The system is changing, and our frequency response services need to change with it. Frequency will become more volatile as more renewables join the grid. Any sudden weather changes may affect the supply of renewable, low-carbon generation. As such, National Grid Electricity System Operator (NGESO) is moving to reform its current frequency response services to better meet the needs of our rapidly changing system. As part of these reforms, the ESO has proposed the following:
- Changes to its current Dynamic Containment service.
- The introduction of its new Dynamic Regulation and Dynamic Moderation services.
Dynamic Containment - the coming changes
Since its launch in October 2020, Dynamic Containment (DC) has been a success for battery owners and aggregators. A price of £17/MW/hr makes it the most profitable, reliable revenue stream available. It will take some time for the undersubscribed service to reach full capacity (there are currently ~700MW procured of 1,400MW). If the current rate of battery energy storage systems (BESS) build-out continues, this price will eventually have to fall.
In August 2021, DC will be contracted for the delivery of six 4-hour EFA blocks. These contracts will still be procured day-ahead. As each of these windows will vary in demand for electricity, the price should vary too. In theory, this should allow for greater participation across the market, as a wider variety of assets feel confident bidding for EFA blocks that suit their respective capabilities. The procurement method for these contracts is also changing, from pay-as-bid auctions to pay-as-clear instead, meaning that all successful bidders will receive the same price within their given EFA block.
We are also due to see the implementation of high-frequency DC (DC-HF) in October 2021. The demand for DC-HF is lower than that of low-frequency DC (DC-LF). It will also only mitigate the largest demand losses on the system. Participants can bid for both DC-LF and DC-HF in the same EFA block. They will still be able to stack with the Balancing Mechanism (BM), allowing assets to tender bids across all three, albeit with the familiar caveat that any BM activity should not compromise an asset’s ability to deliver DC.
What is Dynamic Regulation?
Dynamic Regulation (DR) is a pre-fault mechanism designed to slowly correct deviations in frequency around 50Hz. This means that assets won’t need to respond as quickly but must be able to support continuous operation. The response profiles of DR necessitate higher levels of energy delivery compared to DC, which will pose issues for energy-limited assets, such as storage. Allied with the 10-second response time, this means that the service will be more suitable for assets that have traditionally delivered legacy frequency response services.
What is Dynamic Moderation?
Dynamic Moderation (DM) is designed to support big imbalances within the operational range. Like DC, this is a fast service. However, unlike DC (which is a post-fault service designed to correct frequency imbalances after they’ve taken place), DM will move to arrest frequency before it moves outside of the operational range. As such, it is also a pre-fault mechanism, like DR. When frequency moves towards the edge of the operational range, providers will move rapidly to manage this. With a 1-second response time and a need for a 30-minute continuous operation, DM is very much suited to batteries.
What else you need to know
- Dynamic Regulation and Dynamic Moderation are due to be introduced as early as January 2022.
- Unlike with DC, however, NGESO will allow time for testing and onboarding from November to give assets a greater period for adjustment and understanding.
- DR and DM will allow both BM and non-BM providers to participate. Data will need to be submitted at 1Hz, either through the BM or through real-time metering (non-BM).
- Both services will require day-ahead procurement through pay-as-clear auctions.
- NGESO has yet to decide whether or not these contracts will be for EFA blocks (as with DC).
Of course, there is still plenty of testing, forecasting, and consultation to be carried out before these changes can take place. However, both DR and DM have been designed to meet a specific need. Their implementation should help the ESO achieve its goal of creating a suite of balancing services to meet the needs of our changing system, driving competition throughout the market.