The impact of social distancing to limit the spread of Covid-19 has had a marked impact on the UK’s demand for electricity.
The closure or restriction of industrial and business activity has reduced usual consumption patterns by up to 20% or more. For example, on 15 April, the UK recorded our lowest-ever demand requirement of 15.2GW (on 15 April 2019, it was 22.2GW).
But as well as hardship, this situation also brings opportunities.
Because without the expected level of demand to absorb generation during times of high wind or solar PV output, National Grid is having to innovate to find new ways to manage the current system conditions – and in particular, system frequency.
With renewable generation expected to continue breaking records over the summer, periods where generation exceeds demand are likely to become more commonplace, and the excesses more extreme.
Turn off – or turn up
As a result, National Grid ESO (NGESO) has implemented new measures to manage these challenges – either through generators turning off or consumers turning up demand.
Generators (1MW or above) or large consumers not currently active in the Balancing Market can now earn revenue from participating in NGESO’s new Optional Downward Flexibility Management (ODFM) scheme.
It’s also worth noting that to mitigate the risk that ODFM doesn’t deliver the required response, NGESO has been granted permission by Ofgem to trigger emergency disconnection of embedded generation via Distribution System Operators as an action of last resort. For more on this, see below.
How ODFM works
NGESO has developed this commercial product with the following key requirements:
- The service term is Friday 8 May to 31 August (with option to possibly extend to 30 September)
- The minimum contract size is 1MW (can be aggregated with assets or demand turn-up within the same GSP)
- The volume requirement will vary, but up to 3,000MW of net demand reduction will be required each time ODFM is triggered
- The primary delivery window is 23:00 – 07:00 Saturday through to Monday (although NGESO has an interest in service outside these core hours too)
NGESO currently estimates this service will be enacted on 35% of the days between May and August (i.e. between two to three days a week).
- The minimum event length is three hours (likely event length three to six hours)
- NGESO will pay for each compliant event using the utilisation strike price provided
For example, over the last May Bank Holiday weekend, the ODFM requirement lasted for the majority of Saturday as well as Sunday morning, and from 9am to 6pm on the Monday. This enabled the successful participation of a large volume of solar PV assets at a lucrative utilisation price. The maximum call length was 20 hours from 11pm on Friday 22 May to 7pm on Saturday 23 May.
Managing the process on your behalf
At npower Business Solutions, our in-house Demand Side Response team is able to manage this entire process on behalf of generators and consumers wishing to take part (and you don’t need to be an existing customer either).
Our service covers contracting to pricing, declarations to despatch, and data collection to payment validation on your behalf.
To find out more, please contact your Client Lead (existing customers) or email our team at firstname.lastname@example.org.
Option to disconnect embedded generation
As we’ve already mentioned, NGESO has been granted an urgent modification (GC0143) to allow it to disconnect embedded generators if there is an over-supply of generation which could cause imbalance and frequency spikes on the network.
But only once all Balancing Mechanism and commercial options have been exhausted.
The main basis for the modification is to address concerns around system security over the coming months. Without it, NGESO argues that consumers may be at risk of disruption to power services.
This modification was approved by Ofgem in May and will remain in place until the end of October 2020.
With no remuneration planned for any emergency interruptions, generators who can participate in ODFM are advised to do so. This will alleviate the risk of generation being curtailed automatically and realise a commercial return instead.
What’s more, given the requirement to exhaust all commercial options before implementing emergency shut-down of embedded generation, NGESO will likely be required to pay a premium for ODFM services. For example, over the final May Bank Holiday weekend, a total of £6.87-million was paid out for the provision of the ODFM service.
So it’s highly likely generators will not only recoup any delivery costs – but also gain some commercial benefit for helping to support national supply security during a potentially crucial juncture for NGESO.
If you are an existing nBS customer and haven’t already discussed this with your Client Lead, please do get in touch. Non-nBS customers can also participate – and you can discuss this with our Demand Side Response team. Contact them via email@example.com (inbox regularly monitored) or call 07762 057502.