Batteries in Future Energy Scenarios with Claire Dykta (Director of Strategy & Policy @ ESO)

The energy system provides a backbone for the whole economy. It supports a whole load of other systems. And all of those are changing. A big shift to greater data transferring around the economy, more digital tech. The energy system itself is changing as well because it's moving from a few big bits of kit, power stations and things, to lots and lots of smaller assets that are all interconnected.

The big enabler of a lot of battery storage construction over the next three to four years is kind of better dispatch within the balancing mechanism. And that is why it kind of it's kind of it draws so much attention and why it's such a kind of critical part.

So there's been a real shift in how we are dispatching. And I think we said before that point where you've got enough batteries operating in the balancing mechanism that they can displace other plants is a really critical tipping point.

Hello and welcome back to Transmission. In this episode, Ed is speaking to Claire Dichter, Director of Strategy and Policy at ESO.

The conversation covers the ESO's future energy scenario pathways, connections reform, the first months of the open balancing platform and much more.

For an introduction to the balancing mechanism, check out our previous episode with Claire linked in the show notes.

If you're enjoying the podcast, please hit subscribe so you never miss an episode and give us a rating wherever you listen.

Subscribe so you never miss an episode, and give us a rating wherever you listen. Let's jump in.

Hello, and welcome to another episode of transmission.

And today, we are joined by a two time guest.

Claire, welcome back onto transmission.

Thank Thank you so much for inviting me back.

Oh, you're very welcome. And today, we're going to be going through Fez, so future engine scenarios. We're gonna be touching a little bit on connection reform, and we're also we're going to have a look into more detail into the balancing mechanism.

And for people listening to this going, oh, god. I'm not sure what the balancing mechanism is. I've never heard of that. We also did an episode in November of twenty twenty three covering an intro into balancing mechanism, which we'll put in the show notes. And if you want to kind of just have the one on one on that, then that's the great place great place to go. But if you're if you're kind of keen to get into the detail and the updates since then, then we're gonna cover them in this session.

Brilliant. Claire, welcome. We are also going to cover this with the context of a new government coming to power. And so what we are really seeing here is this is this movement by having a new Labour government coming in, that we have a large change in direction, particularly on onshore wind, but also kind of across the board. And so given the context of what we're trying to do, onshore, offshore wind, as well as solar, it's a pretty exciting time to be in the energy space.

And what we really need is is is something to kind of forecast all of that and to show us the kind of pathway to how we deliver a sort of clean power system by twenty thirty. Enter enter Fez.

Claire, over to you. What what what what are what is the FES?

What is FES? So, as you said, FES stands for future energy scenarios, although it's got an expanded title this year, which I'll explain in a minute. So FES is an industry well known document. It's actually the end product of, an almost year long process, which has run every year for the last ten years.

And what it's intended to be is very much a stakeholder led process that sets out a range of credible futures for the energy system.

Now historically, from when it was first introduced to last year, it has been scenarios, hence why it's called FAIR's Future Energy Scenarios.

And we do a huge amount of stakeholder engagement, research analysis to pull together a really broad, perspective of what people think will happen over the time horizons of two thousand and fifty, what people are intending to do. So we have really deep discussions with individual organizations about their commercial plans.

And we pull all of that together, and as I say, historically into scenarios, so a range of credible scenarios.

This year, we've had a bit of a change, and it's called, the document itself is called Future Pathways to Net Zero, snappy title, which is a recognition of how we have slightly changed how we have produced our analysis this year. So we've still followed a very intensive stakeholder led approach where we've talked far and wide to lots of people, done lots of research.

But this year instead of having a range of credible scenarios, we followed a much more deterministic analysis, and instead have set out three credible pathways which would reach net zero by two thousand and fifty, and keep us compliant in the short term with the Climate Change Committee's carbon budgets that they set.

So narrower range this year, and all three of the pathways that we've included in that document would get you to net zero by two thousand and fifty.

Okay. And of those pathways, kind of, what what really what stood out for you as headlines?

So what's been really interesting this year is historically, we've talked about actions that need to happen to stay within the range that we forecast.

This year we've been more precise in saying, there is really only one key message, which is that decisive action in a number of areas needs to happen in the next two years in order for those pathways to remain viable, to keep us on the trajectory of those pathways.

And that picks out eight actions that sit underneath that and says these are the eight areas where decisive action is needed. So it picks up things from smart technology in homes through to supply chain and skills. So it's really broad and really shows that there is very limited time to really move forward and and push things along to stay on that net zero pathway.

