UK national grid uses more STOR and frequency response.

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The UK National Grid’s has recently released an annual Power Responsive report which shows the electricity system operator relied more heavily demand-side response in 2018. These services are provided by consumers and small generators, often diesel and gas powered that can react quickly to changes in the national Grids power requirement and are an essential part of the balancing mechanism, especially in times of stress. STOR (Short Term Operating Reserve) and FFR (Firm Frequency Response) prices continued to fall as providers installed more capacity and the contracts from national Grid became in higher demand.

The report lists ancillary services changes that will be made as well as broader energy market information and its potential effect on providers of flexible capacity. key indications are that the MPCD (Medium combustion plant Directive) and the suspension of the capacity market are causing significant negative issues in the demand response market by increasing provider costs and reducing and / or delaying revenue. These factors will mean that some demand response providers exit the market – just at a time when capacity constraints in the wider market may be under stress in winter months – especially if there is a failure of generation capacity. Currently however in 2018 this hasn’t materialized and it seems that demand for these contracts is strong.

STOR Statistics 2018

The STOR service has been around for some time, Nearly 3400 MW of STOR is tendered to the grid each year. From the table you can see that the availability pricing between 2017 and 2018 fell from £2.14 to £1.04 in £/MW/h. For a 1 MW diesel generator, this equates to just £8760 per year. The price for utilization also fell, with the cost falling to £76 / MWh. This is under half the price for the cost of running a diesel unit, so the fact that national grid is now calling on the STOR program more often will start to make it far less beneficial to providers providing diesel capacity.

This change on the costings for the diesel market may have little effect – the MCPD and the Specified Generator controls will in practice mean that diesel capacity is not able to be used in balancing service contracts and therefore STOR will be impacted in 2019.

The Aggregator Rush for FFR rush

traditional providers of FFR services have been pushed back by a surge in aggregators pushing into the market. From 2017 to 2018 capacity on frequency response grew from 392 MW to 2720 MW, an increase of almost 6 times. This huge surge in capacity will certainly help to support the grid in times of stress. The price that the National Grid paid for these services also fell like STOR, although not as dramatically.

The price paid for FFR services decreased around 31 per cent to £32.46/hour while the average price for dynamic FFR fell by 64 per cent to £110.18/hour.

Charlie Farrow from Welland Power – a diesel and gas generator manufacturer said “Demand for Gas for the balancing services has increased hugely with traditional diesel plants unwilling to retrofit the expensive equipment needed.”

Triad Periods Cause Demand Changes

National Grid doesn’t have much Triad data, and can only see how people react to cold weather over winter. But as more people participate, it said Triad periods are getting harder to predict, so businesses are reducing their draw on the transmission system more regularly. As Triad periods fall in a similar time each year, typically 5-7pm, normally when the weather is coldest, businesses are reducing demand at these periods, leading to unpredictable triad periods in the future. Pedro Araujo of Regency Generators said “Triads are going to get harder to predict as customers simply turn off equipment or shutdown completely to avoid these heavy charges. Generators are also usually run at these periods in order to reduce grid demand, but as the Triad periods become less predictable, the generators need to run more frequently, increase the cost of avoidance.”

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