The National Energy System Operator (NESO) has launched a consultation into the latest Frequency Risk and Control Report (FRCR).
The FRCR is updated at least annually, and it includes an assessment of the magnitude, duration and likelihood of transient frequency deviations on the electricity grid, as well as the potential impact and financial cost of securing the grid in the event of a frequency deviation.
Ahead of submitting the latest version of the FRCR to energy regulator Ofgem for approval, NESO is opening a consultation to allow stakeholders to submit feedback on the report. The consultation is now fully open and will remain so until 31 March 2025.
Among the recommendations in this report is reducing the minimum inertia required on the network from 120.0 GVA.s to 102 GVA.s. The report indicates that reducing this level of inertia could result in significant cost savings of around £96 million and that reducing it to this level does not create any tangible increase in overall risk to the electricity system. This follows a reduction of required inertia in 2023, from 140 GVA.s to the current 120 GVA.s.
The report notes that between the reduction of this lower minimum inertia requirement up to the end of 2024, there were no reportable frequency events in the British grid system where frequency fell outside of the statutory limits of 49.5Hz to 50.5Hz for 60 seconds or more.
The report further recommends keeping policies around Balancing Mechanism Units (BMU) broadly the same, noting that the current policy of securing all BMU-only system events represents the best value for money for NESO. Meanwhile, the report also recommends increasing the Dynamic Containment – Low (DC) capacity requirement by 200MW in order to further safeguard the security of the network following frequency events.
Overall, NESO estimates that the annual cost of managing frequency risks on the network based on the 2025 FRCR will be around £173 million, a figure which factors in the £96 million estimated cost saving from reducing the inertia requirement as well as a £3.2 million cost for procuring additional DC.
The report states that following Ofgem’s approval, the minimum inertia requirement will be reduced in phases. The first stage will lower the minimum inertia requirement to 110 GVA.s, followed by a second stage that will lower the minimum inertia requirement to 102 GVA.s. There will be a minimum of four weeks between the two phases to allow for observation to establish the impact of the lowered requirement on the network.
The consultation especially seeks feedback on the recommendations made in the report as well as future concerns on which the next edition of the FRCR and beyond should focus.
The consultation also asks stakeholders to feedback on the level of industry engagement sought in the process as well as if the future obligation to produce the FRCR should be mandated as a license condition for NESO, as opposed to its current status as an annex requirement to the Security and Quality of Supply Standards (SQSS) code.
