National Grid review (part 2/2)

The first part of this blog looked at two of the issues arising from a National Grid review of the Future of Balancing Services.

In it we showed how changes to the way System Inertia and Rate of Change of Frequency and Frequency Response services are procured could mean benefits for renewable generators.

National Grid broke the system’s balancing needs down into five categories (you can see them all the top of the previous blog here).

This second instalment picks up where the first ended by looking at the future of Reserve, Reactive Power and Black Start.

THREE: Reserve

Reserve is manually instructed after automatic frequency response services have delivered, and essentially involves an upward or downward shift in demand or generation in response to specific need.

What is changing?

As with frequency response, National Grid goes to the market for the firm volumes of reserve that are required for managing both demand forecasting errors and large losses.

These services are secured through regular tenders such as the Short Term Operating Reserve (STOR) and Demand Turn Up (DTU).

The greater challenge is where reserve is required closer to real time.

Typically, this demand can be met with plant which is part-loaded, and can therefore provide upward and downward flexibility.

The retirement of gas and coal from the system, however, brings the need for that flexibility into sharper focus.

This challenge is compounded as many of the generators in the Balancing Mechanism which could provide reserve are already being called upon to provide frequency response – and the same capacity can’t be used to do both.

Overall National Grid aims to consult with industry to develop and implement a new reserve product in 2018/19.

There are however several regulatory changes on the horizon that must also be considered:

• Project TERRE will introduce the first ever trans-EU replacement reserve (RR) service in 2019 and help create a model for cross-border electricity balancing.
• Future standardised reserve services, such as manual frequency restoration reserve, which is due to go live in 2021.
• Changing trading arrangements across interconnectors in the EU, allowing trading up to one hour ahead (instead of three hours) will impact reserve requirements and make generation and demand less certain.
  
  

What role will renewables play?

Due to uncertainties with forecasting it is difficult to say what the role of renewables in reserve will be.

Some academic papers have been written on how to optimize the allocation of renewable capacity in different markets using mathematical stochastic methods, but these don’t apply when trading the energy would put at risk the generator’s financial support (through the RO or CfD). However, with more focus on ‘subsidy free projects’ this may change in the future.

FOUR: Reactive Power

Reactive power is used to control voltage, and requirements will vary from region to region.

Generation, demand and network equipment like transformers and overhead lines and cables can either absorb or generate reactive power.

The ‘beer analogy’ is often used to describe reactive power, which is measured in kilo-voltampere, or kvar:

If useful working power is the beer, reactive power is the froth. Tilt the glass and the froth arrives first, creating a delivery delay – which is exactly what’s produced by reactive power.

When network demand is low, reactive power can increase. If that happens, the network becomes too ‘frothy’ and the useful power can’t get through, so reactive power must be absorbed.

What is changing?

Flexible generators like coal and gas plant can absorb reactive power, so the challenge for National Grid comes in the summer months, when demand on the transmission system is low and fewer flexible generators are running.

Due to the locational nature of this issue the network operator may currently have to instruct synchronous generation like coal or gas to start up where there is a need for reactive power absorption, which in turn requires them to ask other generation to switch off.

Where additional support is required, National Grid can procure reactive power absorption as a mandatory service through the balancing mechanism.

This service is currently valued at around £2.30–2.50/Mvarh, although these prices are based on a legacy methodology and do not reflect the full cost of providing or procuring mandatory reactive power.

National Grid is committed to reassessing the commercial value of reactive power, considering local sensitivities, ensuring that it provides appropriate routes to market for future providers and assessing the need to access reactive power from generation when at low or no reactive power output.

What role will renewables play?

Inverter technologies have the ability to generate and absorb reactive power when necessary, which means that many renewable power plants are already capable of providing some level of reactive power. There may be more that can be achieved with compensation equipment and optimisation.

National Grid’s commitment to review the value of this service will be helpful.
There are, however, other difficulties to overcome: how, for example, will embedded generators access the market if they are not liable to the service for compliance?

FIVE: Black Start

Black start is the ability to restore power to the system without the need for external power supplies if the transmission system, or a large section of the network, fails.

The number of black start providers is reducing as thermal plant shuts down.

National Grid will be procuring more Black Start services across different zones as existing contracts run out (in Scotland that will be in 2020/21).

The company has indicated it will consider how alternative transmission-connected and intermittent generators can be used to support its system restoration strategy.

What role will renewables play?

Renewables aren’t usually included when the conversation turns to ‘black start’.

This service is designed to bring the system back from network failure, and we can’t guarantee that wind, sunshine or rain will be available when required, right?

But what if there is some renewable resource available?

It would make sense to at least include renewables in any black start strategy, as the increasing share of these technologies in the power system is too important to be left aside.

If there is resource available when black start services are required, renewables could provide at least a ‘shade’ of black start through a combination of additional power supply, frequency control and reactive power absorption.

All the above are technically achievable – maybe it’s not ‘pure’ black start, but if it’s there, why not use it?

Blog by Head of Policy Michael Rieley.