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National Grid has published a roadmap laying out its plans to widen access to the balancing mechanism.
The system operator says removing barriers to entry will release untapped sources of flexibility, boost competition in the market and lower the cost of managing the power grid.
A key focus of the document is improving access for aggregators, for whom participation in the balancing mechanism “may not be straightforward”.
Although they are already permitted to trade in the balancing mechanism, they must also be a licensed supplier. National Grid admits this route to market has “only been used previously for locationally specific cases and has not been taken up in earnest”.
The company said it plans to make a series of changes to the current market arrangements to encourage the use of the “supplier route”. These include simplifying the data submission process and metering requirements and enhancing its ability to optimise and dispatch aggregated balancing market units.
National Grid said it also wants to create new routes to market for potential flexibility providers. Alongside its continental counterparts, the system operator is developing a European balancing platform called TERRE (Trans-European Replacement Reserve Exchange).
“This platform will create a way for standardised balancing products to be exchanged across borders, and it needs to be open to all type of balancing service providers,” the roadmap explained. “This includes embedded generation, aggregators and demand-side response.”
The platform will be open to all flexibility providers with more than 1MW of capacity, whether on an aggregated or individual basis. To enable its creation, changes are being introduced to several industry codes which, if approved by Ofgem, will take effect over the current summer and in February 2019. The planned go-live date for the platform is December 2019.
One example is P344, a proposed modification to the Balancing and Settlement Code (BSC), which would create a new type of BSC participant called a “virtual lead party”.
A virtual lead party would be able to create an aggregated balancing market unit without having to take responsibility for balancing its constituent parts. This responsibility would remain with the registered suppliers of each individual site.
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