And I think that that for me really stands out as being the thing that we need to do. So I think it's really easy to say, oh, well, we need to improve supply chains or we need to make sure the regulation is is appropriate. And that that sounds interesting, but really it's kind of it doesn't have the the the substance that's actually needed to make this happen. And so maybe kind of taking a couple of those eight, like, would you be able to give us a little bit more of some of, like, the specific measures that are really going to be taken or some of those specific actions that you'd recommend being taken over the next two years that will actually tee up the next the next part of the transition?

So one of the ATIS smart technology. So within our analysis that we do, we include quite ambitious numbers for demand. So we assume both that there's fairly extensive energy efficiency measures undertaken, and that there's also high levels of flexibility in the system.

The reason that we assume that is that that leads you to a more efficient system overall, and a more efficient system means lower costs for bill payers.

If you have an energy system that is built for much higher levels of demand, you have to build more infrastructure.

Smart technology is really, really important because it allows homeowners to be more flexible in the way that they use demand. So everything about the energy system globally, but definitely in GB, is changing.

Humans are really predictable, and, it's really funny. One of the first things that you notice when you, really get into, or get close to system operations and and keeping the lights on is that, how predictable humans are, and you can look at a similar day in history and very accurately, guess what electricity demand is going to be on that day.

That change is going forward because people's TV habits are changing, the energy efficiency of buildings changes.

But we can also take that even further by encouraging people to use energy differently. So people with electric cars, rather than getting home from work and plugging them in straight away, plug them in overnight where the demands on the system are lower, use a tumble dryer overnight, and things like that. A smart technology in people's homes, combined with the rollout of smart meters and half hourly metering enables all of that to happen. So in that space, all of our recommendations are around technology and some of the underlying infrastructure, like meters and things that people don't necessarily think about all the time, but are absolutely critical to the system functioning effectively.

I think that that piece around kind of the changing nature and shape of demand is kind of one of the most interesting parts of forecasting, that sort of future network need. Certainly, we spend a lot of time thinking about it here. And so, yeah, really interested to see that sort of being a critical part of Fez. I suppose the other side of this is that this is an energy storage podcast, and so it would be remiss of us to not talk about it.

And I think if I was if I was kind of surprised by one thing in Fez, it was the kind of shape of perhaps, like, how storage looked. And so in the near term, it kind of ramps up quite quickly. I think you get to a number that is above, like, Modo's forecast number, which is kind of based on, like, what has been delivered to date. And then it kind of also takes almost like a bit of a knee and kind of and and slows down from two thousand and thirty.

And so it's almost like slightly faster than us near term, but then slightly slower than the Modo long term. Is that something that you you sort of got a bit of feedback about? Is that something that you or or what were the drivers that kind of influenced the shape of that storage build out?

So to to carbonize whole economy, you have to decarbonize the power system first. Because that is so fundamental to underpinning everything else.

When you've got a power system that is dominated by renewable generation, so wind, solar, tidal, and other things. In order for that to stay operable, so in order that the lights continue to stay on, there's, a number of other technologies, or different capabilities that you need to be able to manage that system. It's very different to a system that is operating on gas and coal stations.

Storage, both batteries and long duration storage, are really really critical to being able to operate a decarbonized power system.

And the two things provide slightly different, services, although there's some interchangeability.

So batteries or shorter duration storage help, particularly with the stability of the system. So I think I talked about in, podcast part one that you've already plugged about, inertia on the system and when you have a power system that's got lots of renewables connected to it, a small disturbance on the system can have a much bigger impact than if you've got a power system that's got lots of fossil fuels. Batteries in particular, are really helpful in a system like that because they can respond to system conditions extremely quickly and they can stabilize it very quickly.

Longer duration storage, which can be long duration batteries as well as other types of storage, help with a different but linked issue, which is as you move to a renewables dominated system, your assessment of the security of that system changes. Say, historically, the power system, when we were thinking about security supply, the thing that you would be most worried about would be the coldest half an hour in the depths of winter when demand is really, really high. And do you have enough generating capacity on the system to meet the demand?

In a renewables based system, you're more worried about the three or four days where the wind isn't blowing, and suddenly that generation capacity that you were relying on isn't there. And that's why longer duration storage has a role to play as well, because it can help to plug those gaps.

The reason that that has a very quick build out and then starts to almost flatten off a bit, is that as I said earlier, the power system has to decarbonise really quickly, like in the next five to ten years. And you can't do that without the storage penetration growing as well. So it has to be a really rapid build up in the very near future.

