Innovative Business Models to Meet Grid Challenges

Mr Bruno Menu, Limejump Ltd,United Kingdom

Dr Luke Peck, Limejump Ltd, United Kingdom

At the tail end of 2015, National Grid UK released its System Operability Framework (SOF) detailing how the Future Energy Scenarios (FES) will impact the energy system and what operability challenges are foreseen. Currently, the UK grid is under considerable stress as the margin between supply and demand continues to narrow. However the situation will only exacerbate with the planned closure of fossil fuel plants and the expected increase of distributed generation.

According to National Grid UK’s SOF, within 5 years the primary frequency response requirement is expected to increase by up to 40% and by 2030 the overall response requirement will be up to 4 times today’s level. National Grid UK has highlighted the implications of this by clearly stating that unless alternative business models are offered, by 2035 providers will not be able to meet requirements as listed by any of the FES.

An additional challenge to the UK energy system is the growth of embedded generation over the next decade which is forecast to be unprecedented. These would place increased strain on the local network and would also require grid reinforcement as there currently isn’t sufficient capacity or infrastructure to transport the anticipated future supply from Scotland, where the majority of wind power is produced, to the south where demand is forecast to be highest.

The closure of traditional fossil fuel stations will not only create issues in terms of reactive to active power balance on the grid, but will also remove generation sources currently responsible for supplying the vast majority of UK energy system flexibility.

In order to integrate more renewable generation onto the network, other generation assets and customers need to provide the flexibility required to adjust export/import levels at short notice to accommodate a change in energy supply when the wind blows or the sun shines.

There have been various solutions proffered as to how to provide this much needed flexibility and ultimately meet these challenges, including:

•           Non-firm renewable connections which allow for ramp down flexibility and offer a reduced connection cost in areas of high congestion.

•           Enhanced monitoring on the LV network to help mitigate technical issues that could arise from solar clustering.

•           Implementation of Virtual Power Plants (VPPs) in areas of high-embedded generation density. VPPs are able to extract flexibility out of small-scale generators and customers, allowing them to respond to varying amounts of renewable supply on the system whilst compensating them for doing so. VPPs already exist in places like Germany and the US, among others, and they are proven to work in those markets.

The benefit of rolling out these alternative business models is that they enable National Grid to delay, or completely avoid, costly and carbon intensive grid reinforcement by extracting greater flexibility from, and visibility into, the system.

We propose to explore the various innovative models that could help the National Grid UK meet the challenges highlighted in the SOF further in our presentation.