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Electricity North West secures £6.8m for flexibility trading project

Customers in ENW's network area will be able to trade flexibility between themselves within the project. Image: ENW.

Customers in ENW's network area will be able to trade flexibility between themselves within the project. Image: ENW.

Network operator Electricity North West (ENW) has secured £6.8 million in funding from Ofgem for an energy flexibility trading project.

Dubbed Bi-Trader, the project will allow customers that have the ability to reduce their demand if necessary to trade that flexibility between themselves, while also helping them meet any network obligations and open up new opportunities for flexibility provision.

ENW is planning to trial real-time trading on a live distribution network, in what it says is a first for the UK.

Currently, ENW calls on customers based on an ordered list. Bi-Trader would instead allow these customers to trade bilaterally, meaning the order in which they are switched off would change. Once the trading window closes, the re-ordered list will go back to ENW, which can then complete necessary actions.

“By offering the chance to trade, more customers are likely to sign up to flexible services meaning we can reduce our requirement to reinforce the network and customers can boost the value of their assets by using them to participate in provide services to both the DNO and ESO,” said Dan Randles, head of network innovation at ENW.

“Bi-Trader is an extremely innovative project and we really do expect the neutral market to transform the flexibility market.”

ENW is working with project partners Electron, AFRY Management Consulting and Delta-EE on Bi-Trader, and is planning a four-year trial. This is expected to start in 2022 and cost a total of £8.4 million.

The project has been awarded just shy of £7 million of Network Innovation Competition funding by Ofgem. ENW had to present Bi-Trader to a panel of industry experts, demonstrating how it will provide environmental benefits, reduce costs and help maintain grid security in order to win a chunk of the annual fund.

In August, the regulator also announced a new £450 million fund to help unlock further innovation in energy networks.

Bi-Trader is predicted to provide £35.5 million in economic benefit, as well as a significant carbon reduction in the North West region by 2050. If it were rolled out nationally, benefits would would equate to around £581 million.

Distribution network operators submitted their final business plans for the upcoming RIIO-ED2 price period to Ofgem at the beginning of December, outlining billions of pounds in funding for transforming the countries energy network. Flexibility was key to all of these, including ENW which also issued nine tenders for flexibility

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