I think I'm I think I'm on board with the first part. I mean, someone being kind of more or looking for more storage near term, I really I really like that as a as a kind of as a as a pathway. I think the the really interesting part for me is perhaps just just into this whole kind of phase pathway process. This is it kind of also within the the documentation you kinda talk about moving to a techno economic model, which is essentially, like, taking a look and working out based on the costs of each of these technologies, based on the future prices that we see, like, how many of those will get built and and kind of how much capacity will be added to the system.

And I think one of the I mean, we we run a pretty similar process on our side, and I I think one of the things that really stands out to us is that not everything is quite like for like. So if you have, like, solar or wind, very proven technologies, you know exactly what they're going to do, and you know that they can get delivered, they're modular, they can be installed, there's very low risk. And I think we could probably say the same thing is true of, like, short duration storage, and maybe I should kind of put put short duration in in quotation marks. Then when you kind of look at some of the other techs coming through and now into the twenty forties, and not say they won't happen, but if you have, say, CCS, long duration energy storage and high strength power, maybe I'm being kind of too like, I'm not being I'm being very short sighted and I'm just not seeing that these techs are gonna come through.

But but we just we we don't have the same level of proven delivery of those technologies.

And I always think that when you then do a techno economic model that's kinda saying, oh, well, they'll get their cost down.

Will they? Because, actually, what we've seen today is that the system can get a really long way on wind, solar, and battery storage. And when we look at other grids, battery storage is getting to kind of six or eight hours. And so there's this kind of really interesting yeah.

Maybe I'm being, like, faulty pessimistic about how quickly those other techs can come through. But did did you did you give that some thought around, okay, everyone's come through and said, this is our cost of our particular type of flexibility. But did you kinda think about, well, actually, do we see that on other grids? Has that been proven?

Has it been delivered? Because I think that's that for me is a really important test.

Yes. As you say, this is this is really difficult. Yeah. Right? The some of these newer technologies are not deployed commercially at scale anywhere in the world.

But what you can do is look at other technologies and how the price of those, the cost of those have evolved over time. So you can make some assumptions based on that.

What I would say, maybe I'll do my contrarian view early, is you cannot run a power system on just renewables and batteries.

Because that particular circumstance that I outlined, if you don't have any wind for three and four days, to be able to cover that with batteries, even if they were six to eight hours, you would have to have such a big battery fleet. It would be not commercially viable.

Yes.

So you do have to have other technologies in the mix. You're absolutely right. It is really uncertain how those things will evolve, but which links back to our key messages, right? We need to, there needs to be clear policy decisions to allow those technologies to develop. There's an awful lot of investments going into them, particularly in the GB market, and they will roll out. They all offer different characteristics to the system. And I think I may have said before, from a system operation point of view, I always favour diversification, Because anything that results and eggs in one basket always makes me nervous.

But yeah, it's, they're scenarios, right? So the closer you are to today, the more certainty you have beyond that, the greater the uncertainty. But the world is moving fast on this stuff. And I think in a couple of years' time, we'll be in a very different place.

And this has kind of been covered in a few places, but certainly solar wind battery storage, plus some sort of reserve maybe on the gas side. We saw reserve being mentioned in labor manifesto.

Like, potentially, that type of solution might get us through, as you say, those really hard to deal with periods in the future, potentially with then things like CCS or longer duration storage being part of the solution in those very tricky to manage periods?

Yeah. Potentially. So gas is a really important transition fuel, as in methane gas. So we still have a fleet of gas fired power stations, ensuring that they are available and a transition away from them is managed is really important.

As you say, the government has said that, they think a strategic reserve is a good answer. I think that's probably smaller, smaller strategic reserve, so I don't think there is a definitive it looks like this, but I think you'd struggle to find anyone who didn't say that making sure that the transition is smooth from the system that we've had to the renewable system is really important, and the the gas fleet play a really important role in that.

And to kinda just context on this, I think we can get a a really, really long way with solar wind storage, interconnection, pumped hydro. That gets a really, really long way. Yeah. We are just talking about how do you deal with a smaller portion of this.

So it's not like, it's not like there's got your moment. Oh my god. You need gas. It's like, yeah.

Okay. We know. But we can actually get a really, really long way before we get to that point.

Yeah. We really yeah. Yeah. We really can.

Okay. And then final piece on the FES. So I just just to talk about how does the FES kind of then influence everything that comes from ESO slash NESO slash strategic spatial energy plans? How does all of that get informed by FES?

So you said ESO to NESO. Maybe I should explain. So ESO is the electricity system operator. So we currently plan the electricity network.

We design and develop our electricity balancing markets, and we keep the lights on. There's been a discussion ongoing for a while which was recently committed to publicly by the new government that we're actually going to transition and become NEFO, which is the National Energy System Operator. And that's going to take place early autumn.

