National Grid Electricity Distribution has introduced Short Term Trades to grow domestic participation in its flexibility service this winter.
The National Grid saw a rapid increase in participation from flexible domestic assets in its latest flexibility procurement round, with a total of 433 households containing assets such as electric vehicles (EVs) and home battery storage set to participate in flexibility events this winter.
Taking part in flexibility services allows households to reduce energy usage in response to signals from their supplier or aggregator (usually for some form of compensation). Such services deferred £147 million of network reinforcement, revealed National Grid.
According to National Grid roughly over three million customers in areas with operating flexibility services and the electricity distribution network operator plans to expand its flexibility procurement by introducing Short Term Trades.
Helen Sawdon, National Grid’s flexibility commercial lead explained that, as Short Term Trades are procured on a weekly basis, it will present more opportunities for news flexibility assets to enter the market sooner.
“Short Term Trades will be procured on a weekly basis, with the availability and price agreed each week before delivery allowing opportunities for new flexible assets to enter the market as soon as they become eligible,” said Sawdon.
“In addition, we anticipate that, by reducing the amount of time between procurement and delivery, we’ll see a greater level of successful participation from intermittent assets that are unable to commit to delivery over longer timescales.”
Supplier and aggregators wising to become Flexibility Service Providers (FSPs) will need to be registered to the National Grid’s Market Gateway platform which digitalises the flexibility procurement process to offer a simpler process for FSPs to contract for flexibility.
“We know from stakeholder feedback over the last 18 months that flexibility needs to be more accessible to a broader market. By creating the Market Gateway and launching a suite of products to procure flexibility over different timeframes, we have been able to open up the market to more businesses and domestic customers,” said National Grid’s distribution system operator director Ben Godfrey.
“The Market Gateway is an online tool that reduces the administrative burden of gaining a contract, registering assets and trading services. It standardises and digitises the commercial and technical registration processes, enabling a level playing field for suppliers, aggregators and marketplaces to develop flexibility markets on our behalf.”
Flexibility providers are offered financial incentives to contribute in the National Grid’s flexibility services as the average provider is said to typically receive £3,000/MWh per year. This could increase however, as a recent rise in maximum prices could boost earning up to £18,000/MWh a year.
Domestic flexibility services have proven to be a highly effective form of grid-management. National Grid ESO’s Demand Flexibility Service (DFS) scheme for example, shifted over 3,300MWh of electricity last winter and has proven such a success that the ESO confirmed in September that it would re-launch the DFS service this winter.