Changing energy landscape
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Maximise from frequency response reforms

National Grid is reforming its frequency response market – opening up lucrative new opportunities for faster-acting response products.

Demand Side Response (DSR) serves an important purpose in our electricity system’s stability and its evolution. DSR enables the grid to bring on new, sustainable sources of energy and balances supply and demand across the grid so that everyone has reliable energy supply.

National Grid Electricity System Operator (“the ESO”) is required to ensure that the electricity system remains balanced and stable. One of the key parameters it manages is ensuring that the system frequency remains as close to 50 Hz at all times. System frequency is ever-changing and put simply, the frequency will deviate from 50 Hz if electricity demand and generation do not match.

In order to manage the system frequency the ESO procures a ‘frequency response’ product from a range of providers, which includes battery storage, DSR and gas generation. As this service is vital to the running of the electricity system there is a premium paid by the ESO to procure this service, compared to other services.

The ESO procures a range of frequency response services with response times between 10 and 30 seconds. There is a dynamic service, where an asset continuously monitors system frequency and provides actions that help the frequency remain close to 50 Hz, and there is a static service where a certain amount of energy is required from an asset if the frequency breaches a certain limit. There is a premium for the dynamic service. Centrica Business Solutions provides all of these services to our customers, and can help them to navigate the market to choose the most beneficial approach to meet their business objectives.

With the electricity system transitioning towards low-carbon, the product suite that the ESO needs to buy needs to change. With increasing amounts of variable renewables on the system, there is greater volatility on the system and it is becoming more challenging for the ESO to manage the system frequency. Therefore, the ESO is undergoing a reform programme for its frequency response products and is looking at procuring faster-acting response products. The ESO is currently consulting on new products that can respond within one second, rather than the current 10 second response time. Centrica is working closely with the ESO to ensure that as many different technologies can access these new products. We expect the new service to be very valuable to the ESO and hence will command a premium; we do expect these services to be competitive.

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Centrica Business Solutions is uniquely positioned to help customers through this change. Our proprietary market-leading technology and algorithms combined with our world-class aggregation approach allow customers to maximize their participation in these programs, while minimizing business risk through operational safeguards, excellent accuracy in event prediction and a broad base of aggregate load that allows for a balanced and reliable response to market events. As the leading Demand Side Response supplier across Europe, Centrica Business Solutions has the depth and breadth of experience to support customers and partners through the changing energy landscape.