auctions as part of its ongoing overhaul of balancing and ancillary services.
The system operator said the move to close to real-time procurement will create new opportunities for wind and solar generators that cannot forecast their availability with sufficient certainty to participate in the existing monthly tenders.
The trial will last for 24 months. Auctions will be held every Friday morning and the results will be published in the early afternoon. National Grid chose this time because frequency response requirements are typically higher over weekends.
The auctions will be used to procure four different services: high frequency dynamic response, low frequency dynamic response, high frequency static response, and low frequency static response.
Contracts will be auctioned off in four-hourly blocks covering the following week, with the first beginning at 11pm on the same day as the auction. Volume requirements will be published in advance.
Service providers will be able to nominate sequential blocks within a particular day as “all-or-nothing” offers and will also specify bids as curtailable, meaning they would not be rejected if they straddled the system operator’s maximum requirement.
In order to minimise the clearing price, bids will be accepted in price order without regard to their size.
In an open letter explaining the plans, National Grid acting head of business development Colm Murphy, wrote: “To minimise barriers to entry of new technology types and maximise the level of competition, the auction will need to procure frequency response products both separately and together…
“This level of functional design will require the creation of a clearing engine using a new complex algorithm, rather than being able to use an existing algorithm and trading platform. We consider this more complex functionality to be essential to delivering an auction that is beneficial to all parties.”
National Grid announced its intention to revamp balancing and ancillary services to meet the changing needs of the power grid and level the playing field between different technologies in June 2017.
The following December the system operator published a product roadmap for frequency response and reserve services. It included proposals to trial weekly FFR auctions, starting a year later in December 2018, with a view to eventually moving to daily auctions.
“Ultimately our aspiration is to move procurement of all balancing products closer to real time, but this will not be possible without a firm foundation and understanding of potential benefits and pitfalls,” said Colm. “The current estimated date for delivery of the trial has therefore changed to June 2019.”
He said National Grid will work closely with service providers to find ways of speeding up progress and may introduce a “scaled down version of the platform prior to a full rollout”.