The role of that organisation is to think, is to think broader. So I think probably the conversation so far has done a really good job of revealing that the energy system is really complex, and the future of it is highly complex and highly interrelated. Like the energy system provides a backbone for the whole economy. It supports a whole load of other systems.

And all of those are changing. So, you know, a big shift to greater data transferring around the economy, more digital tech.

The energy system itself is changing as well, because it's moving from a few small, big bits of kit power stations and things, to lots and lots of smaller assets that are all interconnected.

The role of NESO is to think about that system of systems, and how it all interrelates, and plan for the future. So plan what the network infrastructure looks like, plan what markets would look like. So provide routes to market for all of those assets that are connecting onto the system, to ensure that GB is an attractive place to invest and that we do progress towards decarbonisation.

May maybe dealing with some, like, some of the really thorny things, like when you get a lot of heating done through electrified processes, e g heat pumps or just straightforward electric heating?

As you start to use your gas, your gas network slightly less, how do you kind of plan for that, and how do you start to take parts of that offline? Does that fall under NISO's NISO scope?

Yep. Also thinking about the cost impact of that, like what does that mean for the person at home that's paying the bills.

So, yeah, all of those types of things. And really trying to look at it from a whole system point of view. So moving away from just thinking about keeping the lights on in the power system. Using all of that skills and expertise that we've got within the organisation for doing that, but applying that across the whole energy system to say, actually, if we want to decarbonize fully by two thousand and fifty, what do you need to do to get there?

Okay. And last piece on on FES and kind of policy, the connection reform. We are currently going through a long process on connection reform. We currently have a consultation out out now.

What are kind of the big impacts you expect those connection reforms to have?

Yeah. So connections reform. So all of your listeners should be very aware of connecting until you're getting access to the power system is really difficult. Like there's been a huge increase in people wanting to connect, not just to our system here, but all over the world. There's lots of countries experiencing the same thing.

We're seeing, about twenty gigawatts a month still being added onto the queue. So the queue of people that are waiting to connect.

Does that mean we're soon to go through a thousand gigawatts?

Yeah. That sounds about right.

Sounds about right for a system that will, at some point, be about three fifty to four hundred gigawatts in total. So maybe six hundred ish of that might just not not come through?

Yeah. So the the queue itself, so everyone that's waiting to connect to the system, the queue itself is massively subscribed for what we will ever need.

Mhmm.

And certain technologies in particular are massively subscribed. So particularly batteries and particularly solar.

The way that connections works at the minute is what we, first come first served. So you say, I would like to connect onto the system please. It's almost like going to the fish counter in the supermarket. You take a ticket, and you're like, right, you're number forty three. So there's forty two people in front of you. And that's how the system works. If it gets to the point where your date comes around and you're not ready, then, you know, you move out or you move back.

But we we do all of our network planning on that basis. So it's a very level playing field.

You ask first, so you get considered first.

What that does mean is that there's an awful lot of projects in that queue which aren't real, or have very very little chance of going anywhere, so dubbed the zombie projects, I think over the last year. So most developers will have a portfolio of projects because they're diversifying their risk, and they'll always say, well, you know I expect maybe ten percent of these to come to fruition, but I'm gonna pursue a number of projects and operate on a funnel basis and I'll end up with my viable ones.

The issue with the current connections process is that all of those come and join the queue, and we currently, even if we know that, so even if we know in reality only x percent of these projects are ever going to connect, there's nothing that we can do about that at the minute.

So there's been a a project running with industry for quite some time now, to look at reforming that process to something that would make sure that we get people who are viable connected quicker, which means that we connect all of those cheaper, lower carbon or carbon free technologies quicker. So we're moving, or we're proposing to move to a first ready, first connected system, so if you're ready and we can facilitate you then you connect.

That's been through industry development, so it's been developed with industry, and it's currently under consultation, and would go to Ofgem for decision at the end of the year without them being implemented into all of the relevant processes. Okay.

So under a rather snappy snappy consultation period of of eight days as well. So by the time this is out, I think it might already be that consultation period will be over, but there'll be another one as well.

Yeah. And it's been through multiple both sort of development forums and consultations previously. So that it is a recognition of how important it is and how tricky we need to get a move on.

Yeah.

So we've covered fares. We've covered connection reform. And onto, I think, the really juicy part for battery storage enthusiasts slash nerds, and let's talk about the OBP.

And just to start off, so what has been delivered so far, and what does the data say?

So so OBP, open balancing platform, so replacing the system that we use to, dispatch in the control room.

