In 2016, National Grid launched one of the most ambitious tenders in its history - the 200 MW auction for Enhanced Frequency Response (EFR). This resulted in circa £100m investment into new assets and kickstarted GB's energy storage industry. This article explains what you need to know about EFR and how it impacts the energy storage market today.
Why launch a new frequency response service?
Historically, National Grid used ‘legacy’ services like Firm Frequency Response (FFR) to keep grid frequency at 50Hz. They also have other levers to pull, i.e. in the Balancing Mechanism, but we won’t go into that here. For many years, FFR was suitable for the job, particularly in the ‘old world’ of centralised power stations and heavy turbine rotors driving generators. FFR requires providers to respond within 2 - 10 seconds, which was more than enough time because spinning rotors in generators are heavy and have plenty of inertia. But, in the 2010s, wind and solar took off, and the grid changed forever. By 2015, National Grid could foresee a serious problem - this new intermittent generation (i.e. wind and solar) could cause grid instability much quicker than in the past. FFR alone would be too slow to respond, so they needed to ‘enhance’ it. Enter EFR.
What is Enhanced Frequency Response (EFR)?
The service
Enhanced Frequency Response (EFR) is very similar to Firm Frequency Response (FFR), but, well, it’s enhanced. (for the record, it’s also ‘firm’, but that’s a different conversation altogether). As an EFR provider, your job is the same as in FFR - you must maintain grid frequency around 50 Hz, charging up your battery when frequency is > 50HZ and discharging (like a generator) when frequency< 50Hz. The big difference with EFR is the speed. Assets must respond much quicker than anything seen before on the grid - full response within half a second, which is at least 4x faster than FFR. Other key differences included a new frequency dead-band and response power gradients. See below.
The run-up to the auction
EFR created a lot of excitement. In the run-up to the auction in Summer 2016, utilities, asset owners, developers, banks, consultants worked securing land, planning permission, connections and financing. As the auction neared, forecasters couldn’t agree on where prices would land, with ranges from single digits up to £35/MW/h and everything in-between. Dynamic FFR prices were £>20/MW/h, and the prevailing sentiment was that EFR prices would be higher than FFR. After all, EFR is a much more advanced, faster service with higher energy throughput requirements (i.e. higher cost of providing the service.
Auction day - 26th August 2016
On 26th August 2016, National Grid (System Operator) ran a pay-as-bid auction to procure 201MW of EFR. Providers could bid for 4-year contracts up to 50MW in size, with the option to provide the service all day (24/7) or to opt-out for periods (to cover the triad periods in Winter). Prices were much lower than (widely) anticipated at the time, at between £7/MW/h - £11.97/MW/h. You can find the auction results below.
What next?
EFR has been ‘discontinued’- National Grid has confirmed that there will be no further EFR auctions. But, the spirit of EFR lives on in National Grid ESO’s new frequency response services. Dynamic Containment (launched October 2020) follows in EFR’s footsteps with super-fast response times. You can find more information about Dynamic Containment on the Modo Platform.