16 August 2017

UK Power Networks has released more information about how and where they intend to tender for flexibility services. The expression of interest is for delivery of flexible capacity at 10 substations where there are problems delivering peak capacity – which could include energy storage, Demand Side Response (DSR), and other flexible generation.

Full details here.

Figure 1: Locations of the substations where flexibility services are needed (source UKPN website)

Full details here.

The following key points caught our eye:

  • The expression of interest is for individual tenders that are due to open for services ‘this winter 2017/18 (starting January 2018) and/or next winter (2018/19)’ and could cover 10 substations in a variety of locations across London, Sussex, Suffolk, Hertfordshire. (Figure 1)
  • The minimum bid size is 500 kW flexible capability (aggregation allowed)
  • Two to five hours availability required (depending on location, see Table 1) at specific peaks, 7:00 – 8:00 or 16:00 – 20:30 (depending on location)
  • The tender is at the 11 kV (and below) voltage level (apart from one substation). There is an ongoing discussion amongst DNO’s about the most effective  level at which to focus flexibility services with some favouring 33 kV and above

The low minimum bid size of 500 kW and specific mention of ‘portfolios of projects’, is great news for aggregators. It’s worth noting that the 500 kW minimum is for flexible capability - not capacity. Whether aggregators have enough flexible capability/capacity in the given areas to deliver meaningful flexibility will be interesting to see. Large industrial energy users in these areas are likely to receive more calls from DSR aggregators, if they have not done so already. UKPN also mention that they may be willing to look at smaller flexibility providers, showing they are ‘flexible’ too.

The tight timeframes for the proposed tender mean that only those energy storage or flexible generation projects with a grid connection, or that have already been built, are going to be able to deliver in time. If you are one of the lucky ones that have a viable project in the locations specified, fill out the expression of interest questionnaire by 8 September 2017. Be aware that there are no guarantees as UKPN state that they will only go out to tender, ‘where there is sufficient interest and availability’. You would assume that UKPN has already looked at the “queue” of projects that are in the process of getting a grid connection and those that already have one, and judged that there is enough flexible capacity to go out to tender.

Many of the potential bidders may be surprised to see the length of availability required in some of the locations (Table 1) - which could make DSR and most energy storage projects unviable. This could play into the hands of peaking plants (diesel, gas or AD) that are in the area.  

Overall, the proposals are welcome news for energy storage, aggregators and flexible generation, that have been eagerly waiting for more localised flexibility markets to develop. As one of the first commercial offers to be announced by a Distribution Network Operator (DNO) in the UK, it provides a window into the Distribution Systems Operator (DSO) model. The question is, who and what can deliver the required flexible capacity at the given availability times, voltage level and locations, at a practical price? Hopefully DSR and storage providers will step up to respond, it would be a shame if this initiative merely resulted in more revenue for diesel engines.

Table 1: Indicative network requirements for the locations in the UKPN flexibility services tender (source UKPN website)

 

Author: Olly Frankland

Contact: [email protected]