And when I was last on the podcast, we were, we had either just or were just about to do the first release of OBP, which was going to introduce what functionality that we were saying was a multi dispatch tool. So I think I, at the time, said historically when we dispatch them, so we issue an instruction to an asset in the balancing mechanism to do something, we would type it. So we'd write a list message to them, tell them to do something and then it would do it. Which in the old world of a few big assets was fine.

In the new world that we've talked about, lots of smaller assets and a much more complex energy system, obviously, a highly analogue way of dispatching the system just isn't appropriate because it's too slow. It's too slow for that world. So the multi dispatch tool that was released as one of the first new functionalities of this open balancing platform enabled the control engineers, so the people that are on shift, keeping the lights on, to issue instructions to multiple assets at the same time, which meant, instructions should could be issued much quicker, which then means that all of these smaller flexible assets should get utilized much more. Because when when system conditions are difficult from a system operator point of view, you need stuff to act quickly. So being able to issue instructions really quickly is really helpful.

So that was released as one of the first kind of parts of functionality, this open balancing platform, there's been other releases since then, there's other releases planned coming forward.

We saw an almost immediate impact in the usage of flexible assets on the system as a result of that.

There's been another, a number of other changes as well that we've seen since last time I spoke to you. So one is the all of these things have got industry titles. So one is the thirty minute rule.

Yes.

So, historically, we would only have issued an instruction to a small asset for fifteen minutes. Because within the control room you can't see all of the data associated with that asset, so you don't know what it's capable of doing. For a CCGT, you can assume that subject to something breaking, it's going to run for as long as you want it to. Obviously for something like a battery that's got a limited duration, you can't necessarily see that. So historically we would have only instructed for fifteen minutes. That rule was changed earlier this year, so that now we instruct for thirty minutes, not fifteen.

So that was change number two, on top of the multi dispatch tool.

Change number three is that we have employed dedicated resource into the control room. So we did it on a trial basis at first, so someone who was on shift who was specifically tasked with looking at smaller flexible assets and whether they were being utilized to their full potential.

That trial was successful, so we are now in the process of employing that as a permanent resource, so we are out actively recruiting to make that a permanent resource, because we've seen such positive response from it.

The fourth change is the introduction of a new product called balancing reserve.

So I can't remember if I talked through this before or not, I think I probably did. The role of the control room is to manage the frequency and balance supply and demand second by second, as well as managing all of the constraints on the system.

As part of doing that, obviously things that you don't expect happen, so stuff breaks or there's less demand for electricity than you thought there was gonna be. So you always have some capacity held in reserve as your, like, safety cushion to deal with those things.

Historically, for assets like CCGTs, you would schedule those quite far in advance because you have to give them quite a lot of notice to get up and running.

For something like like a battery, where it's much faster to act, historically, we wouldn't necessarily have scheduled them that far in advance, because you don't need to. So you would hold it until you know whether you need it and then issue it. Effectively what that means though is that if the situation that could have arisen doesn't, you won't use those faster acting assets because you don't need them anymore.

What balancing reserve does is it means that we commit longer ahead to holding those assets, so a bunch of batteries can say, we would like to be held in reserve, and at the day ahead stage we'll go, that's great, we'll contract you for this half hour period, you need to be available then and we will pay you a price to recognize that you're making your asset available to potentially be used.

So it it puts the smaller, more flexible assets on a more level footing with the longer run ones.

Okay. Lots of change. Second part of the question, what does the data say? I've got some MODO numbers, which I'm happy to put forward, but I'd love to hear how it's been going from your side first.

Yeah. So we've seen we've seen a really positive impact. Let's say that's a lot of change that's happened in, what, probably nine months. There's further changes coming in, like we're adding new functionality in all the time. It's difficult to attribute successes to any one particular change. We've seen a marked increase in the volume of batteries in particular that are being dispatched and the revenue that batteries are receiving.

Your data is probably a bit more up to date in mind, in that we go through and make sure that everything has been flagged correctly and things. But in May, we saw battery revenue in the BM at about one point seven million pounds which is a significant increase on where it was when I spoke to you last. Initial numbers I've seen for the most recent months have shown that that trajectory is continuing, so it's a very positive picture.

There's some other changes that we are, continuing to put in. So a really interesting one is that we have a beta tool in the control room at the minute, which is giving the control engineers live feedback on what they're doing. So if it will say, oh, we noticed you just did this, you could have done this, why have you done that? And we're finding that that live feedback for the control engineers is really useful for to them in thinking about what they're doing on the system. And so a combination of all of those things seems to be having a really positive impact.

