Recently National Grid published its System Needs and Product Strategy consultation looking at the way the electricity system is changing in Great Britain and how the range of services that it uses to balance supply and demand needs to change to meet those changing needs.

This is the start of a major reform of grid balancing services in consultation with industry and is worth a read both to understand how system needs are changing and to see how National Grid is intending to revamp its balancing services products to better meet those needs.

System needs

The increasing amount of intermittent renewable energy on the system, and decreasing amount of "traditional" synchronous generation, is making it harder to keep the system balanced using the range of products that are currently available. National Grid identifies five key future system needs (in the order that it calls on them in real time):

  • Inertia and Rate of Change of Frequency (RoCoF): system inertia is expected to decrease, which increases the RoCoF and can cause some generators to "trip" and disconnect from the grid
  • Frequency Response: National Grid needs response that acts faster than the products it currently uses and needs flexibility closer to real time
  • Reserve: this can be upward (an increase in generation/decrease in demand) or downward (a decrease in generation/increase in demand) and at the moment there are a number of overlapping products to manage this
  • Reactive Power/Voltage Support: the need has moved from generation to absorption of reactive power, driven by low transmission demands and increased reactive power contribution from distribution networks
  • Black Start: there are opportunities for new providers to enter black start contracts from 2018 and National Grid is looking to open this up to alternative forms of generation.

Product strategy

To meet these needs, National Grid has over time developed a range of 21 products (not including the Capacity Market), each with its own requirements and each procured in a different way (bilateral agreements, auctions, tenders). This has led to some products being oversubscribed and other products not as popular, even though they offer a higher price.

National Grid is proposing a three-stage programme of rationalisation, standardisation and improvement. First it will reduce the number of products (for example, getting rid of Enhanced Frequency Response and Firm Frequency Response and replacing them with a single new product). Then it is looking to standardise products, moving from a number of precisely defined products to a smaller number of products which have a number of parameters. In the longer term National Grid will work with industry to improve and develop the product suite beyond just standardising the existing products.

Next steps

This consultation is open until 18 July and National Grid will report back at the end of September 2017.

We can expect:

  • A new frequency response product (replacing FFR and EFR) to be designed and implemented by March 2018
  • New reserve products that ensure:
    • sufficient flexibility is available close to real time
    • market access for both BM (balancing mechanism) and non-BM providers
    • compatibility with pan-European reserve services by 2018/19
  • A new reactive market will be designed and implemented by the end of 2018/19
  • In the longer term, investigate how black start can be procured using distributed energy resources.

Distributed generation and interconnectors

At a time when embedded benefits are being been cut, this is good news for distributed generation as National Grid has identified that a number of its current balancing services are not available to distributed generators and that this needs rectifying. Reactive products and black start services should soon be redesigned to ensure embedded generators can participate.

National Grid is also taking the changing interconnection arrangements into account, including the new cross-border trading arrangements coming into force next year that will allow one hour ahead trading instead of the current three hours ahead (and the increased uncertainty in generation and demand that this will cause); and the need to continue imposing ramp limitations, to prevent increased interconnection impacting system frequency.

The consultation is on National Grid's Future of Balancing Services website here

Key Contacts

Paul Dight

Paul Dight

Partner, Energy and Utilities
United Kingdom

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Alex Clayton

Alex Clayton

Managing Associate, Infrastructure, Projects and Energy

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Anna Sweeney

Anna Sweeney

Principal Knowledge Lawyer, Projects & Infrastructure

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