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National Grid has revealed a roadmap for the reform of frequency response and reserve services.
The document sets out how the system operator intends to rationalise, simplify and improve the services in response to feedback from its System Needs and Product Strategy consultation held over the summer.
As part of the rationalisation process, National Grid is ending the procurement of eight frequency response and reserve products over the last quarter of 2017. They include Firm Frequency Response (FFR) Bridging, Frequency Control by Demand Management, Enhanced Frequency Response, Short Term Operating Reserve (STOR) Runway and Enhanced Optional STOR.
By the end of March, the company plans to simplify frequency response services to make them easier to access by providing more information in post-tender reports and greater guidance on the assessment process. Contract terms and durations and daily windows for availability will also be standardised to provide greater transparency.
National Grid will additionally review exclusivity clauses to help enable revenue stacking plans. It intends to publish recommendations for changes by the end of September.
The system operator believes FFR services could be improved through closer to real-time procurement and the replacement of tenders with auctions. It will trial a week-ahead auction next year and will apply the lessons from the trial to the reserve market, for which it is also considering auctions.
To simplify reserve services, standard contract terms will be reviewed to make them shorter and less ambiguous, with proposals being put forward at the end of September. Just as with frequency response, exclusivity clauses will be put under the spotlight to facilitate revenue stacking.
The second quarter of 2018 will see contract terms for Fast Reserve standardised and STOR products divided into two classes according to ramp-up times. National Grid will then launch a new web-based platform for ancillary services over the summer, initially supporting the Fast Reserve market before being rolled out to the STOR market later in the year.
New testing, compliance and monitoring policies for both frequency response and reserve services will be published during the third quarter.
Explaining the revamp in a blog on National Grid’s website, head of commercial electricity Cathy McClay wrote: “The changes we are making to our balancing services products will help to increase competition in markets.
“We also believe that by simplifying the procurement process we will attract new players who might have found the barriers to entry too high until now.”
Open Energi commercial manager Sebastian Blake, said: “Open Energi welcome National Grid’s Product Roadmap which clarifies expected changes to frequency response procurement in 2018.
“We are pleased to see National Grid’s commitment to reviewing testing requirements and the move to more real-time procurement which should enable greater participation from distributed technologies.”
He continued: “The introduction of a week-ahead auction is a step in the right direction and we would stress the importance of moving to a day-ahead auction as quickly as possible, a stated aim.
“Given real-time frequency response procurement is a market currently only open to large generation this is essential to create a level playing field.”
National Grid will publish a similar roadmap for the reform of reactive power and black start services in the first quarter of 2018.
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