And and as that actually kind of comes back to the first podcast we did on the the BM, then you highlighted this, that both as kind of the technical dispatch, but then there's also the the human element of the shift desks that roll through dispatch in the bouncing mechanism, and, obviously, the kind of training that goes alongside that and how quickly you can kind of expect to see those those changes kind of bedded in. So it sounds like a interesting really interesting development. I suppose on the data side, just to add just to add a little bit to it. So I think a a pounds, million per month is is a good is kind of a good starting point for it.

We've certainly seen, perhaps since we last spoke to where we are now, just the actual volume of batteries in the balancing mechanism. I think it was something like naught point eight gigs ish maybe a year ago, and now it's like two point four gigs ish. So, like, one and a half gigs of batteries go and do some frequency response and kind of the rest of it kind of comes in and does balancing mechanism in wholesale trading. And so a little bit of what happens when you kind of triple the volume is that you will get slightly more money coming through.

And so we when we look at it, we try and normalize it for the sort of the volume available. Mhmm. We use something called a dispatch rate, which is, respectively, of the in merit battery volume available, how much was being used. And so just very high level numbers.

I think back in November, we were around about four percent. So four percent of batteries when in merit were being dispatched, and that number is now around, like, eleven ish percent, which is definitely testament and kind of, I think, corroborates a little bit of what you were saying around much better dispatch.

Yeah. And obviously, going back to our previous conversation, when you think about dispatch, you have to think about in merit. So there is a pure cost element to it, and, you're dispatching assets in cost order.

But we also need to consider the system requirements, so the market will solve for balancing supply and demand, the control room will also have to solve on top of that for things like voltage requirements, and constraints that they're seeing on the system. So when they're dispatching live, in the control room, they will go in cost order subject to system requirements.

So if they need a certain capability, that will Yes.

They will dispatch for that, if that makes sense.

And and you mentioned briefly, we didn't talk about it, but you mentioned briefly flagged actions. And so essentially, these are actions that aren't taken, for the purposes of of that kind of balancing, but they're taken to deal with a system need. And so when something gets flagged, it's typically taken out of these calculations because it's it's essentially like a technical dispatch rather than something that's like an economic running of the balancing mechanism. And so I think as you as as you do with your numbers, I think we do the same thing on our side, which is when they are flagged, and that's another maybe that's another podcast.

But when they are flagged, then then then we do we do we do take them out. And I suppose this is the really, really important part, right, for for for battery storage investors and owners and financiers, which is a lot of the money that's made by by batteries, from the capacity market, from wholesale trading, and from frequency response is kind of really well known with small changes around the edges, but generally really well known. The thing that's kind of the big enabler of a lot of battery storage construction over the next three to four years is kind of better dispatch within the balancing mechanism.

And that is why it kind of it's kind of it draws so much attention and why it's such a kind of critical part. And I suppose the big the kind of the big question is, okay, so we've gone from if if you if you look set kind of Modo's numbers and, you know, but, you know, I think they kind of corroborate yours and they tell a nice story anyway. So let's say we go from four percent dispatch rate to eleven percent dispatch rate. I think the real question for me is, okay.

Well, where can battery storage get to, and when does it start to or should it start to get to parity with other technologies? Perhaps it could go further.

Yeah. So all of the changes that I've talked about and the functionality to come is to ensure that technologies are dispatched on a level playing field, taking into account that different technologies have different characteristics. So as you say, when you're trying to solve system issues, there's characteristics that you need to solve particular issues. I know we've talked about it before, so our, although our numbers are moving in the same direction, they are, they are very different.

We're we're pretty pleased, we're definitely pleased with the direction of travel, and we've seen, so we've certainly seen, so I've seen days actually recently where we haven't scheduled in any traditional plans, however you want to call it, for periods of the day, and all that's been scheduled in is batteries. So there's been a real shift in how we are dispatching. And I think we said before, that critical tipping point where you've got enough batteries operating in the balancing mechanism that they can displace other plants is a really critical tipping point. And going back to the start of this podcast and the conversations we're having there, it's really exciting development in terms of the the system decarbonizing.

Yeah. And absolutely. And and maybe just to kinda go beyond UK, like, we see this in, for example, California, that things like battery storage can, at periods of time, be the largest thing that's being dispatched on the grid. It's the, you know, the thing that's providing flexibility.

So it's not just the UK. Right? We're we're starting to see it kinda coming in from from other markets.

Maybe just to kind of just to kinda come come back to that point. And and one thing you mentioned there, actually, sorry, just to just to pick it up is is kind of batteries being dispatched or being scheduled for dispatch more than other technologies.

