National Grid has accepted eight bids for companies to provide so-called Enhanced Frequency Response, reacting in less than a second to help keep electricity flows in balance. The tender will see batteries used to balance at grid scale for the first time.
The winners were:
EDF Energy Renewables (West Burton B): 49MW at £7/MW of EFR/h
Vattenfall (Pen Y Cymoedd): 22MW at £7.45/MW of EFR/h
Low Carbon (Cleator): 10MW at £7.94/MW of EFR/h
Low Carbon (Glassenbury): 40MW at £9.38/MW of EFR/h
E.On UK (Sheffield): 10MW at £11.09/MW of EFR/h
Element Power (TESS): 25MW at £11.49/MW of EFR/h
RES (RESEFR7-PT): 35MW at £11.93/MW of EFR/h
Belectric (Nevendon): 10MW at £11.97/MW of EFR/h
The System Operator received bids from 37 EFR providers to provide the 200MW of response on offer. The majority of these were from battery assets. Of the 64 unique sites taking part, 61 use battery assets, two offer demand reduction and one uses thermal generation. Contracts have been awarded on a four year term giving providers the certainty that they need to develop this technology.
Previously the fastest frequency response was delivered in under ten seconds. The System Operator said the enhanced ability to control variations in frequency will result in reduced costs of around £200 million.
The EFR tender prompted a rush of proposals. Initially National Grid had received 72 submissions, from overseas as well as UK parties, offering a total of 1,370MW – far exceeding the 200MW sought. The tender was originally due to be finalised in April but National Grid revised its requirements.
National Grid sparked surprise and concern among EFR bidders when it announced it had awarded a contract to provide 20MW of frequency response to renewable energy company RES, which has battery storage projects in operation but none in the UK so far.
In June, senior account manager Adam Sims told New Power in response to those concerns that the contract was “the culmination of a contractural relationship we have had for 18 months” and much of the work was “a precursor to the expression of interest” for the EFR tender. The RES asset would have the same operating envelope as the coming EFR plants but would be used to test operating parameters like different ramp rates, “it’s a good size, we can see the effect,” said Sims.
The four-year contract offered to the winning EFR suppliers. Normally its service contracts are limited to one year, partly because “we are quite risk-averse in contracts and we don’t know how the market will change,” said Sims. In addition, the SO incentive scheme for procuring balancing services is built around 1-year contracts. But Sims said National Grid had recognised that for some companies “the change in the generation mix means [services] changed from a ‘nice additional revenue stream’” and instead their whole revenue would be from balancing services.
Sims said there was “ongoing discussion on the incentive scheme” and New Power understands that National grid is sympathetic to moving to longer contracts for other services. Sims also said “Ofgem is sensitive” to options for change.
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