Balancing markets throughout Europe are opening up to decentralised power, but there is still “significant room” for mechanisms to improve further.
That is the conclusion of smartEn’s latest edition of its balancing markets map, which assesses grid balancing mechanisms throughout Europe across a range of criteria and measures them against each other.
And while Great Britain ranks highly across Europe, it has failed to make it into the list of top-rated balancing markets due to what smartEn has labelled “overly complicated products and market structures”.
SmartEn, a business association for those in the digital and decentralised energy space, assesses balancing markets based on five specific criteria: measurement and prequalification; payments and penalties; market segmentation and size; transparency, and upcoming changes.
The association found that, overall, balancing markets throughout Europe were either opening up entirely or evolving to include a broader range of technologies, including demand response and decentralised power.
While no single market received smartEn’s highest rating, Belgium, France, Ireland and Switzerland were rated highest of all, with Great Britain ranked just outside.
Amongst smartEn’s criticisms of Great Britain’s balancing mechanisms are high entry requirements, slow progress under National Grid’s System Needs and Product Strategy (SNAPS) report and a highly fragmented market.
Unveiled in June 2017, the Transmission System Operator’s SNAPS document was designed specifically to simplify National Grid’s procurement of balancing services, including new frequency response products, new reserve and reactive power markets and a restoration strategy for the black start mechanism.
While well intentioned, progress has perhaps been slower than expected. In December last year National Grid unveiled a simpler, more transparent FFR process, followed by news in September this year that the TSO was preparing same-day frequency response auctions to be introduced next summer.
National Grid’s capability of procuring reserve has also been significantly dented by the surprise annulment of the Capacity Market’s state aid clearance, which has resulted in the mechanism being placed in an indefinite “standstill period”.
Frauke Thies, executive director at smartEn, said: “Comparing the situation to a few years ago, we see that almost all countries have improved, even if some only in small ways.
“However, we also see that some countries that were doing well before are now starting to fall back in their efforts. This is a problem. The market-transition must not stop half-way and further steps are needed before all technologies and service providers can truly participate on an equal footing.”