ESO doesn't pick winners in this. Right? You're you're picking based on merit. And so what's implied within that is that the the cheapest way of providing that flexibility for that day in question came from battery storage.

Yeah. Yeah. And I think that's probably a really interesting point to land for people that, actually, this isn't something that's like this very, very expensive tool that should only be used kind of once in a blue moon type thing. This is something that is a really, really cheap and economic part of part of how you balance.

Okay. So so just to kind of then to come back to something I'm I'm kinda feel quite passionate about, which is that I I feel like ESO and NESO, and industry often come head to head on this in that ESO will say something like, ah, with this is a move in the right direction, and industry will say, ah, that should be more. And, actually, we're both kind of looking we're trying to go in the same direction, which is how do you do everything at lowest possible cost to consumers, which is what we're all trying to do. And I suppose the way that we can kind of both do that is around transparency of data and having metrics that we can look at and say, okay.

Great. We can see where this number is. And what would be lovely about that would be that we could say, okay. It looks like maybe we could kind of tweak how this bit works, and so we can get better utilization of battery storage if that's something that we see.

And ESO can then dispatch everything at lower cost, and then consumers can get cheaper bills. That feels lovely.

Is that or how is ESO looking to enable that through kind of metrics and data?

There's two different sides to that. Right? So there's the metrics and data about what's happening now, and there's been really, really helpful conversation with the storage community, particularly batteries, around data and what we could publish that would be helpful in this space. That's, been really useful and that's kind of still developing so that we can, put information out that is useful.

In the sort of more medium to longer term, I mentioned earlier around how this sort of energy ecosystem is changing and needs to be more data driven and more digital.

We're doing we're doing lots of work on looking at what that means, and, you know, OBP is part of that, so that provides us with a much more flexible dispatch system that is we are better able to flex and change than what we've had historically.

We've actually done quite a lot in the past few years around making data available, but there's lots more we can do in that space. So kind of, you know, everyone is tech savvy, that makes me sound really not tech savvy, saying tech savvy, but everyone is tech savvy. That it's kind of like the more data that we can publish the better, because it's not like we're flooding people with data. People, if we can publish stuff and it's easy to plug into, so that people can manipulate it themselves, it takes away some of that, feeling that there's lots of stuff going on inside the ESA that people don't understand.

So that's the journey that we're on. It probably feels incremental because it is incremental. It's kind of like stuff improves all the time. I think it's helpful, you know, when we first talked in November, we talked about the huge increase in batteries on the system.

I think if you do the same thing and look at publication of data, that's probably gone through the same sort of journey. There's still a a long way to go on that, but that's I completely agree. That is the key to all of this is making all of that really transparent.

And and I suppose kinda linked to this, so in the way OBP works, four year program, twenty twenty four to twenty twenty seven, the first things, I call it bulk dispatch, as you say industry kind of has its own names for these things, If the kind of easier steps being done and the latter stages, which might be more based around constraints and kind of more technical dispatch, have we kind of left the harder things towards the end? Is that is that is that your feeling?

So none of it's easy.

I think so I think it is worth remembering that boot dispatch, multi dispatch, whatever you want to call it, that was actually scheduled to release much later in the program.

And through the industry conversations that happened early on in twenty twenty three, we went away to see if we could pull it forward, and we pulled it forward to one of the first releases in the program. So we've you know, as well as it being an agile tool that we're using in the control room, the delivery is agile as well, so that we can move it around a little bit. It's all difficult, right? Balancing the system is complex. I don't think what's coming is more difficult than what's been. It's just all different parts of the same journey that when knitted together, put us in a really good place for what we were talking about earlier.

And you know, an energy system, a power system that's going to look really different in the twenty thirties compared to what it looks like today.

And I'm, like yeah. Definitely super excited to see storage being more used in those kind of system flagged actions in part because it sets a precedent for how other systems can do it. I mean, that transparency of data is is huge. Okay.

So last piece I want to do on ABP was actually just to kind of take an example of a particular day.

If I just kind of talk through it without talking about any particular asset. So this happens to be a day at the start of April, and, actually, a few a few batteries kind of ran ran this program where effectively they had some charge at the beginning of the day. They were called to discharge through a FPN, final physical notification, effectively discharging into the wholesale market, And then they start to run out of charge.

And as batteries do, they then start to go, oh, okay. Well, what do I need to do? I'm running out of charge. Okay.

I'll start to charge. And the batteries signal through the FPNs to, the control room that they want to charge. And then the control room, which then takes actions after gate closure, so closer to delivery, was then reversing that position of the battery. I think it's a really interesting example because I I can see that the battery is getting is providing flexibility to the wholesale market, and I can see that it provides flexibility to the balancing mechanism.

