National Grid Electricity System Operator (ESO) has proposed the return of the Demand Flexibility Service (DFS) for the winter period 2023/24.
Outlined within ESO’s Early View of Winter Outlook report, the organisation believes that the reintroduction of the scheme could help balance the grid throughout the winter period due to fluctuating prices in the wholesale market.
In light of this, the ESO confirmed that a formal consultation process has now started on the reintroduction of the DFS scheme which will initially determine the final terms of this years’ service.
Further announcements are expected to be made in due course following this process.
This morning we’ve published our Early View of Winter Outlook, to support the energy industry’s preparations for the 2023/2024 winter
— National Grid ESO (@NationalGridESO) June 15, 2023
Check out our website for more information on this report as well as our review of Winter 2022/23 – https://t.co/IYfe71HJn3
Regular readers of Current± will note that the DFS scheme had widely been touted as a success with many, including Octopus Energy’s founder and CEO, Greg Jackson, wanting the scheme to stay in place for the coming winter and become a regular part of the electricity system. This could replace the use of coal contingency units.
To highlight the perks of the DFS initiative, ESO revealed in early May that across the winter of 2022/23, the scheme shifted over 3,300MWh of electricity during peak times.
Alongside the DFS scheme, the report also predicts that the de-rated margin for the Winter period 2023/24 is 4.8GW (around 8%) – slightly higher than last year’s.
ESO confirmed that the increased margins compared to last year have been driven by: the availability of new generation; improved data quality; the availability of generation units that were partially or fully unavailable last winter; and the return to the capacity market of one coal contingency unit used last winter. This will now operate in the normal electricity market for 2023.
ESO said that, considering the continued risks and uncertainties relating to the Russian invasion of Ukraine, the organisation will continue to explore the potential availability of additional operational options.
One of these additional operational options, which could draw criticism from many within the industry and consumers alike, is the availability of two of the five coal contingency units that were used last winter – at the request of the UK Government. ESO confirmed that discussions are currently underway.
This comes just days after ESO asked Uniper to warm two coal units at the Ratcliffe-on-Soar power station to help meet a spike in demand due to increasing temperatures, as reported by Current±. This brought criticism from a number of organisations including climate group Greenpeace UK and Octopus Energy.
The use of the coal contingency units prompted Octopus Energy to call on the ESO to stop burning coal and instead use consumer energy consumption flexibility, such as DFS, to reduce demands on the energy grid.
Octopus said: “Paying coal plants adds £400 million to bills – whilst paying customers could push bills down by a hundred million.”
In March, EDF closed their West Burton A coal fired power plant despite calls for a contingency contract extension to further bolster the UK’s energy security.
