In October 2020, National Grid Electricity System Operator (ESO) introduced its new frequency response product called Dynamic Containment, providing new revenue opportunities for fast-acting flexible assets.
The role of the ESO is to keep the GB electricity system frequency at 50Hz. This is achieved by taking action second-by-second to keep electricity demand and generation balanced which keeps system frequency as close to 50Hz as possible.
A key part of the toolkit that the ESO uses to manage the system frequency is frequency response. This has been procured through a service called Firm Frequency Response (FFR), which has required response from providers within 10 seconds.
Centrica Business Solutions successfully participates in FFR with a range of assets; both assets that Centrica owns and also aggregating customer assets down to domestic level. This allows for rapid and automated balancing of the grid across a wide range of business assets, such as those that generate energy onsite (renewable energy resources), store energy on site (batteries), and consume energy (manufacturing equipment).
The new Dynamic Containment product is part of a suite of new frequency response products that the ESO is rolling out, in response to the decarbonising power system. With an increasing amount of variable renewable generation being added to the electricity system, it is becoming increasingly challenging to keep the frequency at 50 Hz.
With greater renewables on the system and reduced generation from large fossil fuelled power stations, the ESO has determined that the design of the new suite of frequency response products will require response from providers within 1 second. The ESO is seeking to phase out its existing FFR suite, with the new suite fully operational by April 2022.
The current design of the Dynamic Containment product means it is beneficial for batteries to participate. This is welcome, but we continue to work with the ESO to tweak this product to widen participation for other frequency response providers. We expect further discussions in 2021 and Centrica Business Solutions will be participating in these.
The other products as part of the new product suite will be called Dynamic Moderation and Dynamic Regulation. At this time, the design is not confirmed but we expect these to be faster-acting products, with response required between 1 and 10 seconds. We expect these products to require more frequent activations, and expect revenues from all three products to be stacked for providers that can provide all the services.
Jack Presley Abbott
Jack is a Senior Regulatory Manager for Centrica, drawing upon experience in a number of commercial and policy roles. Jack is an expert on regulatory areas that are of interest to Centrica Business Solutions. Jack has expertise and experience across a range of topics which includes the capacity market, balancing services and carbon pricing, and regularly engages with external stakeholders on these subjects.
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