But I think if I went to talk to a friend down the pub and said, this battery, you know, it got paid and it didn't actually charge or discharge, someone might say, well, that's an absolute scandal. And for me, obviously, it's not, but I kind of how does how does how does ESO think about the market that day and in general about that type of use of of of flexibility?

Yeah. So that day is really interesting, both in terms of what the assets or why we were asking the assets to do certain things and why we weren't what we were not asking them to do as well. So the day that you're talking about, we talked before about how the wholesale market balances supply and demand. So really simple, high level terms, all of the energy suppliers know how much demand that they've got from their customers, both their industrial ones and their domestic ones, and they'll buy power to make sure that they're balanced.

And the market arrangements incentivize them to do that. That doesn't always work. The market doesn't always resolve itself. On that day, the market was pretty good.

It was pretty close to resolved in terms of where it thought it needed to be.

What happened once we got into the day was that it was quite it was quite a high wind day, so we were expecting there to be a lot of wind generation on the network.

When we got closer to real time for the peak, so the sort of tea time period in my northern terminology, to the time for anyone who's at Southern, we the wind didn't materialize to the level that we were expecting it to. So there was less wind generation than we thought there would be. Demand also started to out turn a bit higher than we were expecting.

So the cumulative impact of both of those things was that we were short on the system, so we didn't have enough generation to meet supply.

Then if you add into that, that you've got a number of batteries that were indicating that they were going to start charging, so adding to the demand on the system.

When the control engineers have gone through and said, actually, I don't have enough supply to meet demand, so I either need to turn my supply up or I need to turn my demand down.

The batteries are one of the options, and that's like, actually we would like you not to charge in this period, because you're going to add to the demand, given there's a bigger gap that we're trying to fill, so please don't. So the batteries will have been paid to not charge, because that will have been cheaper than alternative actions that we had available to us. What is interesting is that sometimes they, so some batteries are located behind constraints, which means that they're on a location in the system where sometimes it can be different difficult to export or import power over what's called a boundary. So it's an imaginary line. I'm saying imaginary. In my head I can see all of the maps where there's actual lines drawn on them, but in reality it's an imaginary line on the system, where it's, you can find, there's a constraint in how much power you can transfer over that boundary.

Sometimes flexible assets will be asked to change their indicated behavior because there's a a constraint biting, so they would make that constraint worse.

On this day, that was not the case. And going back to our conversation a bit earlier about our flagging, you know that that's the case because all of the actions in this case, on the battery assets, were flagged as energy.

So those batteries were being asked to change their behavior because of a supply demand imbalance on the system. If they were changing being asked to change their behavior because of a constraint, it would have been flagged as system.

I think it's super interesting. Right? It's kind of it's a little bit of a a bit of sight into what does actually the how does the future system operation start to work, and how can you get this this kind of multiple types of flexibility from battery storage both in wholesale but also in the balancing mechanism? And in some cases, those batteries weren't fully charging.

They were kind of flipped the the whole way over in terms of to to discharge as well. So kind of a two x on on the power side. Okay. Super interesting.

We could talk about that all day, but it's it's time for kind of two final questions. So the first one is around, is there anything that you would like to plug?

So it it's not a thing in particular, but, I mean, we've mentioned it a few times. ESO is transitioning into ESO.

It's really exciting that everything that we've talked about today and the complexity of the future world is a huge challenge, an exciting challenge, but a huge challenge, and ESO will play a really central role in that. So the fact that that is happening really soon is a really exciting thing.

Okay. And contrarian view, so what do you believe that the majority of the market doesn't?

I'm gonna take market in the broadest definition of the word, say the carbon intensity of the GB grid has reduced by sixty six percent, from 2013ish to twenty twenty.

I think your average person on the street would be really surprised if we told them that.

And I think the progress that we have made is what gives me confidence that the rest of it is achievable and achievable quite quickly. So we talked earlier about different technologies and things. We've come so far, we're the fastest decarbonising grid this decade.

We've, you know, we've come this far. We can do the rest.

Okay. I love it. I think we had we had a similar or we had a contrarian view that came from another guest who said that the final portion of the the the energy transition will happen faster and not slower. And so if we have moved the fastest as a as a grid over the last, let's say, ten years, then and that forecast also comes through, then I think great things lie ahead. Claire, thank you very much for for joining us on on transmission. You've been a fantastic guest, and thank you for running through all of those details. And I look forward to having you on for part three in twenty twenty five.

Thank you for having me.

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