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Centrica urges DNOs to commit to market-based flexibility as Cornwall LEM trial finishes

Image: Centrica.

Image: Centrica.

Centrica’s three-year Local Energy Market (LEM) trial spanning 200 homes and business has come to an end.

The £16.7 million project saw 310MWh of power successfully traded using the purpose built flexibility platform. This was lauded as a “world first” when it went live in November 2019, allowing National Grid ESO and Western Power Distribution (WPD) to simultaneously procure flexibility from the same platform.

As part of the project, solar and battery storage was installed in 100 homes in Cornwall, which were then aggregated together to form a virtual power plant (VPP).

This VPP was then used to provide flexibility to both National Grid ESO and WPD, with 75 of the batteries having been deployed into the national Dynamic Firm Frequency Response market.

Alongside residential flexibility, 5MW of low carbon technology – including solar, wind, storage and combined heat and power – was installed at 87 businesses, with a further 26 businesses being provided with training and energy surveys to reduce their energy costs.

Overall, as part of the LEM there were 381 bids from network and system operator buyers, 107 offers from flexibility service providers and 89 contracts made. As part of this, 210MWh of reserve was contracted and 99MWh of utilisation contracted.

Jorge Pikunic, managing director of Centrica Business Solutions, said the LEM has “proved that homes and small businesses can play a role” in flexibility, and Centrica has released a number of recommendations to the government, industry and Ofgem to further encourage flexibility.

The company suggested a deadline of 2023 to introduce flexibility markets to the energy system, as well as encouraging the government, regulator and distribution network operators (DNOs) to “recognise that Active Network Management (ANM) can have an adverse impact on flexibility markets and commit to using market-based flexibility services as a first resort”.

It said that DNOs moving to adopt flexibility market solutions that include close-to-real-time products would be “very helpful”, enabling participation by a wider range of flexibility providers.

It added that creating flexibility markets that are independent and provide services to both the DNOs and the ESO will be the best way to ensure procurement by DNOs is “objective and that network-based solutions are not being favoured over flexibility services”.

Jennifer Woodruff, innovation and low carbon networks engineer at Western Power Distribution, said the Cornwall LEM had provided WPD with "useful learning about different options for how we could purchase flexibility services, especially how we could build in processes to manage conflicts and avoid breaching network limits".

In its report on the LEM, Centrica also highlighted the need for "a significant improvement in the data available from the DNOs", pointing in particular to data on congestion and constraint forecasting, network topology changes, the power-flow relationship between gridnodes and customer-to-network mapping.

Regulatory guidance is also needed on how the DNOs should assess, procure, dispatch and baseline flexibility, Centrica added.

It concluded that the energy white paper provides an “ideal opportunity” for the government to identify grid flexibility as a “vital component” in the transition to electrification.

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