ESO cleared to disconnect distributed generators to cope with ‘exceptionally low demand’

Ofgem has approved an urgent modification to the Grid Code that will allow the electricity system operator (ESO) at National Grid to order the disconnection of distributed generators as it attempts to manage “exceptionally low demand” over the bank holiday weekend due to the coronavirus lockdown.

The regulator said the ESO already has the power to instruct distribution network operators (DNOs) to disconnect specific generators connected to their networks.  The modification GC0143 will allow the ESO to issue a more general instruction to disconnect a volume or percentage of capacity.

“The unprecedented societal changes brought about by measures put in place to deal with the pandemic has led to a significant reduction in consumer demand for electricity,” Ofgem explained in the decision letter.

“When combined with certain weather conditions, this could result in electricity demand on the transmission system falling to levels rarely seen, introducing new challenges for the ESO in balancing supply and demand.”

Ofgem stressed that the ESO should only issue an instruction as “a last resort in an emergency situation, after having exhausted all other commercially available options.” Upon receiving an instruction, DNOs must take a “considered approach” to selecting which generators to disconnect, in particular accounting for safety and environmental issues.

Whilst it accepted that the reduction in demand is “extraordinary and unforeseen”, Ofgem said it is concerned that “the issue at hand in this decision is one of clarity of the legal text”, especially as “the previous wording has been in existence for many years”.

“We are also concerned that the issue of legal ambiguity was only raised by DNOs at this point immediately before possible need,” Ofgem added.

“Licensees are obligated to keep codes up to date and under review as a condition of their licences. This urgent modification shows that no timely review was undertaken prior to this summer, which is particularly concerning given that summer minimum demand has been falling for some years, increasing the need for robust emergency controls.”

The modification will expire on 25 October 2020. Ofgem urged the ESO to review the current commercial tools available for managing low demand and work with the rest of the industry to develop an enduring market-based solution.

As part of this work, Ofgem ordered the ESO to undertake a “detailed review” of the numerous responses to the consultation on the modification and report back to the regulator within two weeks.

Responding to the decision, the ESO said the emergency powers, whilst necessary, are unlikely to be used in the coming months, “particularly given the work that the ESO has been doing in establishing new commercial tools to manage low demand situations.” At the same time as submitting the code modification last week, the body launched a new downward flexibility service that is due to start at 11pm tonight (7 May).

The ESO said it plans implement an enduring solution to the issue in spring 2021 following a consultation over the summer.