[PPT] - Future Outlook for Demand Side Flexibility Cian McLeavey-Reville PowerPoint Presentation

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Agenda

Session 3:

Future Outlook for Demand Side Flexibility

Cian McLeavey-Reville Andy Wainwright Sophie Hind

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Power Responsive Flexibility Forum, October 2018

SO Innovation

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The SO Innovation process enables rapid project development

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Our CBA for innovation ideas determines whether an idea should be developed

The ‘Bad’ ▪ Costs: project and full implementation / rollout costs ▪ Risks: overspend, 3rd party, technology, resource, customer ▪ Existing activities: what has already been done? The ‘Good’ ▪ Technical merit: does the project make technical sense? ▪ Benefits: type and quantification ▪ Strategic relevance: how well does it fit our strategy?

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How we fund innovation projects

Network Innovation Competition (NIC) ▪ Annual competition between all network

perators (£70m electricity,

£20m gas) ▪ Development and demonstration only ▪ Typically multi-party, several million pounds, 3-4 years Network Innovation Allowance (NIA) ▪ Annual pot of money ▪ Research, development and demonstration ▪ Typically £300-400k, 6-18 months (no constraints) ▪ 75% of NIA spend must be external to SO ▪ Strict rules around treatment of IP Other sources of funding ▪ Can offer support to third parties seeking funding

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▪ First ever SO innovation strategy published in 2018/19 ▪ Sets out SO innovation priorities, and how we plan to work with industry partners to deliver against them ▪ Currently refreshing strategy for publication in 2019

We published our first innovation strategy in 2018 and identified 16 innovation priorities

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Reimagining system restoration

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How to find out more

1. Visit the website: www.nationalgrid.com/soinnovation
2. Email the team: box.SO.Innovation@nationalgrid.com
3. Reach out to me:

Cian McLeavey-Reville SO Innovation Manager cian.reville@nationalgrid.com

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nationalgridso.com National Grid SO, Faraday House, Warwick Technology Park, Gallows Hill, Warwick, CV346DA

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Andy Wainwright Business Lead Whole Electricity System

Facilitating Whole Electricity System Outcomes

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The Energy Landscape is changing

The energy landscape is changing to meet the challenges of; Decarbonisation Decentralisation Digitisation

30 GW of distributed generation,

excluding small domestic, of which almost 50 % renewables

9GW of distributed connection

applications processed in 2016

Over 10 GW distributed solar regularly

in the South for much of the summer 18

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How we’re responding to these challenges

We believe that facilitating whole electricity system outcomes will ensure that industry arrangements develop in a way that maximises consumer value Providing thought leadership

‘Facilitating Whole Electricity System

Outcomes’ Working with others

Playing an active role in the Open Networks

project Developing new ways of working

Using our collaborative initiatives to learn how

the ESO needs to change

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Facilitating whole electricity system outcomes

Facilitating whole electricity system outcomes will ensure that industry arrangements develop in a way that maximises consumer value. This can be achieved through a focus on six key areas.

Consumer Value

Markets Operability Innovation Technology Governance Options Development

We believe in 2030;

Planning, development, investment and
peration of the GB networks will be
ptimised on a whole electricity system

basis irrespective of ownership boundaries.

Solutions to system operator challenges will

be open to a full range of participants, facilitating both market and asset solutions.

Best overall value for consumers will be

achieved, irrespective of the ESO or DSO performing the analysis.

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ENA Open Networks: Future Worlds

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The Worlds

Five potential future

industry structures in a decentralised, digitised , decarbonised energy landscape

Considers how

system operators should be neutral facilitators of flexibility markets

Provides options for

who these neutral market facilitators should be

Alignment with

Ofgem’s work on Forward Looking Charges and Access Arrangements

The Actors

Worlds are

described through the eyes of a broad range of stakeholders referred to as actors

Actors include

Suppliers, Aggregators and Customers

The consultation has closed with around 50 responses being

received. These are now being reviewed and will be

published shortly on the ENA website.

http://www.energynetworks.org/electricity/futures/open-networks-project/future- worlds/future-worlds-consultation.html

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BACK COVER DESIGN Disclaimer text for back cover? Will both addresses be on the back?

nationalgrideso.com Faraday House, Warwick Technology Park, Gallows Hill, Warwick, CV346DA

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Project TERRE and Project MARI

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What are TERRE and MARI and what are they trying to achieve?

New Cross border Balancing markets, as required by European Network Code.
Allow Transmissions System Operators (TSOs) to fulfil their balancing needs.
Providers with a minimum of 1 MW generation or demand can participate. This includes

aggregated units.

Project TERRE: Replacement Reserves Product (RR) Project MARI: Frequency Restoration Reserves with manual activation (mFRR)

Marginal Pricing
Schedule Activation
30min Full Activation Time
One auction per hour
Go-Live: December 2019
Marginal Pricing
Schedule Activation & Direct

Activation

12.5 min Full Activation Time
One auction per 15 mins
Go-Live: December 2021

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Ability to register as a Virtual

Lead Party and register “Secondary BMUs”

New international markets

for GB market participants to compete in

Introduction of new pay-as-

clear pricing approach

Removal of barriers to entry

for “non-BM participants”

Estimated reduction in

balancing costs of €13 million per year for GB

What does this mean for demand side providers?

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How will the platforms work?

1. BSP provides bids to local TSO
2. TSO sends bids to central platform
3. Network constraints are provided to central platform
4. TSO sends needs to central platform
5. Algorithm computes optimal solution
6. Central platform informs TSOs of bids that are to be activated
7. Central platform informs TSOs of cross-border exchanges
8. Network constraints are updated ready for next algorithm ‘run’
9. TSOs inform BSPs of their activation

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Feb 2019- Pre-registration

f Secondary BMUs

Aug 2019- Parallel run testing of the project TERRE platform (LIBRA) Dec 2019- Project TERRE Go-Live Dec 2021- Project MARI Go-Live

Timeline

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ENTSOE Project TERRE

website

ENTSOE Project MARI