Active Network Management (ANM) is a system - or, rather, a series of systems - that curtails the export of generation plants when limits are exceeded on constrained parts of the distribution network. Distribution network operators (DNOs) run ANM systems, and each one is different. However, each ANM system serves the same purpose: preventing power flows from reaching their limits and affecting the networks. For generator operators, there is an upside. ANM allows generators to connect to the DNO more quickly than they would otherwise be able to, and at a lower cost.
How does ANM work?
ANM systems generally work in three stages, each assigned to a specific piece of hardware:
- A piece of monitoring equipment sends network information - e.g. power flows, available capacity, etc. - to:
- a central system, which in turn sends instructions to generators to change their output.
- Control equipment at the generation site then enacts these instructions to reduce or increase output, depending on need.
At times of potential capacity overload, ANM reduces generator output. The problem? This comes with no financial compensation for the generators. This output which generators are not allowed to export is known as “curtailment”.
What is curtailment?
ANM systems rarely enact curtailment, so this shouldn’t present an issue. However, as curtailment could theoretically be enacted at any time, generators with ANM connections are kind of at its mercy.
To work out how much of a generator’s output must be curtailed, DNOs carry out Curtailment Assessments. Curtailment Assessments are then used by National Grid Electricity System Operator (NG ESO) as part of the process to decide whether a given generator would be a suitable participant in its balancing services, including Dynamic Containment (DC).
A Curtailment Assessment is a feasibility study that simulates ANM behaviour across specific time-frames. This then provides an estimate of the occurrence and severity of ANM actions of generators, including an estimation of MWh curtailment across the given time period. The Curtailment Assessment is then based on the worst-case scenario. Therefore, despite the likelihood of curtailment enactment being relatively slim, NG ESO still has to assume that the worst-case scenario may take place at any time.
Can ANM co-exist with frequency response services?
Understandably, NG ESO is reluctant to rely on generators whose output can be curtailed at a given moment. This means that ANM connection presents a potential barrier to entry for balancing services. Unfortunately, this means a barrier to the most reliable and profitable revenue streams available. In theory, an asset can enter balancing services markets with an ANM connection. The volume of potential curtailment, however, must be relatively negligible. (As a rule of thumb, this means a maximum of ~5% of capability being curtailed, but there is a ‘piece of string’ element to this.)
Currently, NG ESO’s decisions on eligibility are made on a case-by-case basis. An asset must provide the DNO with sufficient visibility and accurate information on the volume of potential ANM curtailment. The ESO then needs to know if ANM curtailment directly affects any potential providers of frequency response services. Specifically, it needs to know what the consequences and conditions of their curtailment are. The information provided by the DNO forms the basis of the ESO’s decision.
As more battery energy storage assets are built, they will need to connect to the distribution network. In order to speed up this process and/or save money, there may be the temptation for owners and operators to agree to ANM connection. It is therefore important to know all of the facts before signing up, especially when this might later harm an asset’s ability to participate in profitable markets further down the line.