Posted on: 02/08/2016
Two mechanisms, one new and one which kicked off just last year, are helping ensure stability of the national grid. Rob Owens, Vice President of Demand Side Management, explains more about Enhanced Frequency Response and the Capacity Market.
Ensuring there is just the right amount of electricity available to meet the nation’s needs is a complicated business. With much more intermittent generation such as wind and solar power coming on stream, keeping the grid in balance is becoming increasingly challenging.
Among the tools National Grid relies on to help balance supply and demand on the system are two schemes - Enhanced Frequency Response (EFR) and the Capacity Market - which are both underway at the moment.
The first Capacity Market Transitional Arrangements auction for Demand Side Response providers took place last year, securing 803MW capacity for the grid to call on in winter 2016/17. SmartestEnergy won a contract in this auction and have aggregated flexible demand from several of our large customers which will be delivered when required.
DECC have recently announced the details of the next Capacity Market auctions to take place this winter. They are looking to secure:
- 53.8GW in the early capacity auction for delivery in 2017/18
300MW of turn-down Demand Side Response in the Transitional Arrangements auction for delivery in 2017/18
52GW in the capacity auction for delivery in 2020/21
- We are keen to help businesses identify any potential flexibility they may have to put forward in these auctions, so please get in touch if you would like to explore this with us.
Also underway now is the first EFR auction, which is expected to be particularly appealing to operators and owners of battery assets. The auction is looking to secure 200MW of capacity for to be delivered before March 2018.
Many of the battery developers we are speaking to have been waiting for this auction and it is expected to be a key milestone in the development of grid-connected storage. However, it is clear that the auction is oversubscribed - over 60 companies pre-qualified to participate and experts suggest around 20 are likely to receive contracts.
The whole industry, including our Storage Team here at SmartestEnergy, will be watching closely in late August to see what impact this auction has on the bourgeoning battery sector.
We will continue to work closely with developers to help them understand the energy part of their EFR projects, giving them the insight necessary to meet their commitments
Our recent industry survey has identified the key commercial challenges around battery storage, including the limited availability of grid contracts. We are producing a report on our findings and recommendations - pre-register here.